San Francisco Transgender Benefit: Making Of (1994-2001)
In 2001, the City and County of San Francisco ("San Francisco") became the first major U.S. employer to publicly remove discriminatory transgender access exclusions in its health insurance plans for employees, retirees and their dependents in order to explicitly cover medically necessary treatment for transgender transition. See our complete set of resources on San Francisco's Transgender Benefit.
In 1994, San Francisco's Board of Supervisors included "gender identity" in the non-discrimination language of its administrative code. The 1994 report recommending this non-discrimination language had also recommended that the Health Services System Board "modify the City Plan to cover transsexual treatment and procedures." San Francisco's Human Rights Commission began researching the benefits and costs of providing transgender inclusive coverage.
- Investigation Into Discrimination Against Transgendered People (PDF) September 1994 [sf-hrc.org]
In October 1997, the Human Rights Commission released its report, "Insurance Coverage for Transsexual Employees of the City and County of San Francisco," that argued that "singling out transsexual people and excluding coverage of their non-elective medical needs is suspect, and creates a situation in which full utilization of benefits is impeded for these employees, tantamount to unequal compensation for labor."
- Insurance Coverage for Transsexual Employees of the City and County of San Francisco. October 1997
The report documented the medical consensus regarding the diagnostic and treatment process for transsexualism: that sex reassignment services were both medically necessary and effective treatments, and also showed how current exclusions meant barriers to other critical non-transition related care.
The report also attempted to estimate total costs for transitioning individuals at the time with extremely conservative, over-projected estimates designed to protect San Francisco from early opposition and fears of bankrupting the health insurance plans. Because very little data exists on the costs and utilization of services related to transitioning, these estimates used rough estimates of data from British Columbia, where services were covered under the province's public health insurance plan. These estimates recognized some understanding of the medical needs of transitioning people, but often fell short, as demonstrated by actual claims over the next five years.
With these conservative actuarial estimates, San Francisco's Health Systems Board drafted a a one-year "pilot" run for the self-insured Preferred Provider Organization (PPO) plan known as the "City Plan," and not the Health Maintenance Organization (HMO) plans. On February 20, 2001, with a unanimous vote of all present, the San Francisco Board of Supervisors passed a resolution calling on the Health Service System Board to eliminate the transgender exclusions and commending their efforts towards inclusive coverage.
In April, a sub-committee of the Board of Supervisors approved a package of formal changes to the City Plan[1] which provided for the one-year pilot of the transgender benefit and other unrelated plan changes such as infertility services. A final vote on this package of changes to the City Plan was scheduled for April 23, but was delayed by Supervisor Mark Leno in order to ensure the nine votes necessary for passage. On April 30, 2001, the Board of Supervisors voted 9-2 for the package of changes to the City Plan, including the Transgender Benefit. Both of the opponents, Supervisors Hall and Yee, had been "yes" votes for the February 2001 resolution.
The Transgender Benefit finally began on July 1, 2001.
Countering Misconceptions
Despite thoughtful responses from San Francisco supervisors and administrators, opponents to the transgender benefit focused on two main points: the belief that transition-related services were not medically necessary and the fear that costs would be astronomical.
Medical Necessity — Treatment of Gender Identity Disorder, Gender Dysphoria, Transsexualism
A common misconception about transition-related care is due to the lack of understanding the medical necessity and non-cosmetic nature of transition-related care from qualified health professionals.
Supervisor Tony Hall's comments were suggestive of the ignorance regarding the severity of the condition:
"[T]he proposition could unleash demands from others seeking special benefits. What about those people who suffer from 'personal appearance dysphoria.' Perhaps they don't like the way they look. Perhaps they want to change the color of their skin... Surely there are many other groups of individuals who feel great discomfort and suffer mental anguish because something about their persona is not to their liking."[2] Other commentaries referring to "sex changes" instead of using the medical term "sex reassignment" reflected common perceptions that services were not medically necessary ("Public funding of sex change operations, give me a break"). The response of one writer was simply, "Not on my dime."[3]
One commentator quipped, "Want a free boob job, courtesy of the U.S. government" estimated costs for what she called an "unnecessary, cosmetic procedure" for "de facto mentally ill patients."[4]
One such writer noted that others might be surprised at her lack of opposition. However, as she put it, "it's hard to say no to a remedy — or what one hopes is a remedy — designed to help people with a problem not of their making."[5]
Supporters and the published report of the Transgender Benefit both pointed out that coverage was only for services declared medical necessary by health professionals, that cosmetic surgery would still not be covered, and that the screening process would include an extensive medical review.
