L.B. v. Premera Blue Cross

Opinion

UNITED STATES DISTRICT COURT AT SEATTLE L.B. and M.B., individually and on behalf of their minor child A.B.; C.M. and A.H., individually and on behalf of their minor child J.M.; and on behalf of others similarly situated, C23-0953 TSZ Plaintiffs, ORDER v. PREMERA BLUE CROSS, Defendant.

THIS MATTER comes before the Court on the parties’ proposed stipulated judgment, docket no. 174, which was deferred pending briefing on the effect, if any, of United States v. Skrmetti, 605 U.S. ---, 145 S. Ct. 1816 (2025). See Minute Order at ¶ 1 (docket no. 176). Having concluded that Skrmetti does not alter the result in this case, the Court DIRECTS the Clerk to enter judgment in the form proposed by the parties and to CLOSE this case. Background By Order entered April 18, 2025, the Court ruled that plaintiffs are entitled to a declaratory judgment that the challenged medical policy of defendant Premera Blue Cross (“Premera”) violates Section 1557 of the Patient Protection and Affordable Care Act of 2010 (“ACA § 1557”)1 by facially discriminating on the basis of sex. Order at

16–21 & 31 (docket no. 169). Premera’s various medical policies apply whenever Premera makes coverage decisions, regardless of which health care plan is involved. See id. at 6. The policy at issue, Premera Medical Policy – 7.01.557, does not provide insurance coverage for “female to male patients” or “female to non-binary/gender neutral patients” who are under “18 years of age” and seek a “mastectomy or breast reduction.” See Ex. B to Hamburger Decl. (docket no. 46-2 at 4–5) (emphasis added). Another

medical policy, however, offers insurance coverage for “boys” (i.e., males under 18 years of age) who have mastectomies to treat “gynecomastia.” See Premera Medical Policy – 7.01.521, Ex. E to Hamburger Decl. (docket no. 46-5 at 2–3) (emphasis added). In other words, Premera’s medical policies treat minors differently with respect to insurance coverage for gender-affirming mastectomies based on their natal sex, as well as their

transgender or cisgender status. On June 13, 2025, the parties filed a proposed stipulated judgment that (i) is consistent with the Court’s prior Order, (ii) awards $25,750 in out-of-pocket expenses plus $1 in nominal damages to plaintiffs L.B. and M.B. on behalf of A.B., as well as

1 ACA § 1557 provides, in relevant part, that “an individual shall not, on the ground prohibited under . . . title IX of the Education Amendments of 1972 [(“Title IX”)] . . . , be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any health program or activity, any part of which is receiving Federal financial assistance.” 42 U.S.C. § 18116(a). By referencing Title IX, ACA § 1557 prohibits discrimination “on the basis of sex.” See 20 U.S.C. § 1681(a). $1 in nominal damages to plaintiffs C.M. and A.H. on behalf of J.M., and (iii) defers consideration of attorney’s fees and costs pursuant to 42 U.S.C. § 1988 pending

resolution of any appeal. See Prop. Stip. Judgment (docket no. 174). Five days later, on June 18, 2025, the United States Supreme Court issued its decision in Skrmetti. On the same day, Premera filed a notice of supplemental authority and requested an opportunity to brief the effect, if any, of Skrmetti. See Notice (docket no. 175). The Court allowed Premera to file an opening brief and plaintiffs to file a response brief. See Minute Order at ¶¶ 1(a)–(b) (docket no. 176). Premera subsequently

sought and was granted permission to file (and has filed) a reply brief. On July 7, 2025, the United States Department of Justice (“DOJ”) filed a “Statement of Interest,” docket no. 179, which has been considered by the Court. Plaintiffs requested and were provided an opportunity to respond to the DOJ’s brief, and both Premera and the DOJ were allowed to file a reply, but neither has done so. See Minute Order (docket no. 183). The

question of whether Skrmetti has any bearing on this matter has now been fully briefed by the parties and the DOJ. Discussion A. Skrmetti is Distinguishable In Skrmetti, the Supreme Court held that Tennessee’s Senate Bill No. 1 (“SB1”),

Tenn. Code Ann. §§ 68-33-101 to -109 (2023), does not violate the Equal Protection Clause of the Fourteenth Amendment. See 145 S. Ct. at 1829–32 & 1835–37. The Skrmetti Court explained that, unless a law burdens a fundamental right or targets a suspect class, the legislation is provided “wide latitude” under “rational basis” review because “the Constitution presumes that even improvident decisions will eventually be rectified by the democratic processes.” Id. at 1828 (quoting City of Cleburne v. Cleburne

