Republicans slipped a couple of nasty surprises into the health and human services budget on the penultimate day of the Iowa legislature’s 2019 session. One of the new provisions in House File 766 would amend the Iowa Civil Rights Act to deprive transgender and intersex Iowans of access to surgery through Medicaid or other public health insurance programs.

Governor Kim Reynolds should strike this language because denying health care to people in need is reprehensible.

If she lacks the empathy to comprehend why punching down on a marginalized group is wrong, the governor should use her item veto power for a pragmatic reason: the Iowa Supreme Court is unlikely to let this discriminatory act stand.

BEGGING FOR A LAWSUIT

Since 2007, the Iowa Civil Rights Act has included sexual orientation and gender identity on the list of protected classes. Last month, the state Supreme Court cited that law as it unanimously invalidated a Department of Human Services rule withholding Medicaid coverage for gender-affirming surgeries. Justice Susan Christensen, a Reynolds appointee, wrote that opinion, which did not address the plaintiffs’ equal protection claim under Article I, Section 6 of the Iowa Constitution.

Division XX of the health and human services budget would insert the rejected administrative rule in the portion of the civil rights code forbidding unfair practices in “accommodations or services.”

NEW SUBSECTION. 3. This section shall not require any state or local government unit or tax-supported district to provide for sex reassignment surgery or any other cosmetic, reconstructive, or plastic surgery procedure related to transsexualism, hermaphroditism, gender identity disorder, or body dysmorphic disorder.
Sec. 94. EFFECTIVE DATE. This division of this Act, being deemed of immediate importance, takes effect upon enactment.

GOP lawmakers may not realize that “transsexualism,” “hermaphroditism” and “gender identity disorder” have become outdated terms since the DHS adopted its discriminatory rule.

What they lacked in expertise, they made up for in impatience. Republicans were so motivated to stop transgender and intersex Iowans from accessing surgical care that they couldn’t wait until July 1, when most of the budget bill will go into effect. They declared the matter “of immediate importance.”

If Reynolds signs this language into law, the ACLU of Iowa will surely take the state to court for a third time on behalf of transgender plaintiffs. The group’s executive director Mark Stringer told the Des Moines Register the proposal has “no basis in medicine or science” and “is a clear violation of the equal protection under the Iowa Constitution because it would discriminate against people simply because they are transgender.”

The Attorney General’s office declined to comment beyond what Attorney General Tom Miller said on Iowa Public Television’s “Iowa Press” program over the weekend:

Well, I hesitate to predict what the court will do on situations. But just by way of background, the Supreme Court held that the statutory law, the civil rights law, required these procedures to be covered. Now, the legislature since it’s a statute, you know, potentially has the authority to override that. However, the Supreme Court held in abeyance because it wasn’t necessary the constitutional claim. So if they are successful in overriding the statute the constitutional claim would then be before the court.

This non-attorney sees four big problems for the state if this case goes to the high court.

1. THE COURT ALREADY HELD THAT THESE SURGERIES ARE MEDICALLY NECESSARY

Justice Christensen’s ruling was neither long nor complicated.

The first section, laying out facts of the case, accepted the determination of health care providers for plaintiffs EerieAnna Good and Carol Beal: surgery is necessary to treat their gender dysphoria and alleviate their accompanying anxiety and depression. Research has documented that transgender people are far more likely to experience “serious psychological distress” and to attempt suicide than are cisgender people. In addition, an April 2018 article in the AMA Journal of Ethics noted,

There is strong and rapidly accumulating evidence that patients with gender dysphoria benefit from mental health, hormonal, and reconstructive surgical interventions during the social transition from their assigned to their intrinsic gender. […] This convincing body of evidence has led many major professional organizations, including the American Medical Association [22], the World Professional Association for Transgender Health [23], the National Association of Social Workers [24], the American Public Health Association [25], the American Society of Plastic Surgeons, the American Psychiatric Association, the American Psychological Association, the American Academy of Family Physicians, the American College of Obstetricians and Gynecologists, and the Endocrine Society to endorse the medical necessity of gender-affirming care, including gender-affirming surgery, for people with gender dysphoria [26].

Based on the preponderance of evidence and professional expert opinion, the insurance industry has, over the past 5-10 years, shifted from viewing gender-affirming surgery as “cosmetic” or “elective” to recognizing that surgery is part of the medically necessary treatment for gender dysphoria [27]. […] It is also worth noting that gender-affirming care, including surgery, is a covered health benefit in most developed countries [34].

