On August 23, 2016, a Catholic hospital system, Catholic medical group, Christian medical association, and five states filed a lawsuit challenging the Department of Health and Human Services’ (HHS) regulations implementing section 1557, the nondiscrimination provision of the Affordable Care Act (ACA).

The complaint runs to 79 pages and pleads 20 causes of action (legal claims). It alleges that the regulation violates the federal Administrative Procedures Act; constitutional and statutory provisions protecting religious liberty, freedom of expression and association, due process, and equal protection; and the rights of the plaintiff states guaranteed by Constitution’s spending clause and Tenth Amendment

Section 1557 applies various antidiscrimination laws to entities receiving assistance under the ACA. These antidiscrimination provisions include Title IX of the Education Amendments of 1972, which prohibits discrimination based on sex. In accordance with judicial cases interpreting sex discrimination law, the HHS regulations prohibit discrimination based on sexual stereotyping, including discrimination based on gender identity.

The Complaint

The complaint alleges that the section 1557 regulations force the plaintiff professionals and facilities to provide gender transition services against their medical judgment and religious beliefs. It also asserts that the regulations prohibit discrimination on the basis of “termination of pregnancy” and fail to provide an exclusion for abortions, thus requiring coverage of abortions. The states allege that the regulation requires them to cover gender transition services and interferes with their “zealous” protection of the physician-patient relationship.

What The Section 1557 Rules Say About Abortion

The decision of HHS to interpret section 1557 to cover gender identity and gender transition services has been controversial, although supported by precedent. But it is on the whole difficult to square the complaint with the actual language of the 1557 rule. Although the rule prohibits discrimination against women who have had an abortion, nothing in the 1557 rule requires the provision or coverage of abortions, and indeed the preface explicitly states that:

nothing in Section 1557 displaces the ACA provisions regarding abortion, including but not limited to the provision that no qualified health plan offered through a Marketplace may discriminate against an individual health care provider or health care facility because of its unwillingness to provide, pay for, provide coverage of, or refer for abortions; provisions that state that nothing in the ACA shall be construed to require a qualified health plan to provide coverage of abortion as an essential health benefit; and the provision permitting States to prohibit abortion coverage in qualified health plans and restricting the use of Federal funding for abortion services.

What The Rules Say About Services For Transgender Individuals

The rule does prohibit entities providing health insurance or other coverage from denying or limiting coverage to transgender individuals based on the fact that the individual’s sex assigned at birth or otherwise is different from the one to which such health services are ordinarily provided. It prohibits health insurance or other coverage from categorically excluding gender transition services or otherwise denying or limiting coverage of gender transition services if the restriction results in discrimination.

The preface provides that coverage can be restricted to medically necessary services but coverage for elective gender transition services cannot be discriminatorily excluded if coverage for other elective services is offered. The regulation permits limitations and exclusions of gender transition services supported by neutral, nondiscriminatory reasons. It does not override medical judgment or require professionals to provide unnecessary services.

Finally, the section 1557 regulation explicitly provides:

Insofar as the application of any requirement under this part would violate applicable Federal statutory protections for religious freedom and conscience, such application shall not be required.

It does not purport to require providers or professionals to provide services against their religious beliefs that they would could not otherwise be required to provide. The regulation, in short, offers the protection that the plaintiffs are suing to claim.

An Apparent Strategic Decision On Where To File Suit

The organizational plaintiffs are based in Illinois and Indiana. Five states from across the country are also plaintiffs. Texas is one of these, but it is likely not a pure coincidence that the case was filed in the tiny federal court in Wichita Falls, Texas, served by a single federal judge. That judge, Reed O’Connor, entered a nationwide preliminary injunction on August 21 prohibiting the federal government from taking action against schools that do not comply with its policy on transgender bathroom access.

A month ago he ruled against the government on another case brought by Texas challenging a Medicaid provision promulgated under the ACA. Apparently the plaintiffs are assuming that he will be favorably disposed to their claims here as well.