The Iowa Supreme Court heard arguments Wednesday in a case involving the state’s ability to deny Medicaid funding for transgender surgery. A Polk County judge has ruled that a state law denying coverage violates the Iowa Constitution and the Iowa Civil Rights Act. The case was filed on behalf of Aiden Vasquez, shown here, and Mika Covington. (Photo courtesy of the ACLU of Iowa)
The Iowa Supreme Court heard arguments Wednesday in a case involving the state’s ability to deny Medicaid funding for transgender surgery.
Wednesday’s hearing stems from the state’s appeal of a 2021 district court ruling that found legislation amending the Iowa Civil Rights Act violated the Iowa Constitution. That legislation had attempted to strip away protections for transgender Iowans who rely on Medicaid for transition surgery and related procedures.
The district court had also ruled that an Iowa Medicaid rule or regulation blocking Medicaid coverage for medically necessary transgender care violated both the Iowa Constitution and the Iowa Civil Rights Act.
The state appealed the ruling that deals with the Iowa Legislature’s amendment to the Iowa Civil Rights Act, arguing that the state’s elected lawmakers have the right to redefine the language of the act or even repeal it in its entirety.
Despite its appeal, the state has abided by the 2021 ruling and stopped denying pre-authorization for trans-related medical procedures. The two plaintiffs in the case now before the Iowa Supreme Court, Mika Covington and Aiden Vasquez, have had their procedures approved for payment – and that caused the justices on Wednesday to question why the case was before them.
The lawyer for the state, Thomas J. Ogden, was barely one minute into his presentation defining the scope of the case when he was interrupted by Justice Edward M. Mansfield, who indicated he wanted to “cut to the chase” in the matter.
“Other than (the issue of) attorneys’ fees, why isn’t it moot if the state is now agreeing that it’s going to pay for the gender-affirming surgeries?” Mansfield asked.
Justice Thomas D. Waterman appeared to share the same concern.
“Right now,” Waterman said, “there are two petitioners for whom the state has agreed to fund the cost of the surgeries they want. Isn’t it game over on the state’s appeal?”
“Well, no, I don’t think so,” Ogden said. “The state is defending the constitutionality of the statute passed by the Legislature, which the district court declared unconstitutional.”
“What happens to the next people that request gender-affirming surgery?” Waterman asked.
“The department, obviously, is going to abide by the decision of the district court,” Ogden said. “So the rule that the district court declared unconstitutional – you know, we intend to abide by that ruling.”
“Doesn’t that kind of put us in a pickle?” Chief Justice Susan Christensen asked. “You’re saying, ‘Hey, by the way, we’re going to pay for it, but we want you to tell us (that) we don’t have to pay for it.’ Aren’t you asking us to do the heavy lifting? … How much weight should we give the fact that you guys said, ‘Uncle’? You said, ‘We’re going to pay for it.’”
Ogden said the state is focused not on the rule that speaks to Medicaid payments for the medical procedures but on the ability of state lawmakers to change and redefine the Iowa Civil Rights Act as they see fit.
“Our purpose in coming here today is to argue that the statute that the Legislature passed is constitutional,” he told the justices. “And, you know, I think, that we, you know, would maintain that position in the future.”
Ogden said the district court also lacked the authority to declare the Iowa Civil Rights Act amendment unconstitutional because the state’s decision on Medicaid payment was based not on the amended act but on the Medicaid rule or regulation.
State asked about rule remaining in place
Chief Justice Christensen questioned why the state’s lawyers provided no evidence at all to challenge the plaintiffs’ argument that their sought-after medical procedures were medically necessary.
“Can you help me understand the lack of any evidence whatsoever put on by the state regarding the position of the plaintiffs that the surgery is medically necessary?” Christensen asked. “Help me understand. The record is not just slim – it’s, like, bare.”
“I’m not sure I can answer that question,” Ogden said. “I don’t know that the position of the state has ever been that these individuals’ health care providers, you know, are wrong about their, you know, medical judgment.”
