Wednesday, May 31, 2023

Treasurer Folwell Welcomes Support from Twenty-One States in Sex Transition Lawsuit

N.C. Attorney General Stein Refused to Represent the State Treasurer’s Office in Court Case
Raleigh, NC
May 31, 2023

State Treasurer Dale R. Folwell, CPA, welcomed a court filing from 21 states in support of the authority of North Carolina officials to determine which benefits will be covered by the State Health Plan. The filing, submitted by the attorneys general for each state, contends that certain gender transition procedures “are at best experimental and at worst deeply harmful.” The states submitted an amicus brief to the U.S. Court of Appeals for the Fourth Circuit in the Kadel v. Folwell lawsuit.

Treasurer Folwell and the State Health Plan, a division of the Department of State Treasurer, were sued in 2019 because a temporary benefit to pay for surgical and hormonal treatments related to gender dysphoria had expired. Treasurer Folwell sought legal representation from the N.C. Department of Justice after the lawsuit was filed, but Attorney General Josh Stein refused his request.

Last June, U.S. District Court Judge Loretta Biggs issued an order in favor of the plaintiffs saying the decades-old benefits exclusion, which had been in place under every state treasurer since the 1990s, was discriminatory. That ruling is now on appeal awaiting a September hearing before the full federal Court of Appeals for the Fourth Circuit. 

In his appeal, Treasurer Folwell argues that the ruling by Judge Biggs deprived the State Health Plan of a jury trial and substituted judicial decision making for the Plan’s Board of Trustees’ authority to determine coverage and benefits. 

“Our main priority is to provide coverage that does the most good for the highest number of people with the finite resources we have available,” Treasurer Folwell said. “Plan trustees are responsible for maintaining and preserving the financial stability of the State Health Plan. We cannot be everything for everyone. The 21 states support the position that health benefits should be determined by those closest to the situation, and they point out the current disagreement about the effectiveness of these medical treatments.”

The States of Alabama, Alaska, Arkansas, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, Texas, Utah and Virginia filed the brief with the U.S. Court of Appeals for the Fourth Circuit.

“The purported benefits of chemical and surgical interventions are hypothetical,” the attorneys general wrote on May 25. “Unfortunately, the side effects are not. They are both known and severe. Premature mortality. Sterilization. Interference with brain development. Loss of bone density. Hypertension. Shockingly high suicide rates after chemical or surgical intervention.”

“Gender dysphoria is a serious condition, and all individuals struggling with it deserve compassionate, evidence-based care. Disregarding the science and the harms is not compassionate,” the brief stated.

In addition to the North Carolina case, the 21 states filed an amicus brief on behalf of the state of West Virginia. A federal District Court in that state said West Virginia’s Medicaid program could not deny coverage for surgery to treat gender dysphoria.

Under the federal court order that is on appeal in North Carolina, the State Health Plan has expended about $356,000 during the first four months of 2023 on treatments for approximately 270 individuals. The State Health Plan is on track to exceed $1 million in expenditures for the year of 2023. These figures do not account for all amounts paid in pharmaceutical claims.

The State Health Plan, a division of the Department of State Treasurer, provides health care coverage to nearly 740,000 teachers, state employees, retirees, current and former lawmakers, state university and community college personnel, and their dependents.