The state did not even attempt to persuade the Supreme Court that the plaintiffs’ desired surgery was not medically necessary. Rather, its attorneys argued that the DHS was not a “public accommodation” subject to regulation under the civil rights code, because that term “is limited to physical places, establishments, or facilities.” The justices unanimously disagreed.

“public accommodation” includes a unit of state government that offers “benefits [or] grants . . . to the public.” Medicaid is such a benefit or grant. Government benefits and grants are not normally dispersed in person at physical locations. […]

The title of the statute Good and Beal rest their ICRA claims on—“Unfair practices—accommodations or services”—also informs our determination that the legislature intended to include the DHS as a “public accommodation” under the ICRA. SeeIowa Code § 216.7. The title of this section and its definition of a “public accommodation” reveal the legislature intended to include government agencies in its prohibition on discriminatory practices based on gender identity “in the furnishing of [an agency’s] accommodations, advantages, facilities, services, or privileges.”

The state also claimed the DHS rule “does not discriminate based on gender identity because transgender Medicaid beneficiaries and nontransgender Medicaid beneficiaries in Iowa alike are not entitled to gender-affirming surgical procedures.” Nice try, but:

The ICRA’s gender identity classification encompasses transgender individuals—especially those who have gender dysphoria—because discrimination against these individuals is based on the nonconformity between their gender identity and biological sex. […] The record does not support the DHS’s position that rule 441—78.1(4) is nondiscriminatory because its exclusion of coverage for gender-affirming surgical procedures encompasses the broader category of “cosmetic, reconstructive, or plastic surgery” that is “performed primarily for psychological purposes.” Iowa Admin. Code r. 441—78.1(4). The DHS expressly denied Good and Beal coverage for their surgical procedures because they were “related to transsexualism . . . [or] gender identity disorders” and “for the purpose of sex reassignment.” Id.r. 441—78.1(4)(b). Moreover, the rule authorizes payment for some cosmetic, reconstructive, and plastic surgeries that serve psychological purposes—e.g., “[r]evision of disfiguring and extensive scars resulting from neoplastic surgery” and “[c]orrection of a congenital anomaly.” Id. r. 441—78.1(4)(a). Yet, it prohibits coverage for this same procedure if a transgender individual. Id. r. 441—78.1(4)(b).

If Good and Beal or similarly situated plaintiffs end up back at the Supreme Court, the state will not be able to credibly argue that gender-affirming surgery is an elective procedure.

2. THE COURT WILL SUBJECT THIS LANGUAGE TO HEIGHTENED SCRUTINY

Adhering to its “doctrine of constitutional avoidance,” the court did not consider whether denying coverage for gender-affirming surgery violates the plaintiffs’ right to equal protection under Article I, Section 6. Justices won’t be able to avoid that question if Reynolds signs this portion of House File 766 into law.

Nor will the state be able to argue that the new code language has a “rational basis.” Courts apply that test “in cases where no fundamental rights or suspect classifications are at issue.”

Gender identity is still a protected class under Iowa law. So the Supreme Court would likely apply an “intermediate scrutiny” standard to the new limitations in the civil rights act, as it did in the Varnum v Brien decision concerning the Defense of Marriage Act.

Whereas the rational basis test requires a government entity to show only that a law serves some “legitimate state interest”, intermediate scrutiny sets the bar higher.

To pass intermediate scrutiny, the challenged law must:

further an important government interest
and must do so by means that are substantially related to that interest.

Good luck with that.

3. THIS RESTRICTION SERVES NO IMPORTANT GOVERNMENT INTEREST

The House floor manager, State Representative Joel Fry, did not offer any justification for this part of the bill when presenting the revised human services budget on April 27. But some Republican lawmakers have spun their hateful act as a cost-saving measure. During the Iowa Senate debate on April 26, Senator Mark Costello depicted gender-affirming surgeries as expensive. At an Ankeny Chamber of Commerce event on April 29, Senate Majority Leader Jack Whitver asserted that such procedures would be a drain on the state budget.

Depending on the patient’s needs, gender-affirming surgery may cost tens of thousands of dollars or more than $100,000. Given that trans people comprise a small percentage of the population, and not all people with gender dysphoria want surgery, those costs won’t be significant in a Medicaid budget approaching $2 billion annually.

The Illinois Department of Healthcare and Family Services announced a few weeks ago that its Medicaid program will cover gender-affirming surgeries.

In studying other state policies, the Department found that in addition to addressing the struggles associated with gender dysphoria, gender affirming surgery is also cost-effective. HFS determined that the policies of the State of Vermont particularly offer a comprehensive and appropriate approach and has been using these as a model.

