Transgender State Workers Are Facing Whiplash

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Jane, who was born male, was a skinny kid who was frequently picked on. Classmates hurled slurs and accused Jane of being too girly or gay. But she didn’t like boys romantically–or even platonically.

“I always had a life where I just didn’t really fit in with guys,” Jane said. “I always kind of felt like I was putting on a mask.” In relationships with women in adulthood, Jane struggled. “I’m looked at as being a man, and I’m supposed to fill this role that I just never felt comfortable in.”

With time for introspection during the pandemic, Jane came to understand she was a woman at the age of 36. (The Assembly agreed to use a pseudonym to protect her privacy.) Over time, she came to identify as both transgender and a lesbian. “A lot of people could kind of scoff at it or be confused about it,” Jane said, “but that’s what it is for me.”

While time was on Jane’s side when everyone was stuck at home, it wasn’t this summer. 

As a state employee working for a Triangle-area university, Jane, now 41, was preapproved and scheduled for gender-affirming surgery at UNC Health in early November. It was the last major step in her physical transition, which had been covered by the State Health Plan that insures 748,000 public employees and their dependents. 

But less than two weeks before her surgery, Jane received notice that it was no longer covered, and she’d have to come up with $44,000 to pay for it. Without the out-of-pocket funds, Jane was forced to cancel. During the time she thought she’d be in recovery, she began researching the lawsuits that led to the policy change. 

Over the summer, the U.S. Supreme Court cleared the way for North Carolina’s insurance plan to deny gender-affirming care when justices upheld a Tennessee law that bans providers from prescribing hormone therapy to transgender minors. 

An estimated 60,400 people identify as transgender in North Carolina, less than 1% of the population. Though the state plan’s exclusion only affects a small sliver of public employees, Jane’s experience highlights the tumultuous reversal of once trans-friendly policies as lawmakers and judges weigh in on the fate of transition care across the country. 

Public support for gender-affirming care has weakened even among liberals as officials debate insurance coverage, leaving people like Jane feeling even more isolated. 

“I feel like I’m on an island,” she said. 

Emotional Whiplash

In two press releases in June, the State Health Plan warned that the Supreme Court’s decision meant it would likely soon end coverage for gender-affirming care. Few news articles followed. Jane said she was unaware of the impending change; her doctors didn’t flag it, either.

Leading up to her surgery date, she had five visits–three in-person, two virtual–with her UNC Health providers, according to medical records Jane shared with The Assembly. Jane’s first consultation took place weeks after the Supreme Court decision.

At each visit, Jane said she asked for updates on policies that may affect her coverage. “Worried about coverage. State health plan,” her doctor wrote in an after-visit summary in September.

“I feel like I’m on an island.”

Jane, state employee

Had Jane known the plan intended to cut her care, she could have avoided the emotional whiplash that followed. 

She received a preapproval letter from the State Health Plan and Aetna on October 6, according to records shared with The Assembly. The state canceled coverage of the care on October 15, and UNC Health was the first to let her know through a message on her online medical portal on October 21.

In a November 4 online message, a UNC Health representative apologized to Jane. “It’s really unfair,” the message said.

Alan Wolf, spokesperson for UNC Health, said it notified “the handful of impacted patients as quickly as possible” as soon as it learned of the state’s decision. 

It’s not clear exactly how many people were affected by the state’s decision. Wolf didn’t address how many UNC patients were affected, citing privacy laws. 

Jane doesn’t blame her providers; she’s more frustrated that the State Health Plan never warned her personally that her coverage would soon expire than by the denial itself. “I don’t think a press release counts as communication with people that are on a state health care plan,” she said. 

State Treasurer Brad Briner, who oversees the State Health Plan, said it communicated about the Supreme Court ruling publicly via the press releases months ahead of the policy taking effect.

“We never want to sneak up on people,” Briner, a Republican, told The Assembly. “We were very clear and very public on what we thought the implications of that decision were.”

The aftermath of her surgical cancellation has been demeaning, Jane said. It has forced her to reveal private health information to family and friends who anticipated her taking medical leave and wondered why she hadn’t.

