With Gender-Affirming Care Under Attack, U.S. Supreme Court Supports Healthcare Discrimination Lawsuits

On January 18, 2022, the U.S. Supreme Court refused to overturn a lower court ruling that allowed the North Carolina State Health Plan to be sued for denying comprehensive gender-affirming healthcare coverage to transgender state employees or their transgender dependents.

This move upheld rulings from the U.S. District Court for the Middle District of North Carolina and the U.S. Court of Appeals for the Fourth Circuit which ruled that the North Carolina State Health Plan, a state entity, could be sued under claims that its actions violated the healthcare nondiscrimination law that is part of the Affordable Care Act. They found that by accepting federal financial assistance the state entity had waived its “sovereign immunity” (the legal doctrine that precludes bringing a lawsuit against the state without its consent). Determined to continue denying healthcare coverage for transgender state employees, the State Health Plan appealed to the Fourth Circuit.

The Fourth Circuit decision from 2021 marked the first time that a federal appellate court in the United States has ruled that claims of “sovereign immunity” do not protect state entities from liability under the Affordable Care Act if they receive federal funding.

Omar Gonzalez-Pagan, Senior Attorney and Health Care Strategist at Lambda Legal, one of the plaintiffs in the case, Kadel v. Folwell, said in a prepared release, “We are pleased that the Supreme Court decided not to review this case and that we can now focus on holding North Carolina’s State Health Plan accountable for its discriminatory and harmful refusal to provide comprehensive health care coverage–including for gender-affirming care—to all its state employees and their dependents… Today’s decision protects the rights of marginalized people, including LGBTQ people and people living with HIV, to seek justice and obtain relief in court if they are subjected to health care discrimination.”