A Polk County District Court has ruled that transgender Iowans must exhaust all administrative remedies before challenging in court a new state law designed to prevent Medicaid from covering gender-affirming surgery.
In a July 18 order dismissing the ACLU of Iowa's lawsuit on behalf of Mika Covington, Aiden Vasquez, and the LGBTQ advocacy group One Iowa, Judge David Porter wrote that the plaintiffs seeking surgery "have an adequate remedy at law" and that their case "is not ripe for judicial consideration."
In other words, Covington and Vasquez must jump through hoops that will take many months, possibly years, before any court can consider their claim that denying Medicaid coverage for medically necessary procedures violates their constitutional rights.
Porter's decision ignored evidence pointing to the law's discriminatory intent as well as its impact on the plaintiffs.
BLIND TO THE LAW'S INTENTION
Here's the full text of the Polk County District Court ruling.
Porter accepted the state's argument that the new statute does not preclude access to gender-affirming surgery. Rather, it says the Iowa Civil Rights Act "shall not require any state and local government unit [...] to provide for" such procedures. Therefore, the judge wrote, "The actual text of the Division does not prevent the Iowa Medicaid program from covering sex reassignment surgery or any other surgical procedure, if the program so chooses."
The judge acknowledged that the plaintiffs "make compelling arguments concerning the science and treatment related to gender dysphoria," which the state did not attempt to refute.
It is precisely because those arguments are compelling and because DHS [Department of Human Services] has not reviewed or studied the language of the Regulation since its original adoption in 1995 that the statute allows for interested persons, such as the Petitioners here, to request the adoption, amendment, or repeal of a rule.15 To the extent the regulations are no longer tenable, or as the District Court noted in Good, to the extent the regulations have “not kept pace with law and medicine,” then under the current state of Iowa law, administrative agencies are usually “permitted to correct their own errors before resort is had to the courts.”
Porter assumes a realistic outcome for the plaintiffs is that the Iowa DHS will, upon request, repeal or revise its rule barring Medicaid coverage for gender-affirming surgery.
In what fantasy world is he living?
The expressly stated purpose of the new law was to get around the Iowa Supreme Court ruling in Good, which invalidated the longstanding DHS rule. The Republican senator who introduced the language admitted that the goal was to reinstate the old policy. Governor Kim Reynolds has repeatedly said she signed the law to restore what was the state's position for decades.
Under that policy, no transgender Iowans were able to obtain Medicaid coverage for gender-affirming surgery, regardless of their condition or testimony from their doctors. That's why the Good case reached the Iowa Supreme Court in the first place.
DHS staff have not responded to my repeated inquiries seeking clarification on whether all transgender Iowans will be denied Medicaid coverage for surgeries related to their gender dysphoria. But the DHS director serves at the pleasure of the governor. In fact, Reynolds forced Jerry Foxhoven out of that job last month. How likely is it that the agency's next leader and senior Medicaid officials will defy the governor's wishes and approve coverage for trans Iowans' surgeries?
BLIND TO THE LAW'S IMPACT
The District Court ruling suggests that Covington and Vasquez should formally request pre-authorization for surgeries. If denied, they should appeal to their Medicaid managed-care organization, and subsequently within the DHS, before turning to the courts. The administrative rule-making process alone typically takes four to six months. Exhausting intra-agency appeals would take at least that long.
The judge knows this process could be lengthy, but wasn't convinced of "the dire need for treatment and the likelihood of irreparable harm, if Petitioners do not receive that treatment immediately." (emphasis in original) Nor was he persuaded that the new law has harmed Covington and Vasquez in any “concrete ways."
The Iowa Supreme Court held unanimously that gender-affirming surgery is medically necessary for some transgender people. In their initial court filing, the ACLU demonstrated that gender dysphoria is linked to the plaintiffs' anxiety and depression, and that their health care providers have determined surgery would be an effective treatment. Furthermore, affidavits showed Vasquez already was forced to cancel a scheduled pre-operative consultation, because his doctor could not confirm that appointment would be covered under Iowa Medicaid.