Living Ctr., 473 U.S. 432, 440 (1985)). In contrast to Skrmetti, in this matter, plaintiffs do not present a constitutional tort claim or challenge any governmental action, and unlike the Skrmetti Court, this Court need not decide what level of scrutiny to apply.2 See Order at 19 n.8 (docket no. 169). Moreover, Premera’s medical policies are not governed by the ballot box and, with respect to this litigation between individuals and their health insurers, “democratic processes” play no role. Rather, Premera’s policies are

regulated by various laws, including ACA § 1557, which was not at issue in Skrmetti. Not only did Skrmetti involve a fundamentally different type of claim than the ACA § 1557 claim raised in this case, but Skrmetti concerned statutory language that bears no resemblance to the medical policies that are the focus of this litigation. With respect to minors, Tennessee’s SB1 prohibits a healthcare provider from knowingly

performing, offering to perform, administering, or offering to administer a medical procedure “for the purpose of . . . [e]nabling a minor to identify with, or live as, a purported identity inconsistent with the minor’s sex; or . . . [t]reating purported discomfort or distress from a discordance between the minor’s sex and asserted identity.”

2 Premera erroneously asserts that “the Supreme Court declined to address the level of scrutiny question.” See Def.’s Reply at 2 (docket no. 184). The Court is left to wonder whether Premera and its counsel actually read the decision in Skrmetti. According to the Skrmetti Court, the sole question before it was “whether SB1 is subject to heightened scrutiny.” 145 S. Ct. at 1829. The Skrmetti Court answered in the negative, id., and it applied “rational basis” review to reach its decision, see id. at 1835–37. Tenn. Code Ann. § 68-33-103(a)(1) (emphasis added). SB1 applies to all minors regardless of sex.3 See Skrmetti, 145 S. Ct. at 1829. In contrast, Premera Medical

Policy – 7.01.557 applies solely to “female to male” or “female to non-binary/gender neutral” minors. See Order at 1–2 (docket no. 169) (emphasis added). Regardless of whether the term “sex” is defined narrowly as “sex assigned at birth” or broadly as “gender identity,” Premera’s medical policies explicitly discriminate on the basis of “sex” in violation of ACA § 1557. See id. at 16–21. In Skrmetti, the Supreme Court acknowledged that, just as some gender-specific

terms might be permissible, certain gender-neutral wording might “mask discrimination that is unlawful.” 145 S. Ct. at 1829. With regard to SB1, however, the Skrmetti Court reasoned that the law did not “prohibit conduct for one sex that it permits for the other.” Id. at 1831. Using this test, Premera’s medical policies differ from SB1. Unlike disabilities associated with pregnancy, which only one sex can experience, see id. at 1833

(citing Geduldig v. Aiello, 417 U.S. 484 (1974), superseded by statute, Pub. L. No. 95- 555, 92 Stat. 2076 (1978) (codified at 42 U.S.C. § 2000e(k))), mastectomies may be performed on both female and male adolescents for the exact same reason, namely gender affirmation. Premera’s medical policies, however, offer insurance coverage for one sex

3 Skrmetti involved only the use of puberty blockers or hormones to treat minors for various conditions, including gender dysphoria, gender identity disorder, and/or gender incongruence (as to which such medications are not permitted by SB1) or congenital defect, precocious (or early) puberty, disease, and/or physical injury (as to which prescriptions and dispensing are allowed). See 145 S. Ct. at 1826–27. The Skrmetti Court did not consider the surgical procedure at issue in this case, i.e., breast reduction or mastectomy. See id. at 1827 (observing that “the plaintiffs lacked standing to challenge the law’s ban on sex transition surgery for minors”). and not the other. Premera does what is expressly prohibited by ACA § 1557, i.e., “it regulates a class of persons identified on the basis of a specified characteristic,” namely

sex. See id. at 1834 n.3 (emphasis in original). In sum, nothing in Skrmetti undermines the validity of the Court’s Order entered April 18, 2025, docket no. 169. B. Skrmetti Supports the Court’s Decision Indeed, the analysis in Skrmetti supports the Court’s previous ruling. In Skrmetti, the Supreme Court reiterated the reasoning of Bostock v. Clayton County, 590 U.S. 644 (2020). See 145 S. Ct. at 1834–35. Bostock teaches that the “because of . . . sex” test set

forth in Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a)(1), incorporates “the traditional but-for causation standard, which ‘directs us to change one thing at a time and see if the outcome changes. If it does, we have found a but-for cause.’” Skrmetti, 145 S. Ct. at 1834 (quoting Bostock, 590 U.S. at 656). In Bostock, the Supreme Court held that an employer who fires a male employee for being attracted to men, i.e., for

being homosexual, or who fires a employee for being transgender, engages in discrimination on the basis of sex. See 590 U.S. at 651–52. Such employer has used “sex” as the but-for cause of the termination, penalizing the male employee for a trait (attraction to men) that is tolerated in female employees, and the transgender employee for sexual characteristics that are tolerated in cisgender employees. Id.; see Skrmetti, 145

