Many insurers exclude coverage for transgender individuals. Litigation challenging these exclusions has increased. Most of these cases successfully advance equality claims by arguing that trans exclusions discriminate based on sex. That is, procedures performed on patients for reasons unrelated to gender affirming care are being denied to transgender individuals. There are, however, limitations to this argument. First, some courts may construe care narrowly and hold that some procedures are unique to gender affirming care that have no analog in other contexts. Second, a court that is hostile to the sex discrimination argument might hold that the denial does not arise from sex discrimination, but rather, because of the kind of diagnosis at issue. Further, the sex discrimination argument might force transgender individuals into making claims based on a binarized gender identity which may not conform with their lived experience.

Claims based on the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) can address these shortcomings. This Act prohibits insurers from discriminating against mental health diagnoses—for example, procedures that insurers cover because of medical or surgical diagnoses should also be covered if indicated for mental health diagnoses. Gender dysphoria is a recognized mental health diagnosis. Transgender individuals seeking gender affirming care arising from gender dysphoria can thus claim that exclusions of coverage violate the MHPAEA. Some transgender individuals might raise concerns that such an approach would lead to increased medicalization of trans identity. However, an MHPAEA claim would only appear in cases where a transgender individual is voluntarily submitting themselves to medical assistance in order to advance their own autonomy.