- The federal lawsuit challenging North Carolina State Health Plan restrictions on coverage for medical treatments sought by transgender patients will return to a trial judge.
- The 4th US Circuit Court of Appeals issued an order Tuesday returning the case to the trial level.
- It's not clear which judge will hear the case. US District Judge Loretta Biggs left the case on Aug. 25.
The lawsuit challenging North Carolina State Health Plan restrictions on coverage of treatments typically sought by transgender patients is returning to a federal trial court. It’s not clear which judge will oversee the case.
US District Judge Loretta Biggs issued a 2022 injunction forcing the health plan to provide the disputed coverage. A split 4th US Circuit Court of Appeals voted, 8-6, to affirm Biggs’ decision in 2024.
But the US Supreme Court issued an order in June vacating the 4th Circuit’s ruling. The high court called on the 4th Circuit to revisit the North Carolina case, Kadel v. Folwell, in light of a Supreme Court ruling in the Tennessee case United States v. Skrmetti. In that case, justices upheld a Tennessee law banning puberty blockers and hormone therapy for transgender teens.
“On June 30, 2025, the Supreme Court entered an order vacating this court’s judgment in this case and remanding it for consideration in light of the Supreme Court’s opinion in United States v. Skrmetti,” according to a 4th Circuit order issued Tuesday. “This court now vacates the district court’s judgment and remands this case to the district court for further consideration in light of Skrmetti.”
Court Clerk Nwamaka Anowi entered the order “at the direction of” 4th Circuit Chief Judge Albert Diaz.
It’s not clear which US District Court judge will hear the case moving forward. An Aug. 25 trial court text order indicated that Biggs is “no longer assigned to the case.” It has been reassigned to “unassigned.”
Parties in the case had offerd competing arguments to the 4th Circuit this month about how the case should proceed.
Lawyers representing the health plan sent Anowi a Sept. 11 letter urging the Appeals Court to vacate Biggs’ 2022 injunction. The letter also called on appellate judges to require the trial court to deny the plaintiff’s motion for summary judgment in the case.
The plaintiffs responded with a Sept. 16 letter urging the 4th Circuit to reject the health plan’s request.
The high court’s June order called for the 4th Circuit to give the case “further consideration in light of United States v. Skrmetti.”
“Once the full legal process is finalized in the coming weeks, we anticipate this will lead to the State Health Plan of North Carolina re-implementing the longstanding exclusion on transition-related medical care,” State Treasurer Brad Briner’s office said in a news release responding to the Supreme Court’s order. The treasurer oversees the health plan.
“Kadel v. Folwell has always been about one question. Do the people of North Carolina, through their elected representatives, get to ultimately manage the State Health Plan? Or can plaintiffs dictate what procedures we cover? We are gratified that the Supreme Court has agreed with our strongly held belief in the State Health Plan Board of Trustees’ authority in this matter,” the news release continued.
Briner’s office issued a June 18 news release predicting that the Supreme Court would reverse earlier rulings against the State Health Plan in Folwell v. Kadel. That prediction was based on the court’s 6-3 ruling in Skrmetti.
“The Court’s ruling in Tennessee’s equal protection case upholds our arguments in the long-running Kadel v. Folwell case here in North Carolina,” Briner said in the news release. “In its simplest form, this case has always been about ensuring that the State Health Plan can conduct its business in a manner that best serves the members of the Plan. We are thankful that the Supreme Court has affirmed the ability of the Plan to do just that.”
The North Carolina case stemmed from the exclusion of “transition-related medical procedures and medications” from State Health Plan coverage. The exclusion dated back to the 1990s, with a one-year exception in 2016.
“Exclusions lists are commonplace in most insurance coverage,” according to the treasurer’s news release. “Lists include the procedures and medications your health plan will not pay for in an effort to ensure that members receive high-quality care and maintain affordable health coverage. For example, the Plan’s current exclusions list includes GLP-1s when used for weight loss, acupuncture, and durable medical equipment.”
