Published September 8, 2022
In accord with the Biden administration’s “health equity” and gender identity policy priorities, the Department of Health and Human Services (HHS) proposed new nondiscrimination regulations under Section 1557 of the Patient Protection and Affordable Care Act (ACA) and other insurance laws enforced by HHS’s Centers for Medicare & Medicaid Services (CMS).
The 97-page notice of proposed rulemaking (NPRM) was published in the federal register on August 4, 2022, and public comments are due Monday, October 3, 2022.
Section 1557 Regulations
HHS explains the NPRM is necessary “to better align the Section 1557 regulation with the statutory text . . . , to reflect recent developments in civil rights case law, to address unnecessary confusion in compliance and enforcement resulting from the 2020 Rule, and to better address issues of discrimination that contribute to negative health interactions and outcomes.” It describes Section 1557 as “one of the government’s most powerful tools to ensure access to and coverage of health care in a nondiscriminatory manner.”
Section 1557 guarantees that no individual can be denied benefits in a federally run or federally funded health program or activity based “on the ground prohibited under” four existing federal civil rights laws: Title VI of the Civil Rights Act of 1964 (race, color, national origin), Title IX of the Education Amendments of 1972 (sex), the Age Discrimination Act of 1975 (age), and Section 504 of the Rehabilitation Act of 1973 (disability). (See here for a summary of 2016 and 2020 Section 1557 regulations and lawsuits under the Obama and Trump administrations.)
Under currently proposed Title IX regulations by the Biden Department of Education, discrimination “on the basis of sex” in federally funded education programs and activities would be defined and expanded to include discrimination based on “sex stereotypes, sex characteristics, pregnancy or related conditions, sexual orientation, and gender identity.” (Public comments on the proposed Title IX regulations are due September 12, 2022.)
The proposed definition under Title IX is mirrored in HHS’s proposed definition of sex discrimination under Section 1557: “Discrimination on the basis of sex includes, but is not limited to, discrimination on the basis of sex stereotypes; sex characteristics, including intersex traits; pregnancy or related conditions; sexual orientation; and gender identity.”
In support of its proposal, HHS cites to the Supreme Court’s 2020 Bostock v. Clayton County decision, several federal court decisions that favor its position, and various “notices of interpretation” and “guidance” documents by HHS (and the Department of Justice).
HHS alleges that Bostock held Title VII’s prohibition against sex discrimination in employment prohibits “discrimination on the basis of sexual orientation and gender identity” (even though Bostock used the term “transgender status” and did not adopt gender identity as a protected basis). According to HHS, because Title VII’s and Title IX’s prohibitions against sex discrimination are similar, the Bostock Court’s reasoning “applies to Title IX and, by extension, to Section 1557.” Thus, Section 1557 also prohibits discrimination based on “sexual orientation and gender identity.”
The proposed regulations require “equal access to the covered entity’s health programs or activities” and prohibit “the denial or limitation of health services, including those that are offered exclusively to individuals of one sex, to an individual based on the individual’s sex assigned at birth, gender identity, or gender otherwise recorded.”
If the proposed regulations are adopted, doctors and hospitals will be required to provide gender transition services, including for children, if they provide the same services for non-transition related purposes. While it is permissible under the proposed regulations for a health care professional to refuse to provide gender transition services to a particular patient based on medical judgment, “a provider’s view that no gender transition or other gender-affirming care can ever be beneficial for such individuals (or its compliance with a state or local law that reflects a similar judgment) is not a sufficient basis for a judgment that a health service is not clinically appropriate.” Many health care professionals view gender transitions as controversial, harmful, and irreversible, and contrary to their conscience and best medical judgment.
The proposed Section 1557 regulations would apply to “every health program and activity, any part of which receives Federal financial assistance, directly or indirectly, from [HHS]” and every health program and activity administered by HHS or a Title I entity. The 2020 Section 1557 regulations did not apply to health insurance issuers, reasoning that an entity that provides health insurance is not one “principally engaged in the business of providing health care.” The NPRM proposes dropping this limitation so that health insurance issuers are subject to 1557 by virtue of receiving federal financial assistance and providing health insurance. Section 1557 would apply to “all of an issuer’s health programs and activities when an issuer is principally engaged in providing or administering health insurance coverage, or other health-related coverage.”
The NPRM explains a covered entity would be prohibited from “having or implementing a categorical coverage exclusion or limitation for all health services related to gender transition or other gender-affirming care.” An exclusion on the basis that such interventions are “experimental” would be considered discriminatory. While all services related to gender transitions would not have to be covered, insurers may not limit or deny services based on gender identity, and to the extent a service is covered for non-transition related purposes, it would have to be covered for gender transitions.