Costs and adverse selection
Costs of transition-related coverage are another common source of concern, but opponents often fail to recognize that the number of people who undergo treatment is extremely small. Nor do they take into account the cost of not providing the necessary and effective treatment for a person.
Costs of treatment. Many opponents failed to comprehend that the utilization predictions by the City's actuaries had already accounted for a worst case scenario.
Understanding that services may already be covered. In San Francisco in 2001, mental health counseling and hormone therapy were already covered under its health plans and would not be additional costs.
Adverse selection and the magnet effect. In San Francisco in 2001, opponents feared a "magnet effect," meaning the existence of the benefit would create a larger than average number of transgender employees over time, resulting in adverse selection within San Francisco's employee and retiree health plans.
A doctor writing to the American Medical Association News asked: "What if all the transgendered [sic] people in town go after city government jobs? What if all those people so inclined in California head for San Francisco?"[6] Supervisor Hall predicted greater costs and even bankruptcy for the City, "If San Francisco is the only municipality that will finance sex-change surgery for its employees, one would expect that many persons desiring such a procedure would relocate and seek city jobs."[7]
Moving Forward
The fears of high costs and an overwhelming increase in transgender people seeking jobs are the same concerns that continue to be articulated by some employers today. The historical account reflected here underscores that these same concerns have were raised in the case of the City and County of San Francisco, and were proven entirely unfounded. Nonetheless, San Francisco began its transgender benefit based on a worst case scenario.
[1] Dozetos, Barbara. "S.F. to Finance Gender Reassignments." Gay.com/PlanetOut.com. May 1, 2001.
[2] Gordon, Rachel. "Vote to add sex change benefit is delayed, S.F. supervisors to see bill again next week." San Francisco Chronicle. April 24, 2001. Available at: http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/04/24/MNW216137.DTL
[3] From online commentary by contributors at http://www.southhigh.com/messages13.html on May 2-3 2001.
[4] Schlussel, D. "Mainstreaming Deviancy." WorldNetDaily. May 4 2001. Available at: http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=22694.
[5] Saunders, Debra J. "Sex Change In the City." San Francisco Chronicle. March 18, 2001. Available at: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2001/03/18/ED199649.DTL
[6] Commentary. Anderson, E., MD. "With supersize wants, it's time to ask: Do we needit?" March 19, 2001. http://www.ama-assn.org/amednews/2001/03/19/edca0319.htm
[7] Hall, Tony. "Are Nose Jobs Next?" San Francisco Chronicle. April 29, 2001. Available at: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2001/04/29/IN238191.DTL
Well-known gay author, Arthur Evans, echoed this fear in another commentary in the same issue: "In opening the door for city-paid sex changes, supporters claim that very few people would be affected. But they fail to take into account what I call the San Francisco magnet effect. Our city gets national publicity for everything it does. Once Leno's proposal becomes law, will transgender people across the country head here, seeking city jobs so they can get their sex changes paid for?" The week before, Rob Morse opined: "If city workers are covered for sex-change operations, how many people are going to become city workers just for the operation? One seventh of Americans have no health plan at all, and thousands of them are sitting on our street corners making everyone feel dysphoric -- from the Greek for "hard to bear." Those of us who have health plans have to wait hours to see a doctor and get billed for services much more basic than a change of gender".
On February 22, Mark Morford suggested that few current employees would be affected but more would arrive: "Because it's of course a wonderful step forward for all transgendered folk, a largely misunderstood fringe population said to be about 15,000 in the Bay Area alone, which I imagine translates to roughly four very surprised and relieved City employees, proportionately speaking, which will of course become a lot more in the coming years as the transgender-minded start applying for City jobs in droves, as well they should, because hey, bennies."
