Anderson v. Crouch

Gender Affirming CareWest VirginiaMedicaid ActEqual ProtectionAffordable Care Act4th Circuit

May 1

Written By Mack Karbon

Lambda Legal representing the plaintiffs

Fourth Circuit Court of Appeals

On appeal from the U.S. District Court for the Southern District of West Virginia

Case no. 22-1927 (4th Cir.)
Case no. 3:20-cv-00740 (S. Dist. W.V.)

STATUS: ONGOING

STATUS UPDATE: VICTORY! On April 29, 2024, the Fourth Circuit Court of Appeals issued a joint decision en banc in this case and Kadel v. Folwell, affirming the district court decisions below and finding that healthcare plans that cover medically necessary treatments for certain diagnoses but bar coverage of those same medically necessary treatments for patients diagnosed with gender dysphoria violate federal law and the U.S. Constitution.

Case Information

In 2020, Lambda Legal filed a federal lawsuit challenging West Virginia’s blanket exclusion of coverage for gender-affirming care in its Medicaid and state employee health insurance plans. The class-action lawsuit was filed in the U.S. District Court for the Southern District of West Virginia on behalf of Christopher Fain and Shauntae Anderson, both Medicaid participants. The case, which originated as Fain v. Crouch, was subsequently re-titled Anderson v. Crouch.

In 2022, a settlement with The Health Plan of West Virginia, Inc. led to the removal of the exclusion on coverage for gender-confirming care in The Health Plan’s PEIA plans for state employees.

In August of 2022, the district court RULED in favor of the Medicaid plaintiffs, finding that the exclusion violated the Fourteenth Amendment's Equal Protection Clause, the Affordable Care Act, and the Medicaid Act.

The state-defendants appealed to the Fourth Circuit Court of Appeals. Oral arguments were heard before a three-judge panel in March of 2023. The next month, upon a sua sponte poll of the court, a majority of judges voted to rehear this case en banc. The en banc rehearing was held on September 21, 2023.

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Fourth Circuit En Banc Decision

On April 29, 2024, the Fourth Circuit handed down a joint decision in this case and Anderson v. Crouch. Both cases were briefed in full before the district and appellate courts, and the Fourth Circuit, by sua sponte orders, reheard each case en banc in September of 2023.

The en banc decision was a resounding victory for trans individuals, medical patients, and employees. The Court found that healthcare plans that cover medically necessary treatments for certain diagnoses, but prohibit coverage of those same medically necessary treatments for a diagnosis unique to transgender patients, violated federal law and the U.S. Constitution.

Issues Before the Court

The issue in Kadel was whether North Carolina’s public employee healthcare plan could lawfully exclude medical coverage for “[t]reatment or studies leading to or in connection with sex changes or modifications and related care.” The issue in Anderson was whether West Virginia’s Medicaid Program, which covered some gender-affirming care, but not gender-affirming surgery, or, as the Program calls it, “[t]ranssexual surgery,” violated the rights of trans Medicaid beneficiaries.

Arguments & Findings

The appellant-states in both cases argued that the coverage exclusions do not discriminate on the basis of sex or gender, but rather on the basis of “diagnosis.” The Court disagreed: “In this case, discriminating on the basis of diagnosis is discriminating on the basis of gender identity and sex.” The exclusions were therefore subject to - and ultimately failed to satisfy - the heightened standard of scrutiny applied to cases involving distinctions based on “quasi-suspect” characteristics like sex and gender.

The appellants further argued that, even if the coverage exclusions do discriminate on the basis of sex and gender, the discrimination is permissible because it is “rationally related to legitimate government interests.” According to the appellants, gender-affirming care is too expensive and ineffective to cover. Again, the Court disagreed. It swiftly disposed of the costs argument, noting that “a state may not protect the public fisc by drawing an invidious distinction between classes of its citizens.” Regarding effectiveness, the Court found that the appellants failed to offer evidence to support their contentions. Furthermore, against the immense volume of evidence provided by the plaintiffs that gender-affirming care is efficacious, the appellants’ unsupported assertions to the contrary are unpersuasive.

Importantly, the Court delves into an analysis the oft-cited 1974 Supreme Court case Geduldig v. Aiello. Geduldig was relied upon heavily by the appellant-states and frequently by others attempting to rationalize exclusions for gender-affirming care. The reason is obvious: the Court in Geduldig found, in so many words, that pregnancy is not a proxy for sex, and that healthcare exclusions that deny coverage for conditions related to pregnancy do not discriminate on the basis of sex. Thus, as appellants argue, exclusions that apply to only a subsection of a protected group - here, trans people seeking gender-affirming care - cannot be said to discriminate against thaat group on the basis of sex or gender.

The Court, again, did not agree, and set forth three reasons why the appellants’ argument cannot stand. First, while Geduldig held that pregnancy is not a proxy for sex, it did not hold that any characteristic of a subset of a protected group cannot ever be a proxy for that group. Second, gender dysphoria is so intimately related to transgender status as to be virtually indistinguishable from it: “The excluded treatments aim at addressing incongruity between sex assigned at birth and gender identity, the very heart of transgender status.” In contrast to pregnancy, which is a condition that can be described entirely separately from a person’s sex, gender dysphoria is simply the medical term relied on to refer to the clinical distress that can result from transgender status. Third, the exclusions cannot function without relying on direct discrimination. For example, determining whether a treatment like reduction mammoplasty (top surgery) constitutes “transsexual surgery,” or whether a testosterone supplement is prescribed in connection with a “sex change[] or modification[],” is impossible — literally cannot be done — without inquiring into a patient’s sex assigned at birth, and comparing it to their gender identity. Indeed, those procedures are routinely covered by the appellant-states’ healthcare plans in situations where the only material difference is the patient’s sex.

In sum, the Court found that both states’ exclusions violate the Equal Protection Clause, and that the Medicaid exclusions in Anderson additionally violate the Medicaid Act and the Affordable Care Act.

Judge Gregory wrote the majority opinion, in which Chief Judge Diaz and Judges King, Wynn, Thacker, Harris, Heytens, and Benjamin joined. Judges Richardson, Wilkinson, Niemeyer, Quattlebaum, Agee, and Rushing dissented.