Briner’s decision, Jane said, is “state-sanctioned discrimination.” Plan leaders deny that; they’ve said the plan simply can’t afford to cover everything. 

Now Jane is stuck in limbo, longing for closure that feels painfully out of reach. 

‘Fierce Scientific and Policy Debates’

The State Health Plan has mostly excluded transition-related care from its coverage since the 1990s. (To comply with federal antidiscrimination rules, the plan covered it for one year in 2017.) While the plan on paper excluded mental health benefits related to gender transformation, it never actually enforced this aspect of its ban, according to legal filings. 

In 2019, three transgender adults and the parents of two transgender teenagers sued the plan and its leaders, including Republican former state Treasurer Dale Folwell, for excluding the care. Then-Attorney General Josh Stein, a Democrat, declined to defend the plan in the case. 

“We never want to sneak up on people. We were very clear and very public on what we thought the implications of that decision were.”

State Treasurer Brad Briner

In 2022, a federal district judge sided with the state employees and forced the plan to cover the care. The plan appealed, and the 4th Circuit U.S. Court of Appeals in 2024 again sided with the state employees.

During the period the care was provided in North Carolina, the plan paid claims for genital surgeries, laser hair removal, and breast lifts, reductions, and augmentations, according to a court filing by the plan’s previous insurance administrator.

As part of its ruling upholding Tennessee’s Medicaid restrictions, the U.S. Supreme Court vacated the order against North Carolina’s plan. 

“This case carries with it the weight of fierce scientific and policy debates about the safety, efficacy, and propriety of medical treatments in an evolving field,” Chief Justice John Roberts wrote in the majority opinion. “Questions regarding the law’s policy are thus appropriately left to the people.” 

The North Carolina State Health Plan brought back its exclusion as soon as the necessary court paperwork arrived, a few months after Roberts filed his opinion. 

The plan is the state’s largest employer-sponsored insurance group. Last year, it processed an estimated $3.7 billion in medical claims.

Facing a half-billion-dollar deficit when he took office last year, Briner has steered the plan back toward solvency, in part by raising premiums for the first time in seven years. The next phase of the turnaround, Briner said, will tackle runaway medical expenses, which have consistently outpaced the state funding needed to support the plan. “We’re still in the first inning,” he said.

Employee premiums and General Assembly appropriations fund the pool of money that pays for the plan’s medical claims. The state contributes $8,500 annually for each employee as part of a benefits package, and employees also contribute through monthly premiums and retirement health fund contributions deducted from their paychecks.

Besides gender-affirming care, wildly popular GLP-1s are the only other categorical exclusion the plan has enacted in the past several years. The plan cut coverage for the drugs for the purpose of weight loss in 2024, though the medications are still covered for members with diabetes.

As retail costs have calmed, Briner said the plan hopes to reinstate coverage of weight loss drugs this year for those who need it the most. 

Both GLP-1s and gender-affirming care have faced questions about medical necessity, but spending on the weight loss drugs, estimated to top $170 million in 2024, dwarfs costs related to gender transition. 

“This case carries with it the weight of fierce scientific and policy debates about the safety, efficacy, and propriety of medical treatments in an evolving field.” 

Chief Justice John Roberts

For the few years the plan did cover transition-related procedures, the cost took up a tiny fraction of overall spending, amounting to 0.07% of the plan’s medical claims in 2024, according to a plan spokesperson. Still, that amount is hard for some conservative policymakers to swallow. 

Gender-affirming care cost the plan about $404,600 in 2017, according to court filings.

Following the 2022 court order, the plan paid nearly $1.6 million in surgical costs in 2023 to cover transition procedures for 579 members, 68 of whom were minors. The following year, it spent $2.4 million on the surgical claims for 719 members, including 70 minors. (The tallies do not include hormone-related expenses.) 

For Jane, arguments that the care strains the plan’s resources fall flat. “I deserve the same care as everyone else,” she said. “I don’t get to pick and choose whose care I think I should be able to pay for. Why do they do that to me?”