CMS Insurance Regulations
In January 2022, CMS proposed the “2023 Payment Notice rule” that would have added, among other changes, “sexual orientation and gender identity” nondiscrimination provisions to several federal insurance regulations. When the rule was finalized in Spring 2022, it did not include the proposed sexual orientation and gender identity nondiscrimination provisions. This surprising development was apparently the result of coordinated opposition efforts via submission of public comments and CMS’s need to quickly issue a final rule in time for the 2023 plan year
CMS explained that because the then-impending Section 1557 NPRM would address issues related to sex discrimination, “HHS is of the view that it would be most prudent to address the nondiscrimination proposals related to sexual orientation and gender identity in the [CMS] proposed rule at a later time, to ensure that they are consistent with the policies and requirements that will be included in the section 1557 rulemaking.”
Like CMS’s January proposal, the proposed changes would require all insurers of individual market, small group plans, and large group plans across the country to cover gender transition services.
The NPRM also proposes prohibiting discrimination based on sexual orientation or gender identity in Medicaid and CHIP (Children’s Health Insurance Program) fee-for-service programs and managed care programs, as well as PACE (Programs of All-Inclusive Care for the Elderly).
The NPRM further proposes defining “Federal financial assistance” to include “grants, loans, and other types of assistance from the Federal Government” and Medicare Part B, even though historically Medicare Part B has been excluded from the definition of federal financial assistance.
Abortion & Conscience and Religious Freedom Protections
Although Title IX contains an abortion neutrality provision and a religious exemption, the NPRM does not import them into the proposed Section 1557 regulations. HHS explains that it is interpreting the “ground prohibited under” Title IX to mean merely “sex” rather than the scope of sex discrimination prohibited by Title IX.
Regarding abortion, HHS’s press release on the NPRM stated the proposed rule “reiterates protections from discrimination for seeking reproductive health care services.” The NPRM defines sex discrimination to include “termination of pregnancy” and seeks comment on “what impact, if any, the Supreme Court decision in Dobbs v. Jackson Women’s Health Organization has on the implementation of Section 1557 and these regulations,” indicating HHS is seeking ways to promote the Biden administration’s pro-abortion agenda.
Regarding religion, the NPRM states that HHS is “fully committed to respecting conscience and religious freedom laws when applying this rule, including an organization’s assertion that the provisions of this rule conflict with their rights under Federal conscience and religious freedom laws.” As such, the NPRM proposes a process for application of such laws. Proposed regulations would provide a specific means for recipients to notify HHS of their views regarding the application of federal conscience or religious freedom laws. HHS would be required to “promptly consider those views,” pause any agency investigation or enforcement activity during consideration, and make a “case-by-case” determination about any applicable legal protections. HHS notes that a “case-by-case approach to such determinations . . . will allow it to account for any harm an exemption could have on third parties.”
This process is seen by many as a sham since HHS under Secretary Xavier Becerra has systematically targeted or ignored conscience and religious freedom protections, such as by sidelining HHS’s Conscience and Religious Freedom Division, abandoning the case of a nurse illegally forced to participate in abortion, rescinding protections for faith-based adopted and foster care agencies in three states, and proposing to rescind conscience protection regulations. Indeed, HHS refused in federal court to “disavow enforcement” of Section 1557 to require medical professionals to perform gender transition surgeries or abortions in violation of their sincerely held religious beliefs.
Purported Preemption of State Laws
The NPRM contemplates its proposed regulations will preempt conflicting state laws. Conflicts could include state laws protecting minors from sterilizing and irreversible gender transition interventions or state conscience and religious freedom protection laws. It is unclear how strings attached to federal financial assistance could unilaterally preempt incompatible state laws, instead of the standard disallowance of federal funds from entities that are unable to comply—either by oversight, choice, or due to a state law.
Other Proposed Requirements
Under the NPRM, proposed regulations would also require:
- Designation of a Section 1557 Coordinator by entities with 15 or more employees to ensure compliance with Section 1557;
- Development and implementation of written policies and procedures to comply with Section 1557 regulations, document retention, staff trainings, and notice of nondiscrimination;
- Nondiscrimination on the basis of sex with respect to an individual’s marital, parental, or family status;
- Nondiscrimination against an individual on the basis of the race, color, national origin, sex, age, or disability of an individual with whom the individual is known to have a relationship or association;
- Nondiscrimination in clinical algorithms used in decision-making and in the delivery of health programs and activities through telehealth services; and
- Notices of the availability of language assistance services and auxiliary aid and services for health programs and activities (known as the “tagline” requirement in the 2016 regulations).
Opportunity for Public Comment
HHS is accepting public comments on the NPRM until Monday, October 3, which can be submitted here. To learn more about public comments on agency rulemaking, see the Ethics and Public Policy Center’s one-page explainer.
Rachel N. Morrison is a Fellow at the Ethics and Public Policy Center, where she works on EPPC’s HHS Accountability Project. An attorney, her legal and policy work focuses on religious liberty, health care rights of conscience, the right to life, nondiscrimination, and civil rights.