S. Ct. at 1835 (“sex is the but-for cause of the employer’s decision―change the homosexual male employee’s sex and he becomes a straight female whose attraction to men the employer tolerates”). Although Skrmetti declined to consider whether Bostock extends beyond the Title VII context, 145 S. Ct. at 1834, the Court is satisfied that Bostock’s “but-for causation” analysis is appropriately applied to ACA § 1557’s “on the basis of sex” standard. See Doe v. Snyder, 28 F.4th 103, 114 (9th Cir. 2022). As with the

discriminatory discharge in Bostock, sex is the but-for cause of an insurance coverage denial under Premera’s medical policies―change the juvenile’s sex and she becomes an adolescent boy whose request for a gender-affirming mastectomy is not subject to any age restriction in ascertaining whether it is “medically necessary.” Notably, notwithstanding the wording of its medical policies, Premera does not advance a view that mastectomies are never “medically necessary” for “female to male”

or “female to non-binary/gender neutral” minors. Rather, Premera has employed a list of unwritten or secret exceptions pursuant to which thirty-five percent (35%) of all requests for coverage of a minor’s gender-affirming mastectomy have been granted, meaning that the procedures were by definition deemed “medically necessary.” See Order at 7–8 (docket no. 169). Given this record, Skrmetti suggests that Premera’s medical policies

would not pass muster even if “rational basis” review was the applicable standard. Unlike in Skrmetti, in which the State of Tennessee (i) articulated its unequivocal concerns about, and goal of protecting, the health and welfare of its minors, see 145 S. Ct. at 1835–36, and (ii) offered no secret exemption to SB1, in this matter, Premera’s objectives are inconsistent and ambiguous. Premera has fluctuated between its alleged

policy justifications (e.g., the insufficient maturity of minors and a dearth of scientifically-sound studies) and its actual practices, through which it has acknowledged the risks and dangers to transgender youth of refusing to insure gender-affirming care (e.g., chest binding that causes rib or skeletal injury or respiratory compromise, and suicidal ideation or self-harm behaviors). See Order at 7–8 (docket no. 169). This vacillating conduct evidences Premera’s own discomfort with the blanket exclusion set

forth in Premera Medical Policy – 7.01.557, and undermines any contention that what is written (as opposed to what is secretly applied) has any rational basis. Contrary to Premera’s and the DOJ’s contentions, the result in this case is consistent with Skrmetti.4 Conclusion For the foregoing reasons, the Court ORDERS: (1) The Court CONCLUDES that Skrmetti does not require any change to the

Order entered April 18, 2025, docket no. 169, and hereby REAFFIRMS its decision that plaintiffs are entitled to a declaratory judgment that Premera’s Medical Policy – 7.01.557 violates ACA § 1557 by facially discriminating on the basis of sex;

4 On June 30, 2025, twelve days after deciding Skrmetti, the Supreme Court vacated the decision of the United States Court of Appeals for the Fourth Circuit in Kadel v. Folwell, 100 F.4th 122 (4th Cir. 2024), vacated, --- S. Ct. ---, 2005 WL 1787687 (June 30, 2025). Premera asserts that the Court’s previous Order in this matter “turned almost entirely on the application of the Fourth Circuit’s decision in Kadel” and suggests that the Court’s Order “cannot stand now that Kadel has been vacated.” See Def.’s Reply at 5 (docket no. 184) (emphasis in original). Premera overstates the extent to which the Court relied on Kadel, and its contentions otherwise lack merit. Kadel involved consolidated appeals, one concerning the health plan for employees of North Carolina and the other relating to West Virginia’s Medicaid program. See 100 F.4th at 133–35 & 138. The plaintiffs in both matters challenged certain insurance coverage exclusions as violative of the Equal Protection Clause of the Fourteenth Amendment. See id. at 133–34. Because this case does not involve any similar constitutional tort claim, the vacatur of the Kadel Court’s decision has no impact on this Court’s earlier ruling. With respect to West Virginia’s Medicaid program, the result in Kadel also rested on the anti-discrimination mandate of ACA § 1557, see id. at 163–64, which was not the basis of any claim in Skrmetti or of the vacatur of the Kadel decision. In concluding that West Virginia’s Medicaid program violates ACA § 1557, the Kadel Court affirmed the district court’s application of Bostock, see id. at 164, and nothing in Skrmetti undermines the validity of Bostock or the extension of Bostock from Title VII to Title IX and/or ACA § 1557 claims. (2) The Clerk is DIRECTED to enter judgment in the form proposed by the parties, docket no. 174.

(3) The Clerk is further DIRECTED to send a copy of this Order and the Judgment to all counsel of record, and to CLOSE this case. Dated this 12th day of August, 2025. A Thomas S. Zilly United States District Judge