Coverage for these procedures serve to prevent negative health impacts – such as depression and suicide. Seventeen states and the District of Columbia offer these services and have not reported significant cost increases.

A study of transgender people in the U.S. military estimated that covering gender transition-related health care for active-duty personnel would increase costs by just 0.04 percent to 0.13 percent annually. Not only that, the policy could save money on other medical expenses.

“The cost overall is pretty negligible,” Dr [Ruben] Hopwood said. “In single sections it’s going to be kind of high, but certainly less expensive than HIV and cancer treatment, and we treat that routinely. It’s got to be put into perspective, and the sensational part about who is being treated has to be removed from the equation for people to think clearly and really look at things without all of the kneejerk visceral reactions that come into play.” […]

“The number one cost and drag on health care, on systems, is major depression and the cost of disability for people who cannot get up and go to work,” Dr Hopwood said. “The effect (of transition care) is that you take people who are otherwise going to be living off of disability and public services and you get them back into productive adult participation in a society.”

Democratic State Senator Joe Bolkcom drove that point home in a Senate floor speech on April 26 (starting around 2:27:00 of this video). The bill represented an attack on the physical and emotional well-being of transgender Iowans, with potentially life-threatening consequences, he said.

After laying out his case against a “cruel” and “ignorant” bill, Bolkcom had some questions for the floor manager Costello. I pulled the relevant clip.

Asked to explain the thinking behind this legislation, Costello replied (emphasis added),

Well, as you probably know, this language was in administrative code for, has been for years, and it was always practiced that way. A recent court case was decided that changed and said no, that doesn’t count, you have to, you are forced to provide those surgeries.

So we’re, we’re changing the policy back to they may not–they’re [not] forced to.

Now as you know, that’s a pretty expensive surgery. I don’t know that I agree with you that it is always medically necessary, which is what Medicaid is about.

So we’re just taking the code that was, and saying that no, it’s going to be the way it has been prior to this court decision, and I think a lot of people might have trouble paying for this type of surgery, thinking that’s not maybe a proper use of federal, of our state monies.

So that’s–we’re just trying to react to the lawsuit that came up.

Costello is not a health care professional, so his view on what is “medically necessary” carries no weight. And if Republican lawmakers were so frugal, they would not have left millions of dollars on the table by blocking an audit of prescription drug spending through Medicaid.

Maybe it’s true that “a lot of people” dislike the idea of paying for a transgender Iowan’s surgery. But animus toward a historically disfavored group is not a legitimate government interest, let alone an important interest.

The real motivation for this code language peeked through again when Bolkcom questioned Costello a second time later in the day.

Could the Republican elaborate on his concerns that medically-necessary surgery for transgender Iowans might be too expensive?

Costello: Well, we have, uh, limited benefits, limited benefits for–there are certain things we do cover and certain things we don’t cover. And I’d just point out that this is a rather costly procedure, and that would be a factor we’d consider in whether we want to do this.

Bolkcom: Do you think that people that need organ transplants, that I assume are really expensive, that we should decide on whether or not we’re going to support people who need organ transplants under the Medicaid program and have a cost test on that? Do you think that would be appropriate?

Costello: I don’t know what you’re getting at. I guess if the transplant was appropriate and available, I think we should do it.

Bolkcom: And if it costs a lot of money, you wouldn’t be–that wouldn’t bother you? Because I think they’re pretty expensive. I would guess they’re more expensive than some of these, kind of more minor surgical procedures that a trangendered Iowan might want to have.

Costello: Certainly we want to try and help people with the needs they have. I just, Joe, I get–I do not think that most taxpayers want to pay for this type of surgery, which you, you would argue is not elective. Many people would think it was elective.

Bolkcom: Right. And how about people with brain injuries that need rehabilitation. Is that something that you’d be ok paying for?

Costello: [pauses, looking bemused] Yes.

Bolkcom: And it costs a lot of money for senior citizens on Medicaid in our nursing homes. That’s ok? You’re ok with that, even though it’s probably expensive, one of the more expensive things?

Costello: [smiles] I’ve got 23.5 million dollars toward that.

Bolkcom: Thank you, Senator Costello. So, the Medicaid program pays for all sorts of things. Some are expensive, really expensive, and some are not. We just heard Senator Costello describe, kind of, things he apparently believes Iowans are ok to pay for. And then a medically necessary procedure maybe a transgender Iowan might need, but people kind of don’t like paying for that, so we need this language in the bill.

The Iowa Supreme Court’s Varnum decision noted that the “history of discrimination suggests any legislative burdens placed on lesbian and gay people as a class ‘are more likely than others to reflect deep-seated prejudice rather than legislative rationality in pursuit of some legitimate objective.'”