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Two of the justices noted that while the district court has said the Medicaid rule is unconstitutional, and while the state has said it will be abide by that finding, the rule remains in place.
“Is it going to be another four-year wait before that rule is replaced?” Justice Waterman asked.
“I don’t know about that specifically,” Ogden said. “I think that, you know, the (Iowa Department of Health and Human Services) is going to look at that and, you know, assess their options.”
Ogden told the justices that the petitioners in the case have repeatedly, and wrongly, treated the Iowa Legislature’s amendment to the Iowa Civil Rights Act as a “prohibition on government funding” for gender-reassignment procedures when the amendment merely states that act does not require to the state to pay for such procedures.
“(Legislators) are entitled to do that,” Ogden said. “I mean, they’re the ones who get to decide what the scope of the Iowa Civil Rights Act is.”
Justices ask about legislative powers
The lawyer for the plaintiffs, Seth Horvath, told the justices that the problem with the state’s position on the Legislature’s amendment to the act is that it “neglects to account for the continuing existence” of the Medicaid-payment rule, or regulation, that the lower court has also found to be unconstitutional. The Iowa Civil Rights Act amendment passed by the Legislature and the Medicaid rule have to be read in conjunction with each other, he said.
“The regulation is still on the books, so to speak,” he said.
Asked by Justice Christopher McDonald whether he agreed with the state’s assertion that Iowa doesn’t even need to have a civil rights act, Horvath said, “I agree with it to a certain extent, your honor.”
“So why can’t the state, if they have the authority to abolish or repeal the entire act, why can’t they define the scope of its application?” McDonald asked.
“There is an Iowa Civil Rights Act now, and it was amended to extend certain protections,” Horvath replied. “Those protections are in place, and the state has now enacted a law that would retract those protections as to a particular targeted group.”
“Can the Iowa Legislature repeal a protected class in the Iowa Civil Rights Act?” McDonald asked.
“If it were to solely target one single class, for reasons that were targeting that class, that would be problematic,” Horvath said, citing past U.S. Supreme Court rulings that deal with disadvantaged classes of people being “targeted” by state legislatures.
He noted that in the case at hand, the Iowa Legislature didn’t impose broad restrictions on Medicaid funding as a cost-saving measure but instead “decided to target a particular type of procedure that’s one needed only by transgender people.”
Arguments follow six years of litigation
The issue now before the court has its origin in a 2016 complaint filed by the ACLU of Iowa on behalf of an Iowa Department of Corrections worker, Jesse Vroegh, who had been denied health care coverage for treatment and procedures his doctors said were medically necessary.
A year later, the ACLU of Iowa filed a lawsuit on behalf of transgender clients Carol Ann Beal and Eerie Anna Good to block an Iowa Medicaid ban on the coverage of medically necessary gender-affirming surgery.
In 2018, a Polk County District Court judge ruled in favor of Beal and Good and blocked enforcement of the Medicaid ban under the Iowa Constitution’s equal protection guarantee and the Iowa Civil Rights Act. The state appealed that ruling.
In 2019, a Polk County District Court jury ruled in favor of Vroegh in his case, awarding him $120,000 in damages and finding that the state had engaged in sex and gender identity discrimination as prohibited by the Iowa Civil Rights Act.
Three months later, the Iowa Legislature passed a bill amending the Iowa Civil Rights Act to state that government agencies were not required to use public money, including Medicaid, to pay for transition-related surgeries. After the law’s passage, Iowa Medicaid again started denying payment for such procedures.
In April 2021, the state denied Medicaid coverage to Mika Covington and Aiden Vasquez. The ACLU sued teh state again, alleging discrimination.
In November 2021, a district court judge in the Covington-Vasquez case ordered the state to stop denying Medicaid coverage of medically necessary, gender-affirming surgery for transgender Iowans. The state has abided by that order, while appealing to the Iowa Supreme Court the district court judge’s finding that the 2019 law amending the Iowa Civil Rights Act was unconstitutional.
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