San Francisco City and County Transgender Health Benefit - Letter from Human Rights Commission
In July 2001, the City and County of San Francisco made history by becoming the first U.S. jurisdiction and major employer to remove transgender access exclusions in its employee and dependent health plans. The plan, as it was first made available in 2001, reflected concerns about cost and utilization — concerns since proven unfounded.
The health plan covers transition-related treatment including surgery performed by a qualified provider as part of a treatment plan conforming to the WPATH Standards of Care. Furthermore, plan participants who require psychotherapy for gender identity disorders or transsexualism, and/or hormones, may receive them under routine psychotherapy and pharmacy benefits.
2001
San Francisco originally administered its transgender benefits through the city's self-funded preferred provider organization, Beech Street Corp. The city's HMO plan providers were not able to offer such coverage until they received authorization from the Department of Managed Care that controls HMOs in California.
With more than 28,000 employees — 80,000 insured individuals including retirees and dependents — administrators originally anticipated as many as 35 people might use the benefits each year. Lifetime surgical benefits were capped at $50,000 and required a standard $250 deductible, after which the policy required a 15 percent co-pay in-network and 50 percent co-pay out-of-network. Eligibility to use the benefit was limited to employees, retirees or dependents who were members of the San Francisco Health Service System for more than one year.
To cover expected additional costs associated with gender transition-related claims, all employees were charged an additional $1.70 per month for health benefits.
2004
To comply with Department of Managed Care rules and ensure that equal benefits were provided to both female-to-male and male-to-female transsexuals, San Francisco raised the lifetime cap to $75,000 and removed the requirement of one year of membership in the Health Service System. HMO coverage through Health Net, Kaiser Permanente and Blue Shield began as of July 1, 2004.
At this point, San Francisco had collected $4.5 million in surcharges to offset projected claims. But in the three years, the system had just 7 claims totaling $156,000. As a result, the per employee surcharge was lowered to $1.16 per month.
2006
By 2006, the system had collected $5.6 million in surcharges to offset 210 projected claims, and had paid out just $386,417 on 39 claims. In July 2006, the per employee surcharges were dropped entirely.
"Despite actuarial fears of over-utilization and a potentially expensive benefit, the Transgender Health Benefit Program has proven to be appropriately accessed and undeniably more affordable than other, often routinely covered, procedures."
— 2006 letter from San Francisco's Human Rights Commission
In other words, transgender people were not flocking to work for the city, and the cost of covering transgender employees' health needs was relatively inexpensive, compared to other health needs of San Francisco employees. Employees of the City and County of San Francisco and those employees' dependents may now access transgender specific treatments without the need for any plan members to pay any additional premiums, as they did the first few years the program was available.
