- A recent federal Appeals Court ruling has led to the reinstatement of the North Carolina State Health Plan's exclusion of coverage for transition-related treatments typically sought by transgender patients.
- The State Health Plan publicized the news on the same day the Kadel v. Folwell case officially returned to a trial judge from the 4th US Circuit Court of Appeals.
- The 4th Circuit issued a Sept. 23 order vacating a 2022 injunction against the State Health Plan. The injunction had forced the plan to cover the disputed treatments.
The North Carolina State Health Plan announced Wednesday the reinstatement of its “longstanding exclusion of transition-related treatments” typically sought by transgender patients. The announcement arrived on the same day a court case challenging the exclusion officially returned to a federal trial court from the 4th US Circuit Court of Appeals.
The 4th Circuit issued a Sept. 23 order in Kadel v. Folwell vacating a trial judge’s 2022 decision to block the exclusion. The trial judge had required the State Health Plan to provide coverage for the disputed treatments. The mandate from the Appeals Court’s order reached the trial court Wednesday.
The decision “reinstates” the State Health Plan’s exclusion of transition-related treatments, according to a news release from State Treasurer Brad Briner’s office. Briner oversees the State Health Plan. “The exclusion dates back to the 1990s, and while litigation has been ongoing it has continued to appear in the annual list of exclusions for Plan members, even though it was inactive.”
“The Court’s decision to vacate the district court’s earlier ruling means the exclusion becomes active again,” according to the release. “The Plan communicated this anticipated action in June.”
“Generally, the exclusion does not prevent the treatment of any infection, injury, disease, disorder or complication that has been caused by or exacerbated by the performance of gender transition medical or pharmaceutical procedures,” the news release explained. “Additionally, in 2021, the Plan’s Board of Trustees affirmed continued coverage for psychological assessment and psychotherapy treatment in conjunction with a diagnosis of or connected to gender dysphoria. The reimplemented benefit exclusion does not exclude psychological assessment and psychotherapy treatment in these cases.”
“Plan staff is now working with our third-party administrator and health care providers to make sure this decision is fully communicated to all members affected by the reinstatement,” the news release added.
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 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 the 4th Circuit’s September order. “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 remains unassigned.
Parties in the case had offerd competing arguments to the 4th Circuit last 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.”
“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,” Briner’s office said in a news release responding to the Supreme Court decision.
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.”
The plaintiffs offered their arguments against the State Health Plan exclusion 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.