Attorney defends North Carolina transgender care exemptions


RALEIGH, NC (AP) — A lawyer representing leaders of a North Carolina health plan defended its exclusion of gender-affirming treatments Wednesday before a federal appeals court, facing a barrage of criticism from its chief judge.

State Treasurer Dale Falwell and the Executive Administrator of the State Health Plan are seeking to repeal a order of the court of first instance requiring the plan to pay for “medically necessary services,” including hormone therapy and certain surgeries, for transgender employees and their children. A judge ruled in favor of the employees and their dependents, who claimed in a 2019 lawsuit that they were denied gender pay coverage under the plan.

Attorney John Naper told a three-judge panel of the 4th U.S. Circuit Court of Appeals in Richmond, Va., that the plan generally excludes some medically necessary procedures based on cost, but makes no determinations based on gender or sex.

“The plan is foiled,” Knepper said. “In this case, again, the State Health Plan provides full coverage of all health risks. There are just some health risks it doesn’t cover.”

The plan, overseen by Folwell’s office, provides health insurance to more than 750,000 teachers, state employees, retirees, lawmakers and their dependents. While it provides counseling for gender dysphoria and other diagnosed mental health conditions, it does not cover “gender reassignment or gender reassignment treatment and related care.”

Chief Circuit Judge Roger Gregory said the exemptions unduly single out a protected class, despite Knepper’s repeated claims that gender identity was not a factor.

“Why pick on transgender dysphoria” to balance the report, Gregory asked when President Bill Clinton appointed the recess judge, who was later reappointed to the court by President George W. Bush in 2001.

“The plan targets everyone,” Knepper responded, noting that its third-party administrators are not informed of a person’s gender identity or transgender status.

Also on the panel are District Judge Albert Diaz, who was selected by President Barack Obama, and District Judge G. Stephen Agee, who was nominated to the court by President George W. Bush. There is no indication of when they will rule.

Following a June federal court decision that declared the insurance denials unconstitutional, Folwell and the state health plan’s board of trustees had to last July to restore coverage of trans-medical procedures that the plan once provided for one year in 2017.

U.S. District Judge Loretta Biggs ruled that the plan unlawfully discriminates against transgender people, violating both the Equal Protection Clause of the Constitution and Title VII of the Civil Rights Act on the basis of sex. Falwell called the ruling “legally incorrect” and filed an appeal in August.

Asking the court to uphold the lower court’s ruling, Lambda Legal senior counsel Tara Borrelli argued Wednesday on behalf of state employees that the exemptions constitute targeted discrimination. Lambda Legal and the Transgender Legal Defense & Education Fund filed the original lawsuit on behalf of the trans employees in March 2019.

Seventeen other states and Washington, D.C., all of which cover gender-affirming treatments as part of their public employee health plans, filed a lawsuit in support of the North Carolina workers.

“What they’re asking this court to do is pick up a judicial pen and save that exemption by rewriting it because what they’ve passed and what they’re actually supposed to protect is so unjustified,” Borrelli said. “It so plainly and clearly discriminates based on the gender and status of transgender people.”

Attorney defends North Carolina transgender care exemptions

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