A federal trial court ordered the State Health Plan to cover the transition-related services. The full 4th US Circuit Court of Appeals split, 8-6, in an April 2024 ruling favoring plaintiffs who challenged the exclusion.
Then-Treasurer Dale Folwell and the State Health Plan appealed to the US Supreme Court. The goal was to preserve the plan’s ability “to conduct its business according to the wishes of its members,” according to the treasurer’s news release.
The treasurer’s lawyers filed paperwork last November with the high court. They rebutted arguments plaintiffs made in October urging Supreme Court justices to reject the case.
“The en banc Fourth Circuit held that the North Carolina State Health Plan for Teachers and State Employees violated the Equal Protection Clause by refusing to provide insurance coverage for treatments ‘leading to or in connection with sex changes,’” the treasurer’s lawyers wrote. “That decision conflicts with decisions from several other circuits and is both profoundly wrong and profoundly important. It merits this Court’s review.”
The plaintiffs “come nowhere close to refuting any of those points,” the court filing continued. “They do not deny that courts are divided over whether laws that prohibit access to or restrict insurance coverage for sex-change treatments violate the Equal Protection Clause. And they have no persuasive argument that the Fourth Circuit lies on the right side of the divide. Nor do they deny that the equal-protection question is of national importance.”
“One way or another, the Court should not allow the Fourth Circuit’s flawed decision to be the last word on an issue that demands a sensible and uniform national answer,” the treasurer’s lawyers argued.
The plaintiffs, considered respondents in the case, offered their arguments to the Supreme Court in October 2024.
“North Carolina and West Virginia administer health plans to cover medically necessary healthcare for their state employees and indigent citizens, respectively. Both plans, however, contain a targeted exception: they categorically exclude medically necessary gender-affirming care for transgender recipients,” according to the respondents’ brief. “The same treatments are available to cisgender members, including for gender-affirming reasons.”
“These exclusions have serious consequences for the States’ transgender plan members: if untreated, gender dysphoria — the condition of marked incongruence between one’s gender and one’s sex assigned at birth — can have debilitating consequences, including depression, self-injury, and even suicide,” according to the court filing.
Twenty-four states filed a brief in August 2024 supporting North Carolina and West Virginia in their appeals to the US Supreme Court. The 4th Circuit had ruled against West Virginia in a case similar to the Kadel dispute.
In an 8-6 ruling, the 4th US Circuit Court of Appeals tossed out the North Carolina State Health Plan’s ban on covering sex-change surgeries and other treatments.
“Do healthcare plans that cover medically necessary treatments for certain diagnoses but bar coverage of those same medically necessary treatments for a diagnosis unique to transgender patients violate either the Equal Protection Clause or other provisions of federal law? We hold that they do,” wrote Judge Roger Gregory for the court majority.
The treasurer’s lawyers filed a petition with the US Supreme Court in July 2024.
“For decades, the North Carolina State Health Plan for Teachers and State Employees has chosen to exclude coverage for treatments ‘leading to or in connection with sex changes or modifications.’ That exclusion is one of many in the Plan, which also excludes coverage for cosmetic services, experimental treatments, surgery for psychological or emotional reasons, and more,” according to the petition. “Each of those choices is designed to ensure that the Plan can provide the best possible coverage for all 740,000 of its members at a reasonable cost.”
“In the decision below, the en banc Fourth Circuit concluded that North Carolina’s coverage choices violate the Equal Protection Clause and permanently enjoined the State from excluding coverage for sex-change treatments,” the Supreme Court petition continued. “That decision is seriously flawed. North Carolina’s exclusion of coverage for sex-change treatments does not draw any classifications based on any protected trait. It distinguishes between medical treatments.”
The 4th Circuit decision “deviates” from tradition, the treasurer’s lawyers wrote. “The decision deepens a conflict among the courts of appeals about whether laws targeting sex-change treatments trigger heightened scrutiny. The decision is egregiously wrong, and the question presented is profoundly important.”