By the same token, Republican lawmakers appear to have pandered to widespread prejudice against trans people and popular misconceptions about what treatments are elective.

Democratic State Senator Zach Wahls hammered the equal protection point home when he had a chance to ask why Republicans are “targeting a vulnerable group of people.”

Wahls: Do you believe that transgender people should be treated equally?

Costello: Yes.

Wahls: Yes, you do.

Costello: I, I don’t see why we should treat them any differently than anyone else.

Wahls: Do you believe that transgender people should be treated equally when it comes to their health care?

Costello: I think that’s true, yeah.

Wahls: You do believe that.

Costello: Yeah.

Wahls: Do you believe that this amendment treats transgender people equally when it comes to their health care?

Costello: I’m not sure how to really look at it, because it’s something that no one else would want to have done. So, I just, I’m not sure how to look at whether that’s equal or not, Zach.

Wahls: OK. So you do believe that transgender people should be treated equally, and you believe that transgender people should be treated equally when it comes to their health care, but you’re not sure if this amendment treats transgender people equally when it comes to their health care.

Costello: I think people can look at it different ways.

Wahls: How do you look at it?

Costello: I think it’s something that not everyone would want to do. So it’s not–there, you know, there’s certain things that someone else might want to have done that we wouldn’t pay for either. Cosmetic surgeries, things like that.

Wahls: And who do you think would want to have these surgeries?

Costello: I suppose someone who is, wants to change their–that are transgender.

Wahls: People who are transgender would want to have these surgeries.

Costello: Yeah.

Costello’s practically writing the plaintiff’s brief.

4. DENYING CARE FOR INTERSEX IOWANS ALSO COULD BE UNCONSTITUTIONAL

What the Republican bill calls by the archaic name “hermaphroditism” could refer to any number of intersex conditions (sometimes called disorders of sex development).

Democratic State Representative Liz Bennett devoted her House floor speech on April 27 to highlighting the health and human service budget’s impact on trans or intersex Iowans. Her remarks begin at 11:53:50 on this video. Bennett noted that “about as many people as have red hair have an intersex condition.”

Not all intersex people need or want surgery, but for some conditions, it’s essential. Surgery is “is the only treatment available” to correct hypospadia, where the opening of the urethra isn’t at the end of the penis. (It is thought to be the most common intersex condition.)

Surgery for a hypospadia is typically outpatient; one family paid more than $11,000. That pales in comparison to what Medicaid might spend on a cancer patient.

Some intersex people want surgery so that their appearance will conform to one gender. Bennett told her Iowa House colleagues, “Let’s be clear that with this bill, a boy who developed breasts at puberty because of hormonal issues might not be able to have surgery to have those removed if [it] is necessary. I want you to think about what that might have felt like for you when you were growing up.”

Since intersex conditions are relatively rare, covering these surgeries couldn’t possibly strain Iowa’s $2 billion Medicaid budget. Republicans didn’t articulate any important government interest or even a rational basis for excluding such procedures from the program.

I don’t know whether case law supports putting intersex people in the “gender” or “gender identity” protected classes, but the ACLU is probably researching the subject. Either an adult patient whose physician has recommended surgery or the parent of a child with a strong medical case could be sympathetic plaintiffs.

FINAL THOUGHTS

To my knowledge, Reynolds hasn’t commented publicly on last month’s Supreme Court ruling, written by a justice she appointed and admires.

One would hope the governor would feel some compassion for her transgender and intersex constituents.

Alternatively, maybe Reynolds can be persuaded to do the right thing out of self-interest. Does she want to be remembered as the Iowa governor who sought to narrow the scope of the civil rights act? Who went to the mat to make life worse for people who have already traveled a difficult road?

She could placate the mean-spirited conservatives who picked this fight, but do the math: three current justices (Chief Justice Mark Cady, Brent Appel, and David Wiggins) participated in the Varnum decision and would certainly reject this policy on similar grounds. Does she want to roll the dice on none of the other four justices (Christensen, Edward Mansfield, Christopher McDonald, and Thomas Waterman) joining them?

Reynolds doesn’t like to lose. In February, she decided not to appeal a lower-court ruling that struck down the abortion ban she had signed last year.

She could save everyone a lot of time and money by killing a policy that wasn’t properly vetted and doesn’t belong in the health and human services budget.

The governor has until June 3 (30 days after adjournment, not counting Sundays or Memorial Day) to sign or veto bills passed during the closing days of the legislative session. Iowans can urge Reynolds to item veto Division XX from House File 766 by submitting a written comment or calling her office at (515) 281-5211.