What Coloradans Need to Know About the Division of Insurance Recent Bulletin on Health Insurance

In an important victory for the health of all Coloradans, the Colorado Division of Insurance released a bulletin on March 19, 2013, stating that discrimination in health coverage based on sexual orientation — defined as heterosexuality, homosexuality, bisexuality or transgender status — is prohibited in Colorado.

The announcement of this bulletin (B-4.49) means that in order to comply with current Colorado statutes prohibiting discrimination based on sexual orientation and transgender status, health insurance plans sold in Colorado can no longer: 1) impose higher rates or charge more because of an applicant’s sexual orientation (see definition below); 2) use an individual’s sexual orientation as a pre-existing condition for the purpose of limiting or denying coverage; or 3) deny, exclude or limit coverage for medically necessary services as determined by an individual’s medical provider, if the same item or service would be provided — based on current standards of care — to another individual without regard to their sexual orientation.

Defining “Sexual Orientation”
Colorado’s law defines sexual orientation as a “person’s orientation toward heterosexuality, homosexuality, bisexuality or transgender status or another person’s perception thereof.” This means Colorado’s law prohibits discrimination by health insurers based on sexual orientation and includes protections for lesbian, gay, bisexual and transgender Coloradans.

What Is the Colorado Division of Insurance and What Is its Authority?
Colorado’s Division of Insurance (DOI) oversees the health insurance regulations in the state of Colorado. Bulletins express the state’s interpretation of existing law or general statements of policy, and insurers conform to guidance issued by state agencies empowered to regulate them. If your insurance is provided by your employer, please note that many larger businesses are based out-of-state and are governed by federal laws, like ERISA, that preempt state-level nondiscrimination protections. These businesses likely buy their insurance in another state and will be unaffected by this bulletin. Businesses that are self-insured may also be exempt from this bulletin. For more information on advocating for trans-inclusive health care in your workplace, download our partner Basic Rights Oregon‘s one-of-a-kind toolkit.

Why Is this Decision Needed?
Because health care needs should be determined by patients and their medical providers. However, insurance companies routinely exclude insurance coverage for services that transgender people need based on their transgender status, or specifically exclude transgender-related services. Nearly all insurance plans have categorically excluded coverage for transgender-related medical treatment, even when that treatment (such as mental health care or hormone replacement therapy) is covered for non-transgender people.

What Type of Exclusions for Transgender Coloradans Currently in Health Insurance Policies Does the Bulletin Impact?

  • Health insurers cannot deny coverage of treatments for transgender policyholders if the same treatments are covered for other policyholders. If an insurer covers breast reduction surgery to lessen back pain, for example, that insurer could not deny breast reduction surgery for gender transition if the provider deemed the treatment medically necessary. If hormone therapy is covered for other policyholders, it cannot be denied for gender transition if determined to be medically necessary. On the other hand, an insurer could exclude all coverage of breast implants or penile implants. In short, Colorado law requires equality in treatment.
  • Health insurers may not have riders that categorically exclude all transgender patients.
  • Insurers cannot rate or charge more for individuals based on their sexual orientation or transgender status.
  • Insurers cannot classify as a pre-existing condition an individual’s sexual orientation or transgender status to limit or deny coverage.

Is this Necessary Medical Care?
Our nation’s most reputable medical bodies have identified transgender health care as being medically necessary. In 2008, the American Medical Association passed a resolution supporting public and private health insurance coverage for treatment of gender identity disorder as well as opposing the “exclusions of coverage for treatment of gender identity disorder when prescribed by a physician.” That same year, the American Psychological Association passed a resolution stating that the organization “opposes all public and private discrimination on the basis of actual or perceived gender identity and expression and urges the repeal of discriminatory laws and policies.” And in 2012, the American Psychiatric Association affirmed that the organization “urges the repeal of laws and policies that discriminate against transgender and gender variant individuals” and “opposes all public and private discrimination against transgender and gender variant individuals in such areas as health care, employment, housing, public accommodation, education, and licensing.” In its own membership guidelines, the Colorado Medical Society prohibits discrimination based on sexual orientation.

Will this Raise Insurance Rates?
Past experience offers helpful information. In 2010, Multnomah County, Oregon, removed exclusions from their employee health plan, and in 2011, the City of Portland followed suit. Both municipalities have seen no significant cost impact to their health plans; for example, the City of Portland estimated the premium impact to be .08%. Additionally, the City and County of San Francisco removed exclusions from their employee benefits plan in 2001 and have not seen any discernible increase in health care costs.

How Will this Affect Medicaid?
This bulletin applies only to private health insurance regulated by the Colorado Division of Insurance, not the Medicaid program. Medicaid is a public coverage program administered in partnership between the state of Colorado and the federal government and is managed by the Colorado Department of Health Care Policy and Financing at the state level. However, state and federal law pertaining to Medicaid include similar prohibitions for discrimination based on sexual orientation, which includes transgender status. Currently, Colorado’s Medicaid program covers low-income children, people with disabilities, pregnant women and a subset of low-income adults without dependent children. With the Affordable Care Act, as of January 2014 states have the option to expand the Medicaid program to the majority of low-income Coloradans. Colorado is moving forward to pass legislation which will allow our state to expand the Medicaid program. Learn more about the expansion here.

How Will this Affect Medicare?
Because Medicare is a federally funded program, this bulletin does not apply. However federal law does apply to Medicare and includes similar protections. One Colorado and transgender community leaders will continue working together to increase access to medically necessary care for all Coloradans.

How Does this Bulletin Impact Health Care Reform?
This bulletin does not impact implementation of health care reform. However, health reform has similar protections in the programs it regulates — including prohibition of discrimination based on sexual orientation and transgender status. Under the Affordable Care Act, each state is defining its essential health benefits plan, which requires that insurance plans in the individual and small group markets cover ten essential health benefits starting in January 2014. This decision means that insurance companies participating in Colorado’s Health Exchange will need to comply with the bulletin. These essential health benefits must be provided to all Coloradans regardless of sexual orientation.

Who Else Is Providing Coverage for Transgender Coloradans and Why?
Currently, 25% of Fortune 100 Companies and many Colorado businesses, both large and small, choose to offer riders with their insurance plans for coverage of care needed by their transgender employees. Without these riders their plans would include exclusions that can broadly limit or exclude medically needed health care for their transgender employees. These businesses believe that providing all employees with the care they need to be healthy and productive is not just good for employees and their families, but that it’s also good for business.

What Should I Do if I Think an Insurer Has Unfairly Denied My Health Insurance Claim?
You must first file follow the appeal process through your insurance provider, after which you may appeal for an impartial external review through the Colorado Division of Insurance. Refer to this Colorado Division of Insurance Bulletin (B-4.49) in your appeal to your insurer if you believe your claim was denied based on sexual orientation or transgender status. If the insurer denies your claim after your internal appeal, you may file a complaint with Colorado’s Division of Insurance at 303-894-7490, by email at insurance@dora.state.co.us, or by filling out an online assistance request form on DOI’s website.

If you believe you are being discriminated against based on your sexual orientation or transgender status in your employment, in housing, or by an entity that serves the public (including insurance coverage), you can also file a complaint with the Colorado Civil Rights Division.