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Settlement reached in lawsuit against PeaceHealth’s transgender healthcare coverage

PeaceHealth, a Catholic nonprofit healthcare organization, operates St. Joseph Medical Center in Bellingham. A settlement was reached in December between PeaceHealth and the ACLU after a longtime Bellingham hospital worker sued PeaceHealth after it refused to cover her son’s gender reassignment surgery in October 2017.
PeaceHealth, a Catholic nonprofit healthcare organization, operates St. Joseph Medical Center in Bellingham. A settlement was reached in December between PeaceHealth and the ACLU after a longtime Bellingham hospital worker sued PeaceHealth after it refused to cover her son’s gender reassignment surgery in October 2017. The Bellingham Herald file

A settlement agreement was reached in late December between the American Civil Liberties Union of Washington and PeaceHealth, a Catholic nonprofit healthcare organization, involving coverage of transgender healthcare services provided under PeaceHealth’s employee medical plan, according to press releases from both agencies.

The ACLU filed the lawsuit in federal court in October 2017 on behalf of longtime St. Joseph hospital worker Cheryl Enstad after she said PeaceHealth refused to cover gender-reassignment surgery for her son, then 17-year-old Paxton Enstad. The surgery was deemed to be medically necessary by Paxton’s doctors to treat his gender dysphoria and its effects, according to a 2017 story by the Associated Press.

Cheryl Enstad had worked for the Bellingham hospital as a medical social worker from 1996 until April 2017. She and her husband had to take out a second mortgage and took money from Paxton’s college fund to pay more than $10,000 for his surgery, the AP reported.

The lawsuit argued that PeaceHealth’s policy was discriminatory and violated the Affordable Care Act and the Washington state anti-discrimination law.

As of Jan. 1, 2017, PeaceHealth changed its medical plan to cover transgender services that were determined to be medically necessary pursuant to Aetna’s gender reassignment surgery policy, according to the ACLU press release. The healthcare organization switched its provider from Regence Insurance to Aetna in 2017.

Under the amended medical plan, PeaceHealth’s 15,000-plus employees have access to transition-related care, but Aetna’s gender reassignment surgery policy doesn’t provide coverage for mastectomies and chest reconstruction surgery as a treatment for gender dysphoria for individuals under the age of 18.

Because Paxton is no longer a minor, the Enstads can’t challenge the amended medical plan as part of the lawsuit, the ACLU said.

“This is a bitter-sweet result for us,” Cheryl Enstad said in a prepared statement. “Our No. 1 priority in bringing this case was to ensure access to gender-affirming care for transgender people, and we are pleased PeaceHealth changed its policy. But we hope that PeaceHealth eventually removes the age-related limitation on coverage.”

Transgender lawsuit2
Paxton Enstad, left, addresses a 2017 news conference in Seattle about a lawsuit filed over refusal by an insurance plan to cover his gender-reassignment surgery as his parents, Cheryl and Mark Enstad, look on. The American Civil Liberties Union of Washington filed the discrimination lawsuit against PeaceHealth in federal court on behalf of Cheryl Enstad of Bellingham and her son. Elaine Thompson AP

In addition to the changes in the medical plan, the releases state the Enstads and PeaceHealth also reached a mutually agreeable settlement for the litigation. PeaceHealth is based in Vancouver, Wash., and operates 10 medical centers in Oregon, Washington and Alaska.

“We applaud PeaceHealth’s decision to include coverage for transition-related care in their employee medical plan, and hope it will set a good example for other employers to follow suit,” Lisa Nowlin, an attorney with the ACLU, said in a prepared statement.

In 2014, Washington Insurance Commissioner Mike Kreidler told health insurance carriers that were regulated by his office that they must cover transgender services if they also cover medically necessary care for others. Because PeaceHealth provides its own policy, it is not regulated by the commissioner’s office.

“PeaceHealth is committed to an inclusive healthcare environment for all and does not discriminate based on sex, sexual orientation, gender identity or any other basis prohibited by applicable federal, state, or local law,” the healthcare organization said in a prepared statement. “Throughout our 127-year heritage, we have been dedicated to embracing and celebrating the diversity of our communities, our caregivers and the individuals we are privileged to serve.”

Reporter Denver Pratt joined The Bellingham Herald in 2017 and covers courts and criminal and social justice. She has worked in Montana, Florida and Virginia.

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