I wonder how Judge Porter would feel about putting off for a year or more care his doctor had recommended to treat a debilitating condition. What if he were expected to spend much of his time and energy during that long delay fighting for insurance to cover his procedure, when the Iowa legislature and governor had just enacted a law with the explicit goal of blocking coverage for people like him?
The ACLU confirmed on July 19 that plaintiffs will appeal to the Iowa Supreme Court. In a written statement, One Iowa executive director Daniel Hoffman-Zinnel said,
No one, including transgender Iowans, should be denied the medical care they need. Being denied this medically necessary care puts the health and lives of transgender Iowans who rely on Medicaid at risk, including increased risk of depression, anxiety, and suicidal thoughts for transgender individuals who can't access the care their doctors prescribe. That's why we're appealing this decision.
Incidentally, the District Court ruling held that One Iowa lacks standing to challenge the statute, because the group has only a "legal interest" in the case. One Iowa cannot suffer any "personal injury," since it is not a Medicaid recipient and never will be, Porter wrote.
I've previously argued that the attack on transgender and intersex Iowans' right to medically necessary care won't stand up in court. I still believe that the latest amendment to the Iowa Civil Rights Act serves no legitimate purpose, was motivated by animus toward a disfavored minority group, and would not withstand scrutiny, if considered on the merits.
However, an Iowa Supreme Court majority could punt on the same grounds as the District Court, forcing trans people to engage in lengthy, futile efforts to secure Medicaid coverage before Iowa courts return to this subject.
P.S.- I generally avoid speculating about judges' motives (with rare exceptions), but it's worth noting that Porter, whom Governor Terry Branstad appointed to the District Court in 2015, has higher ambitions. He applied for a seat on the Iowa Supreme Court earlier this year and is young enough to do so again when new vacancies arise. (Several current justices will reach the mandatory retirement age of 72 within the next decade.)
Republicans just stacked the State Judicial Nominating Commission to give Reynolds more control over who ends up on the short list of candidates to serve on the Supreme Court or Court of Appeals.
The governor has shown that she has little regard for well-researched legal opinions about her authority, nor does she feel obliged to comply with the spirit of the law, or the letter of the law, or the requirements of the constitution, when any of those things stand between her and some political goal. I doubt she or her appointees on the State Judicial Nominating Commission would ever elevate a judge who ruled against the governor in a high-profile case. So dismissing this lawsuit won't adversely affect Porter's long-term prospects, even if the Iowa Supreme Court reverses the lower-court ruling.
P.P.S.- The District Court did not address an argument the Attorney General's office advanced on behalf of the state: the DHS rule barring Medicaid coverage for gender-affirming surgery "serves legitimate, nondiscriminatory government interests," specifically "the purpose of conserving limited state resources." If and when a court considers the merits of this case, the defense will need to prove the state has some legitimate reason (or an important reason, if the court applies heightened scrutiny) not to cover gender-affirming surgery under Medicaid.
Some Republican lawmakers pretended they were pushing this carve-out to the Iowa Civil Rights Act in order to save money. The argument is laughable. For one thing, the bottom surgery Covington and Vasquez are seeking may cost tens of thousands of dollars. That's far less expensive than many other procedures covered by Medicaid, from cancer treatment to organ transplants.
Furthermore, when Republicans added this discriminatory provision to the health and human services budget bill (House File 766), they removed language from the same bill that could have helped the state recover millions of dollars in excessive payments to fill prescriptions for Medicaid recipients. The very same bill also included a supplemental appropriation of $150 million for Medicaid during the 2019 fiscal year.
Since Reynolds signed this bill in May, her administration negotiated contracts that will hand over hundreds of millions more dollars ($115 million from state coffers) during the 2020 fiscal year to the for-profit companies that manage care for Iowans on Medicaid.
The state should drop the pretense that cost considerations drive any of its Medicaid-related policies.