How Public, Private Payers Cover Care for the LGBTQ+ Population

November 02, 2023 - In a country with rampant health disparities, health insurance coverage can be the difference between accessing necessary services and going without care. How health plans cover care for socially disadvantaged and vulnerable populations can significantly impact health outcomes.

Members of the LGBTQ+ community often face barriers to care, such as discrimination from healthcare providers, a lack of culturally competent services, and minimal or nonexistent coverage for certain services.

Below, HealthPayerIntelligence will explore the current state of coverage for the LGBTQ+ community.

Access to care & coverage

Outside factors, like socioeconomic status, can contribute to care disparities. LGBTQ+ people are more likely to have lower incomes compared to those not part of the LGBTQ+ community. According to a KFF issue brief, 44 percent of LGBTQ+ people earned less than 200 percent of the federal poverty level in 2022, which was $13,590 per year for an individual.

In addition, 25 percent of LGBTQ+ people reported having fair or poor health and 50 percent reported an ongoing health condition requiring regular monitoring, medical care, or medication.

Nearly 60 percent of surveyed LGBTQ+ individuals had private insurance, 21 percent had Medicaid coverage, 8 percent were covered by Medicare or other government insurance, and 13 percent were uninsured.

Most LGBTQ+ people (93 percent) reported seeing a doctor in the last two years, but those without insurance were less likely (80 percent).

A separate KFF brief shared that LGBTQ+ people (67 percent) are more likely to need mental healthcare services compared to non-LGBTQ+ people (39 percent). Only around half (55 percent) of LGBTQ+ people who reported needing mental health services received care. Ten percent of those who needed care and tried to access it were unsuccessful.

Among LGBTQ+ individuals with private insurance who received mental healthcare, 27 percent said their provider did not accept their health insurance.

Adequate coverage can facilitate access to mental and physical care for members of the LGBTQ+ community. However, private and public payers differ in how they cover this care.

Medicaid

Given that LGBTQ+ individuals are more likely to have low incomes, Medicaid is a vital source of coverage for this population. Around 1.2 million LGBTQ+ adults were covered by Medicaid, a 2022 MACPAC brief indicated. Almost 13 percent of those adults identify as transgender.

MACPAC reaffirmed KFF’s findings that lesbian, gay, and bisexual populations on Medicaid had a greater likelihood of having a mental illness and not receiving treatment compared to heterosexual adults. This was also true for substance use disorders and related treatment.

Transgender and gender-diverse Medicaid beneficiaries reported similar access to providers for routine and most gender-affirming care as people with private health plans. However, Medicaid beneficiaries were more likely not to be able to find in-network providers for gender-affirming surgery.

Medicaid coverage of gender-affirming care varies by state. States must cover certain mandatory benefits under their Medicaid programs, such as inpatient and outpatient hospital services, physician services, home healthcare, and family planning services.

There are no federal policies that require or exclude gender-affirming healthcare services from Medicaid benefits, but comparability rules state that the amount, duration, and scope of services must be equal for all beneficiaries within an eligibility group.

Although Medicaid benefits are subject to the Affordable Care Act’s (ACA) non-discrimination provisions, states have implemented policies that aim to limit access to gender-affirming care. Gender-affirming and transgender-related care can include hormone therapy, surgeries, fertility assistance, voice and communication therapy, primary care, and behavioral health interventions.

According to the Movement Advancement Project, as of August 2023, 26 states and Washington, DC, have Medicaid policies that explicitly cover transgender-related healthcare. The majority of the LGBTQ+ population (60 percent) lives in one of these states.

Twelve states have no explicit policy regarding this care. Three states exclude transgender-related healthcare for minors, while nine states exclude this care for beneficiaries of all ages. Over a quarter (27 percent) of the LGBTQ+ population live in states that prohibit transgender-related care for all beneficiaries.

In the past few years, Medicaid plans have launched initiatives to help improve care for LGBTQ+ beneficiaries, a report from the Association for Community Affiliated Plans (ACAP) highlighted.

For example, Children’s Community Health Plan in Milwaukee, WI, mandates cultural competency training, established a Diversity Committee, and offers a resource list with information on support groups, crisis hotlines, and other educational services.

