Aetna this week announced it will start covering gender reassignment surgery next year for federal workers on the insurer's plans. And the company said it will begin rolling out this coverage to many of its commercial plans over the next couple of years.
For years, many health insurance plans have denied coverage for gender reassignment benefits. But with the medical community recognizing gender identity disorder as a diagnosable condition, there has been a growing acknowledgement recently among employers and policymakers that insurers need to be covering these treatments, which otherwise can carry prohibitive costs.
Regulators in eight states and the District of Columbia now ban discrimination against treatments for gender reassignment. In the past four years, the number of large employers covering sex reassignment surgery in their health plans grew from 49 to 340, including at 28 percent of Fortune 500 firms, according to the Human Rights Campaign.
This year, the U.S. government has weighed in considerably. In May, Medicare reversed a decades-old ban on covering gender reassignment surgery in response to a 2013 lawsuit. Advocates said the Medicare decision could put pressure on more insurers to ensure equal benefits for transgender Americans, who make up 0.3 percent of the adult population.
Then in June, the federal government said it would no longer prohibit its health plans from offering gender reassignment benefits. The agency operating the Federal Employee Health Benefits program, which covers more than 8 million people, cited the "evolving professional consensus" that treatment is medically necessary for people with gender identity disorder.
For advocates, the policy change from the federal Office of Personnel Management was a welcome one. But it was also somewhat of a half-measure. OPM could have mandated that federal employee health plans provide this coverage, but it instead offered an invitation for insurers to step up and act.
"In a way, what OPM did was really modest," said Harper Jean Tobin, director of policy at the National Center for Transgender Equality. "For years, they told plans that you have to discriminate against employees in the benefit package you offer. Now OPM said, 'At the very least, we're going to say you don't have to do that anymore.'"
So far, it's looking like change is coming slowly to the federal plans. The State Department announced earlier this month it would drop the coverage exclusion from its largest health insurance plan, which covers about 31 percent of its workforce.
Very little has been announced otherwise, though advocates are expecting to gain a better sense by next week of which federal employee plans will provide gender reassignment benefits. Insurers were required to notify OPM by June 30, and details of 2015 health plans are starting to trickle out now.
OPM confirmed Friday afternoon that "a small number of carriers" will offer gender reassignment benefits in 2015. Enrollees should check the OPM Web site for plan details when they're available, the agency advised.
Without insurance, the out-of-pocket costs for gender reassignment vary greatly. Some people may only need hormone therapy, which costs hundreds of dollars a year. The cost of surgery, for those needing it, could be tens of thousands of dollars.
Interestingly, employers who have added transition-related coverage report very low costs tied to the these benefits, according to a 2013 study from the Williams Institute at the UCLA School of Law. Very few have actually used the benefit, the researchers found.
Tobin said she expects OPM eventually will require federal employee health plans to provide this coverage, instead of leaving it optional. Even without the mandate now, Tobin said she's encouraged by insurers' responses so far.
"It's very positive to see that even though OPM hasn't flat-out required it yet, that there is going to be some real changes that are really going to benefit people," she said.
This post was updated with a response from OPM.