The State Health Plan's Board of Trustees announced Monday it plans to reinstate its ban on covering gender-affirming health care for state employees and family members.

The U.S. Supreme Court’s June 19 order affirming Tennessee’s law that bans gender-affirming surgery for transgender youths was expected to have an impact on the State Health Plan’s court-ordered requirement.

On Monday, the Supreme Court vacated the U.S. Court of Appeals for the Fourth Circuit's ruling in the case of Kadel v. former state Treasurer Dale Folwell. The case has been remanded to the appeals court.

"Today, the Supreme Court followed through as we expected," state Treasurer Brad Briner, who serves as chairman of the State Health Plan board, said Monday. 

"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."

The State Health Plan is N.C.’s largest purchaser of medical and pharmaceutical services and is self-funded. It covers about 750,000 teachers, state employees, legislators, retirees and their dependents.

As of November 2023, the 541 State Health Plan participants who receive gender-affirming care represented 0.007% of the overall membership. The plan’s 2024 expenditures for those beneficiaries was just more than $2.4 million.

Lambda Legal, which filed the lawsuit against the state in March 2019, said it will continue to pursue 

When the June 19 U.S. Supreme Court ruling was announced, Tara Borelli, senior counsel at Lambda Legal, said in a statement that “The Supreme Court’s limited, context-specific decision does not change the analysis in Kadel v. Folwell.”

Borelli said the Kadel plaintiffs “won on other grounds that are not affected by the Tennessee decision, and their victory remains the law of the land.”

On Monday, Borelli said that "government works for the people, and taxpayer dollars should not be used to sponsor discrimination."

"Our fight for equal treatment continues. Tthis case, which involves multiple claims, can and will continue before the Court of Appeals and the District Court.

"We look forward to presenting further arguments to the court, and no exclusion can or should be implemented while this legal process is ongoing.”

Briner said the state would work with Aetna, Caremark and other vendors to guarantee the plan is following the law.

The bill prohibits the use of state funds by public health care facilities, including public hospitals and University of North Carolina affiliates, to perform any surgical gender transition procedure on a minor, or providing them with puberty-blocking drugs or cross-sex hormones.

However, the law creates an exception for the State Health Plan because of the federal court decision.

Briner said the case "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 state’s refusal to cover surgical and hormonal treatments related to the diagnosis of gender dysphoria dates back to the 1990s.

In December 2016, Democratic state Treasurer Janet Cowell and the state health plan board voted to allow coverage of gender-affirming care for members and family members for a year, citing projected federal regulatory changes.

Coverage included paying for medical treatments, such as hormone therapy and surgeries, for transgender individuals.

The board vote took place three weeks before Folwell began his first term as treasurer on Jan. 1, 2017.

The health plan, under Folwell’s guidance, allowed the coverage to expire in 2017.

Folwell said at the time the health plan’s “main priority is to provide coverage that does the most good for the highest number of people with the finite resources we have available.”

He added, “We cannot be everything for everyone.”

In June 2022, Judge Loretta Biggs of the Middle District of N.C. ruled in favor of plaintiffs who sued in March 2019 to require the state to provide coverage.

The federal Fourth Circuit Court of Appeals upheld Biggs’ order in April 2024.

The U.S. Supreme Court’s ruling in the U.S. v. Skrmetti involved a challenge brought by three transgender adolescents, their families and a Memphis-based medical provider against a Tennessee law banning gender-affirming hormone therapies for transgender people under 18.

The court ruling allows the Tennessee law to remain in effect.

Chief Justice John Roberts wrote in the majority opinion that Tennessee’s ban does not violate the Constitution’s equal protection clause, which requires the government to treat similarly situated people the same.