Those opposed to subsidizing the care argue the field is cosmetic and speculative. Supporters assert it’s life-saving and essential.

“Nearly every major medical association in the United States is in total accord that gender-affirming care is medically necessary care,” said Jaclyn Maffetore, a senior staff attorney at the American Civil Liberties Union of North Carolina Legal Foundation. 

The ACLU successfully pressured the state to transfer a transgender inmate to a women’s prison in 2019 and later sued to try to make the state cover her transition surgery. While a judge ruled the state violated the woman’s rights in denying her surgery in 2024, she was released soon after, rendering most of the lingering legal challenges moot. 

“We are seeing a nationwide trend toward attacking our trans neighbors in all kinds of arenas,” Maffetore said. “Medical professionals are the ones that should be making these calls, not legislators.”

North Carolina as a Battleground

A decade ago, coverage of gender-affirming care had become commonplace for both private and public sector employers. But the pendulum has since swung, with institutions scaling back policies and coverage under new federal guidance from the Trump administration. 

Days after the Supreme Court ruling, the Centers for Medicare & Medicaid Services ordered insurers on the Affordable Care Act individual marketplace to stop covering the care as an essential benefit, beginning this year. 

Last month, the U.S. Department of Health and Human Services announced its plan to withhold Medicaid and Medicare payments to hospitals that provide such care for minors. 

Since enacting the “bathroom bill” in 2012, which ordered people to use facilities aligned with their sex at birth, North Carolina has been a legal battleground for trans rights. The U.S. Department of Justice under the Obama administration sued the state over the legislation, and, crushed by corporate scrutiny, lawmakers partially reversed the law in 2017 and let other parts expire. 

But as federal tolerance for social justice issues has waned under Trump, trans causes have lost several times at the nation’s highest court.

In May, the U.S. Supreme Court upheld the administration’s ban on transgender military service members; in November, it allowed the Trump administration to require passports to list an individual’s birth sex; and in a hearing in January, the justices appeared poised to allow states to ban trans athletes from participating in female sports teams.

As states attempt to restrict the care, legal challenges have percolated across the country.

In a brief supporting appeals to the U.S. Supreme Court regarding health plan coverage, 24 Republican-led states argued for autonomy: “States should not be forced to pay for hotly disputed interventions.”

The conservative evangelical group NC Values Institute also weighed in to support North Carolina’s decision to drop coverage, writing in a separate 2024 brief that many people of faith harbor “moral and religious objections to transgender ideology and conduct.”

“States should not be forced to pay for hotly disputed interventions.”

Supreme Court brief from 24 Republican-led states

“The science is unsettled, the treatments are novel, and the long-term risks remain unknown,” the group wrote. 

But eight leading medical groups, including the American Medical Association, came out against North Carolina’s policy and argued it reinforces stigmas and leads to increased psychological distress among transgender individuals. 

Treatment ranges from talk therapy to surgery for gender dysphoria, the clinical diagnosis for the distress endured by those whose gender identity isn’t aligned with their birth sex. Hormone replacement therapy is clinically proven to be effective at reducing dysphoria and has a low rate of complications (as do surgical procedures), the medical groups wrote in a 2021 court brief. 

Democrats Quieter

States have health insurance plans for their employees, and they also run Medicaid programs for lower-income residents. Twenty-six state Medicaid programs explicitly cover the care; 11 explicitly ban it for everyone; three ban it only for minors; and 10, like North Carolina, have unclear or no explicit policies. 

A spokesperson for the North Carolina Department of Health and Human Services, which administers Medicaid, said gender dysphoria care is not covered by any of its plans. 

But a spokesperson for United Healthcare, which insures about 480,000 Medicaid enrollees, said its plans in the state cover the care “according to published evidence-based clinical guidelines” and applicable rules. 

Maya Franklin, a spokesperson for Blue Cross Blue Shield of North Carolina, which insures 605,000 Medicaid members in the state, said that while the company follows all applicable regulations, the field has some gray areas. “Some related laws are clear, while there remains uncertainty around other regulatory and legislative guidelines related to this specialized care,” she said in a statement. 

