Iowa lawmakers pass bill banning Medicaid coverage for gender-affirming care

Iowa Medicaid would no longer cover surgical procedures and hormone therapy related to treating Iowans with gender dysphoria under a Republican-backed bill on its way to Gov. Kim Reynolds for her expected signature.

The Iowa Senate on Wednesday passed House File 1049, a budget bill that appropriates $2.47 billion to the Iowa Department of Health and Human Services, including Iowa's Medicaid program, as well as the Department of Veterans Affairs for the upcoming budget year.

It includes a provision prohibiting money allocated for Medicaid from being used for reimbursement for sex reassignment surgery or associated procedures, including hormone therapy or other medical interventions intended to alter primary or secondary sex characteristics related to an individual's gender dysphoria diagnosis.

Opponents had warned an early version of the bill could prohibit mental health treatment for gender dysphoria in addition to surgery, hormone therapy and other medical interventions.

The language was clarified to state the section does not prohibit Medicaid reimbursement for services otherwise covered under Medicaid, including mental health counseling.

"If someone is in mental distress, if someone is suicidal, the treatment for those issues is not surgery. It's not hormone treatment," said Rep. Ann Meyer, R-Fort Dodge, the bill's floor manager. "It's behavioral health, which we fully commit to covering."

The Iowa House passed the bill Tuesday on a 63-28 vote, and the Iowa Senate voted 31-15 on Wednesday, sending the measure to Reynolds' desk.

Iowa has spent $3.4M on hormone therapy, surgery, services

From 2015 to 2024, the state has spent roughly $3.4 million on Medicaid- or Children's Health Insurance Program-funded surgery, hormone therapy, infertility services, mental health counseling and voice and communication therapy for hundreds of transgender individuals, according to data from the Iowa Department of Health and Human Services.

Of that, roughly $1.24 million was spent for hormone therapy and about $1.14 million on mental health counseling. About $967,000 was spent on surgery, $16,607 for voice and communication therapy services and $463 for infertility services between 2015 and 2024.

It's a tiny sliver of the billions the state spends annually on Medicaid funding. The projected total Medicaid budget for the current year is approximately $9 billion, with state funds contributing $2.2 billion and federal and other funds contributing $6.8 billion.

The move comes just months after Reynolds signed into law legislation repealing protections for transgender Iowans against discrimination in housing, employment, lending, public accommodations and more, making Iowa the first state in the nation to remove a protected class from a state's civil rights act.

Reynolds and Republican lawmakers argued the protections in the Civil Rights Act endanger state laws they passed in recent years restricting transgender rights. That includes a 2023 law that bans physicians from prescribing puberty blockers and cross-sex hormones or authorizing surgery for treatment of gender dysphoria for minors under the age of 18.

Supporters of the legislation pointed to the Iowa courts' determination in 2023 that the state's previous attempt to ban Medicaid coverage for gender transition surgery was unconstitutional. A judge cited the inclusion of gender identity in the Iowa Civil Rights Act in his ruling. The court also ruled the ban violated the Iowa Constitution's equal protection clause.

Major medical associations — including the American Medical Association, the American Pediatric Association and the American Association of Psychiatrists — recognize gender-affirming care as medically-necessary, evidence-based care that improves the physical and mental health of transgender and gender-diverse individuals.

In a letter to state governors in 2021, the American Medical Association urged against limiting the practice and said gender-affirming care correlates with a reduction in mental health problems and suicide attempts.

Rep. Aime Wichtendahl, D-Hiawatha, the first openly transgender member of the Iowa Legislature, said the gender-affirming care she received when she was experiencing depression and suicidal thoughts saved her life.

"Gender-affirming care enabled me to live my best life. I am still here today because of it," Wichtendahl said. "… I do not see any reason why this government should deny its citizens health care and deny them the ability to live their best lives."

Meyer said Iowa Medicaid will still provide treatment for gender dysphoria through behavioral health treatment, but that most Iowans agree taxpayers shouldn't pay for someone else's sex reassignment surgery.

Democrats argued the provision would be found unconstitutional.

Sen. Molly Donahue, D-Marion, said the bill singles out people for unequal treatment by "restricting access to medically recognized evidence-based care solely because of a person's gender identity."

"It is cruel and it is inhumane," Donahue said. " … That is a violation of equal protection, plain and simple. That is discriminatory. It is harmful and that is unconstitutional under the equal protections clause of our state constitution, something that the Iowa courts and others across the nation have already repeatedly affirmed."