ACA Transgender Protections Quashed by Texas Judge

Alicia Ault

October 17, 2019

A federal judge in Texas has vacated an Affordable Care Act (ACA) rule that prohibits discrimination by healthcare professionals and insurers based on sex, gender identity, or pregnancy termination.

The case, Franciscan Alliance v Azar, has been in the US District Court for the Northern District of Texas, under Judge Reed O'Connor, for several years.

O'Connor is the same judge who, in December 2018, struck down the entire ACA as unconstitutional. He has now vacated a rule implementing Section 1557 of the ACA, which prohibits health programs or facilities that receive federal funds from discriminating on the basis of race, color, national origin, age, disability, or sex.

The rule interpreted "sex" as prohibiting discrimination based on sexual orientation or gender identity, an interpretation O'Connor said was contrary to existing law.

The Obama administration fashioned the rule to prevent denials of care or coverage of procedures, including those related to transitioning or gender-affirming surgery.

But a group of healthcare providers, religious organizations, and nine states claimed it mandated services be offered in the face of conscience objections or "even if the doctor believes the treatment or hormone therapy could harm the child."

O'Connor sided with the plaintiffs — represented by the Becket Fund for Religious Liberty — that the ACA protections were an overreach and violated the Administrative Procedure Act and Religious Freedom Restoration Act.

However, he also granted the River City Gender Alliance and American Civil Liberties Union of Texas their request to intervene as defendants — as the Trump administration has refused to defend the rule.

Discrimination Claims Still Valid?

It's not clear what will happen next with the Section 1557 rule, in part because the fate of the entire ACA is still being decided at the Fifth Circuit Court of Appeals.

However, Katie Keith, JD, MPH, said in Health Affairs that the final judgment by O'Connor on the Section 1557 rule gives the defendants — River City Gender Alliance and American Civil Liberties Union of Texas — the right to appeal to the Fifth Circuit.

In the meantime, "an insurer or provider — or any other covered entity under the 2016 rule — could, in theory, rely on Judge O'Connor's ruling in attempting to roll back nondiscrimination protections or denying coverage or care," she wrote.

But, said Keith, other courts have found that Section 1557 and, in addition, Title IX, prohibits discrimination on the basis of gender identity.

"Thus, covered entities — such as hospitals, clinics, and state Medicaid programs — that fail to comply with Section 1557 are likely to still face lawsuits for discrimination," she wrote.

Protections Stripped Away

In the meantime, in late May, the Trump administration proposed to strip away protections under Section 1557 for LGBTQ individuals or women who had received, or were seeking, abortion services.

More than two dozen medical organizations protested the proposal in a letter.

"The proposed rule specifically would eliminate federal rules requiring nondiscrimination against transgender persons, weaken requirements that healthcare clinics accommodate patients with disabilities and with limited English proficiency, and allow clinicians with religious objections to broadly discriminate against women seeking reproductive services," said Robert McLean, MD, FACP, president of the American College of Physicians, in a statement.

The final rule has not been issued and there is no statutory deadline.

At press time, the proposal had received 155,966 comments.

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