Dive Brief:

• A Massachusetts federal judge last week vacated a Trump administration policy barring individual and small-group plans on the Affordable Care Act exchanges from covering gender-affirming care for transgender individuals as an essential health benefit.
•   U.S. District Judge Nathaniel Gorton said HHS unlawfully revised the scope of essential health benefits without submitting a congressionally required report containing a certification from the CMS chief actuary. Still, Gorton upheld four other marketplace provisions challenged by the states.
• California Attorney General Rob Bonta, who co-led the lawsuit from 21 states, called the Friday ruling a major victory, given it returns gender-affirming care under the ACA’s financial protections in states that allow it. However, the decision does not require every insurer to cover gender-affirming care or resolve how current benefits should be administered.

Dive Insight:

For patients, the essential health benefit label is more than just insurance jargon. The ACA requires non-grandfathered individual and small-group plans to cover 10 categories of care, to ensure they’re offering comprehensive coverage. Spending on those benefits is subject to the law's annual out-of-pocket cap, and the benefits cannot carry annual or lifetime dollar limits.

Under the policy finalized last year by the Trump administration, insurers could still voluntarily cover gender-affirming care as a non-essential health benefit, and states could mandate coverage. But patient spending on the services would not have been required to count toward a deductible or out-of-pocket maximum, and the care would not have been protected from lifetime dollar limits — a distinction that could lead to substantially higher bills.

A person receiving recurring prescriptions, laboratory monitoring or follow-up care could continue paying for services even after reaching the plan's ordinary out-of-pocket ceiling, depending on how the claims are classified. Higher costs can interrupt treatment or push patients to delay care.

The ruling keeps financial protections for gender-affirming care in place, but doesn’t address whether federal or state regulators will direct insurers to revise benefit documents, recalculate cost sharing or revisit claims processed under the now-vacated policy.

Plans will need guidance from CMS and states on how to proceed with coverage changes or adjustments, according to AHIP, the insurance industry’s largest trade group.

The HHS did not respond to questions about whether the administration plans to appeal or seek a stay, or how issuers and states should administer existing plans while the ruling remains in effect.

It’s a setback for the Trump administration, which has pushed to restrict access to gender-affirming care. Days before the ruling, the CMS finalized a separate policy ending federal Medicaid and Children's Health Insurance Program funding for some gender-affirming services for minors beginning Oct. 13. States can continue paying for the services with their own funds.

Gorton's decision was otherwise a win for the HHS. The judge upheld provisions governing the ACA's open enrollment period, the failure-to-reconcile policy for advance premium tax credits, the premium adjustment methodology and wider allowable ranges around plans' actuarial values that were finalized in the controversial policy last year.

Some of the provisions of the marketplace rule have been vacated in a separate federal case.