In 2011, North Carolina Medicaid listed “gender transformation” among a list of procedures requiring prior approval. It’s unclear when, and under what directive, the program stopped covering the care. The state health department spokesperson didn’t respond to follow-up inquiries. 

A small subset of people who identify as detransitioners–who received hormones and  transitioned medically, often as minors, before growing to regret it–have fueled conservative arguments that they’re trying to protect children from potentially irreversible decisions. President Trump cited such arguments in one of his first executive orders after taking office in 2025, seeking to prohibit or limit procedures on minors. 

North Carolina lawmakers passed their own legislation well before Trump’s directive. In 2023, the General Assembly passed House Bill 808, banning the use of state funds for gender transition surgery or hormones for minors, and blocked physicians from providing the care. 

When introducing the bill, primary sponsor Rep. Hugh Blackwell, a Burke County Republican, framed the legislation as protecting children. “It’s a choice that should be made when the child is of age,” he said. Blackwell didn’t respond to a request for comment.

Last year, Atrium Health and UNC Health separately raised their minimum age for patients receiving transition-related care to 19, exceeding the law’s requirements. 

While the law only applies to minors, there may be an appetite to expand it, though no pending bills this legislative session appear to include the provision.

“Sen. Berger believes no state funds should be used for gender transition surgeries,” Lauren Horsch, spokesperson for the Senate’s highest-ranking lawmaker, Sen. Phil Berger, wrote in an email to The Assembly.

Another law, House Bill 805, took effect earlier this month. It extends the statute of limitations for medical malpractice for injuries arising from transition procedures to 10 years and requires public record-keepers to preserve original birth certificates when someone changes their gender. 

The bill also bans inmates in state prisons from receiving gender-affirming care. North Carolina Department of Adult Correction spokesman Keith Acree said that while it has treated inmates to address their gender dysphoria, it’s never provided surgical procedures. 

Sixteen state attorneys general are suing Trump over his efforts to end the care for minors; North Carolina Attorney General Jeff Jackson, a Democrat, isn’t among them. A spokesperson for Jackson didn’t respond to a request for comment.

Though state Democrats have grown quieter in their support of gender-affirming care, they haven’t moved to restrict it, either. House Bills 805 and 808 both passed almost entirely along party lines. 

‘This Is Not Personal’

When Jane started hormone therapy in 2023, she said she finally started to feel comfortable in her own skin. “It was easier to look at myself,” she said. 

Now, she anticipates paying for those treatments out of pocket, which she estimates will cost about $100 a month once she runs out of her current supply. 

Those who have undergone surgical transition still rely on hormone replacement therapy to stabilize their endocrine systems. They can suffer complications from losing access to it, such as osteoporosis, cardiovascular issues, and menopause-like symptoms. Jane is especially worried for trans men, who face difficulty securing testosterone. Given its misuse in bodybuilding and sports, it is prescribed under stricter conditions compared with estrogen. 

Since being denied care, Jane said she had to start taking antidepressants. 

She’s gone down a “bad mental spiral” and has days she can’t get out of bed. Before, Jane said she always received excellent reviews at her university job, but lately she has felt defeated.

“To feel proud of your work ethic, and feel proud about your job, and then have the state treasurer basically say, ‘Nah, you don’t deserve the care you need,’” she said, “it’s really hurtful and evil and painful.”

The state has asserted that excluding the care is rooted in fiduciary responsibility and independence, not discrimination. In a 2022 deposition, former State Health Plan executive director Dee Jones argued that the plan can’t cover all treatments, even if they are medically necessary. 

“I have to turn down parents who want a special feeding benefit for their infant children who can’t process food normally. I have to turn down hearing aids,” she said. “I have to serve a whole entire population with a very finite amount of money.”

Jones said it breaks her heart to decline benefits. “This is not personal,” she said. “This is all about money, very simply put.”

She conceded the cost of gender-affirming care was small in comparison to the plan’s overall expenditures. 

“I’ll totally admit that the cost of this benefit is not going to break the plan. Never was, never will,” she said. “But I can’t do it for that group and not do it for the group that wants it for their infants.”