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Daylight News

How to Choose the Best Transgender Health Insurance

Team Daylight
Health insurance can be difficult to navigate for anyone. For trans folks, there are a few extra things to look for when selecting a plan.

What are your transition goals?

Before getting started, map out any medical transition plan you have. What does gender-affirming care look like for you? Hormone therapy? Electrolysis? Gender affirmation surgeries?

The World Professional Association for Transgender Health  defines gender-affirming care as medically necessary, but transition coverage in the United States still varies among insurance companies and from state to state. As of July 2021, only 24 states and Washington, D.C. explicitly prohibit trans exclusions in health insurance coverage.

If your state doesn’t prohibit trans exclusions, you may have to do extra research to find a plan that covers the types of health care that will bee part of your medical transition journey.  

Even in states with broader trans protections, be aware of significant policy differences among facilities.

Some medical facilities let you start hormone replacement therapy (HRT) with informed consent. Others require a letter from a therapist. Some require HRT before gender affirmation surgery, while others let you choose which types of  medical transition make the most sense for you.

Knowing what you want for yourself is the most important step to ensuring you’ll find the coverage and care you need.  

How to choose a health insurance policy

In most states, you can only update your insurance policy or move to a new provider during an open enrollment period or within 60 days of a qualifying life event, like leaving a job, moving or a change in your family that affects your coverage.

For most states, open enrollment is from Nov. 1 through Dec. 15. During this time you can make any changes to your existing health insurance policy. This is a great time to see which policies cover the gender-affirming care you’re looking for.

A summary of benefits and coverage (SBC) is a snapshot of costs and benefits for a health insurance plan. Most insurers make these available online, and you can compare plans side by side through the government’s health insurance marketplace at Healthcare.gov.

When choosing a plan, use the SBC to compare deductibles, out-of-pocket limits, behavioral health coverage and drug coverage.

Here are the key points about each policy you’ll need to know:

  • A premium is the amount you pay, usually monthly, for your health insurance plan. Premium cost information will be provided separately from the SBC. If you’re on an employer-sponsored plan, your employer might pay for some or all of your premiums. If you’re eligible for tax credits through the Affordable Care Act, you’ll get a break on the cost of your premiums.
  • A deductible is the amount you pay for care each year before your insurance provider covers medical costs. Primary care and preventative services usually don’t count toward your deductible, so those would be covered regardless of how much you spend on medical care in a year. The deductible amount has a huge impact on the cost of your premium — the higher the deductible, the lower your premium. If you expect to have high medical costs in a given year, look for a low-deductible plan. If you expect to need only preventative or low-cost care, a high-deductible plan is usually fine.
  • The out-of-pocket maximum/limit is the most you will pay for health care in a year. If you expect high medical costs in a given year, look for a low out-of-pocket maximum. Adjusting the out-of-pocket could also help you land on a premium that fits your budget.
  • A copay is a flat fee you pay when you receive care. These usually apply to routine care, but some plans use copays for more complicated care, as well.. A copay lets you get routine care at a low cost, even if you haven’t met your deductible for the year yet. If you expect to only need routine care, a high-deductible plan with affordable copays could be the most cost-effective for you. If you expect to need more complex care in a given year, check how copays effect the cost of the services you’re looking for.
  • Coinsurance is a shared cost between you and your insurance provider for health care. This is shown as a percentage you pay. Plans usually include some services that aren’t covered 100%, so you’ll see the percentage of cost you’ll be responsible for. Coinsurance usually applies before and after you’ve met your deductible.

Check out Healthcare.gov’s glossary for other health insurance terms and definitions.

Choosing a plan

Most insurance plans will have either a high deductible and low premium, or, a high premium and low deductible. Deductibles reset every year, with most plans resetting on Jan. 1. If possible, schedule high-cost services, like gender-affirmation surgeries, with your deductible timeline in mind.

As you go through an SBC, look for out-patient surgery costs, behavioral health costs (such as therapy), and medication costs. There is no “right” or “wrong” plan, just plans that may better suit your needs.

Health insurance coverage examples

Health insurance terms can be confusing, so here are three examples of how they work together:

Eliot has recently had a medical emergency that cost a total of $10,500

Their insurance plan has a $200 premium, a $500 deductible, 30% coinsurance and a $2,500 out-of-pocket maximum.

Every month, Eliot pays $200 for their health plan.

For this medical emergency, Eliot will have to pay a $500 deductible before their insurance will cover any costs. The remaining $10,000 gets divided by the coinsurance, with Eliot being responsible for 30% of the cost, $3,000, and their insurance covering 70%,$7,000.

BUT, because Eliot’s out-of-pocket maximum is $2,500 and they’ve already paid the $500 deductible, they only need to pay $2,000 of their portion of coinsurance. Of the total $10,500 bill, Eliot will pay $2,500 and their insurance will cover $8,000.

Rose has also had a medical emergency that cost a total of $10,500

Her insurance plan has a $120 premium, a $2,000 deductible, 20% coinsurance and a $5,000 out-of-pocket maximum.

Rose pays $120 monthly for her health insurance.

For this bill, Rose will have to pay a $2,000 deductible before her insurance will cover any costs. The remaining $8,500 gets divided by the coinsurance, with Rose being responsible for 20% of the cost, $1,700, and her insurance covering 80%, $6,800.

Because Rose’s out-of-pocket maximum is $5,000 and she hasn’t reached that, Rose must pay the full coinsurance cost. Of the total $10,500 bill, Rose will pay $3,700, and their insurance will cover $6,800.

Casper has a $10,500 medical emergency after $2,500 in other medical costs

His insurance plan has a $100 premium, a $3,000 deductible, 40% coinsurance, and a $5,000 out-of-pocket maximum.

Casper pays $100 monthly for his health insurance.

Prior to this emergency, Casper had already spent $2,500 on other medical costs this year. For this bill, Casper will pay $500 to reach his deductible for the year. The remaining $10,000 gets divided by the coinsurance, with Casper responsible for 40%, $4,000, and his insurance covering 60%, $6,000.

BUT, because Casper’s out-of-pocket maximum is $5,000 and he’s already spent $3,000, he is only responsible for $2,000 of his portion of the coinsurance. For this bill, Casper will pay $2,500, and his insurance will cover $8,000.

Reaching out for support

You’re not alone in this process. Because of the pandemic, many transgender support groups have shifted to virtual settings. Lean on our community for support — we’re pretty cool people who have been where you are.