Despite the U.S. Supreme Court’s recent ruling in U.S. v. Skrmetti, a federal district court has ruled that a health plan excluding coverage for certain gender-affirming surgeries for some minors violated Section 1557 of the Affordable Care Act (ACA). The court’s ruling, in large part, rests on the health plan’s coverage of mastectomies and breast reductions for minor males with gynecomastia, but not transgender female minors transitioning to males. The case is L.B. v. Premera Blue Cross, 2025 WL 2326966 (W.D. Wash. 2025)
The court originally issued a decision in April 2025, but before finalization of the judgment, the Supreme Court issued its Skrmetti decision. As a result, the court allowed the parties, as well as the U.S. Department of Justice, to submit additional arguments regarding the potential impact of the Skrmetti decision, if any.
In Skrmetti, the Supreme Court upheld a state law banning gender-affirming care, including puberty blockers and hormone therapy, for transgender teenagers, ruling that it did not violate the U.S. Constitution’s Equal Protection Clause. Since the Court determined that the health plan exclusion rested on no classifications based on sex, in that it prohibited the treatment for certain medical uses for all minors, it applied the lowest level of scrutiny to the law.
After considering the parties’ additional arguments, the court nonetheless concluded that the Skrmetti decision failed to alter the outcome of its previously issued decision. The court reasoned that Skrmetti involved a completely different claim than the instant Section 1557 claim and also involved a law that was dissimilar to the health plan exclusion at issue in this case. Furthermore, the court noted that Skrmetti supported its decision in that the Supreme Court reemphasized the “but-for” causation standard that it previously relied upon in its Bostock decision. In Bostock, the Supreme Court ruled that illegal discrimination based on sex encompasses firing employees based on sexual orientation or gender identity.
The court then reiterated that sex was the “but-for” reason for the plan’s exclusion. More specifically, the plan denied mastectomy coverage for minors transitioning from females to males, but, at the same time, the plan allowed it for males with no age restrictions to determine medical necessity. These inconsistent justifications and what the court referred to as “secret exceptions” for coverage eliminated any rational basis for the plan’s exclusion. As a result, the court reaffirmed its April decision finding the law violative of Section 1557.
As plan exclusions for gender-affirming care continue to be a source of constant court filings, plan sponsors and insurance companies should be wary of inviting costly litigation.
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