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Thus, through the Regulation, DHS is excluding Iowa Medicaid coverage for surgical treatment of Gender Dysphoria purely on the basis that it is treatment of Gender Dysphoria of transgender individuals.67 At the time the Regulation was adopted more than two decades ago, the IRCA did not prohibit discrimination on the basis of gender identity. At the time the Regulation was adopted, the medical consensus supported the notion that sex reassignment surgery was cosmetic surgery for a psychological condition akin to Body Dysmorphic Disorder. Ettner’s affidavit demonstrates, unlike Body Dysmorphic Disorder, Gender Dysphoria has a biological component and the current medical consensus no longer supports the conclusion that gender affirming surgery is not therapeutic. The Regulation has not kept pace with law and medicine.
Excluding Medicaid coverage for transgender care serves no “important governmental objective.” The District Court reviewed the administrative rule under intermediate or “heightened scrutiny,” which “generally applies in cases involving a ‘quasi-suspect’ classification, such as gender, sexual orientation, or illegitimacy.” To pass this test, the government entity must show the rule or law being challenged is “substantially related to a sufficiently important governmental interest.” The state asserted that the rule would save money.
[…] Petitioners’ have provided ample medical evidence establishing the current medical consensus regarding the diagnosis of Gender Dysphoria and how, in some cases, sex reassignment surgery can be medically necessary to treat the condition.
DHS cannot rely on outdated medical evidence as a timeless justification for the Regulation.
In order to pass rational basis review, the Regulation must be realistically conceivable, have a basis in fact, and not be so weak that the classification must be viewed as arbitrary.
The evidence in the record demonstrates that, even assuming there was once a justification for the classification as reflected by the Iowa Foundation Report and the rulemaking process, the medical consensus no longer supports it.
Judge Gamble rejected almost every legal argument the Iowa Attorney General’s office raised on behalf of the DHS.
This was also after DHS had received Medicaid claims for sex reassignment surgery in 1991 that DHS ultimately concluded it was required to cover.66 The language of the Regulation was added for the express purpose of denying coverage for sex reassignment surgery.The ACLU of Iowa filed this lawsuit last September on behalf of Eerie Anna Good, a trans woman who was denied Medicaid coverage for transition-related surgical care.Carol Ann Beal joined the case as a plaintiff later, after the Iowa Department of Human Services denied her appeal of a similar Medicaid denial.A two-decade-old state administrative rule “clearly discriminates against transgender Medicaid recipients on the basis of gender identity by excluding coverage for medically necessary gender affirming surgery” while covering the same surgeries for non-transgender Iowans, a Polk County District Court ruled on June 7.Chief Judge Arthur Gamble found the rule violates both Article I, section 6 of the Iowa Constitution, which guarantees equal protection, and the Iowa Civil Rights Act, which has prohibited discrimination on the basis of gender identity since 2007.