University of Pittsburgh Medical Center (UPMC) Health Plan has a member services team specially trained to address the health needs of transgender members. The plan also has a Transgender Task Force to answer questions about coverage, provider referrals, and gender-affirming care.

Additionally, the Visiting Nurse Service of New York (VNSNY) CHOICE Health Plan offers an HIV Special Needs Plan that covers physical and behavioral healthcare and social support services.

Medicare

Around 1.5 million LGBTQ+ people in the United States are 65 or older and, therefore, may receive healthcare coverage through Medicare.

Spousal benefits and income limits in Medicare are the same for opposite-sex and same-sex married couples. Medicare recognizes same-sex marriages performed in any state and other countries.

According to the LGBT Aging Center, Medicare approves coverage of medically necessary gender-affirming surgeries to address gender dysphoria on a case-by-case basis. Medicare follows the World Professional Association for Transgender Health (WPATH) Standards of Care when determining necessity.

Medicare Part D covers medically necessary transition-related drugs, though beneficiaries generally need prior authorization before coverage is approved.

With more freedom to offer additional benefits, Medicare Advantage plans can help improve coverage for older LGBTQ+ adults. SCAN Health Plan offers a Medicare Advantage plan designed to address the specific needs of beneficiaries who identify as part of the LGBTQ+ community.

The payer partnered with a digital health platform, allowing members to access care management services, healthcare navigation support, and on-demand virtual care. The plan also offers lower copays for specialty tier drugs, including HIV treatments and gender-affirming hormone treatment.

ACA Marketplace

Like Medicaid and Medicare plans, ACA marketplace plans cannot discriminate based on sexual orientation or gender identity. All states treat same-sex married couples like opposite-sex married couples when they apply for premium tax credits and lower out-of-pocket costs.

Under the ACA, health insurance plans cannot discriminate against people with pre-existing conditions, including cancer and HIV. Prior to the ACA, transgender people or people with HIV could be dropped from or denied coverage.

ACA marketplace plans must cover certain preventive care services, including HIV screening and pre-exposure prophylaxis (PrEP). HIV disproportionately impacts the LGBTQ+ community, according to the Human Rights Campaign.

Marketplace plans also cannot limit sex-specific preventive services based on a member’s sex assigned at birth, gender identity, or recorded gender.

However, some marketplace plans exclude coverage for gender-affirming care. Coverage varies by state and plans may use different language for these exclusions, such as “All procedures related to being transgender are not covered,” HealthCare.gov explains.

Commercial plans

The most common type of commercial health insurance is employer-sponsored health plans. Fully-insured employer-sponsored health plans are subject to state insurance law and applicable federal law. Insurance nondiscrimination laws and policies that protect LGBTQ+ people from unfair treatment in private health plans vary across the country.

In 14 states and Washington, DC, the law prohibits health insurance discrimination based on sexual orientation and gender identity. In eight states, the law prohibits insurance discrimination based on gender identity only. Twenty-four states, most of which have these laws in place, also prohibit exclusions of transgender-related care in private health plans.

Nearly 45 percent of the LGBTQ+ population lives in the 26 states that have no law providing LGBTQ+ inclusive insurance protections. Two states have laws that explicitly allow insurers to refuse to cover gender-affirming care.

Data from NORC at the University of Chicago indicated that, as of 2020, employer-sponsored health plans were lacking health equity. Behavioral healthcare diagnoses, heavy alcohol use, and illicit drug use were more common among lesbian, gay, and bisexual members compared to straight members.

However, some private payers have demonstrated commitments to improving access to care for their LGBTQ+ populations. For example, in 2022, CareSource donated $1 million to a nonprofit senior living organization to support the development of a residential community designed for LGBTQ+ individuals and allies.

In addition, the United Health Foundation contributed $2 million in March 2023 to a nonprofit organization that serves the LGBTQ+ community and people living with HIV. The nonprofit helps connect LGBTQ+ and BIPOC youth in Minnesota to mental healthcare and substance use services and social determinants of health services.