A federal appeals court is weighing whether Aetna can continue categorically classifying certain facial gender-affirming procedures as cosmetic in a case that could help define how federal anti-discrimination law applies when insurers determine medical necessity for transgender patients.
A three-judge panel of the U.S. Court of Appeals for the Second Circuit heard arguments Wednesday in Aetna’s appeal of a preliminary injunction issued by U.S. District Judge Victor Bolden in Connecticut. The underlying proposed class action was brought by transgender women who say Aetna improperly excludes facial gender-affirming surgery used to treat gender dysphoria.
Aetna’s current Clinical Policy Bulletin recognizes several forms of gender-affirming surgery as medically necessary when specified criteria are met, including breast augmentation and genital surgeries. However, the policy categorizes numerous facial procedures, including brow reconstruction, rhinoplasty, jaw reduction, chin reshaping, and tracheal shave, as “not medically necessary and cosmetic” when performed as part of gender transition.
That distinction sits at the center of the lawsuit.
In March, Bolden ruled that plaintiffs Jamie Homnick and Gennifer Herley were entitled to individualized medical-necessity reviews rather than having their requests automatically rejected under Aetna’s policy. The court concluded that the plaintiffs were likely to succeed on their claim that the categorical exclusion violates Section 1557 of the Affordable Care Act, which prohibits sex discrimination in covered health programs.
Aetna argues that the distinction is based on diagnosis and medical necessity, not transgender status. During oral arguments, attorney Charles McCloud said comparable cosmetic procedures would also be excluded for cisgender patients unless another qualifying medical condition made them medically necessary. Aetna also argues that employers ultimately determine the benefits included in their health plans, raising questions about whether the plaintiffs have standing to obtain relief from Aetna itself.
Attorneys representing the transgender plaintiffs see a fundamental difference.
Kelly Parry-Johnson of Advocates for Trans Equality argued that a cisgender patient seeking a similar procedure could receive an individualized medical review under appropriate circumstances, while a transgender patient seeking it specifically to treat gender dysphoria encounters a categorical exclusion.
The dispute therefore reaches beyond whether facial surgery can be described as cosmetic. The legal question is whether an insurer can categorically declare a procedure medically unnecessary when it is performed as part of gender transition while considering similar procedures medically necessary under other diagnoses.
For transgender patients, the distinction can have significant financial consequences. Facial gender-affirming surgery can involve multiple procedures and substantial out-of-pocket costs when insurance coverage is denied.
The Second Circuit panel, consisting of Judges Debra Ann Livingston, Sarah Merriam, and Matthew Schwartz, did not issue a decision from the bench.
