A three-judge panel of the U.S. Court of Appeals of the Fifth Circuit heard oral arguments in the federal government’s appeal of a U.S. District Court judge’s ruling invalidating Section 1557 of the Affordable Care Act (ACA), which bans healthcare discrimination. The case is Neese v. Becerra, case number 23-10078, U.S. Court of Appeals for the Fifth Circuit.

During oral arguments, the appellate panel appeared skeptical that two Texas doctors had standing to sue over a 2021 U.S. Department of Health and Human Services (HHS) notice interpreting the ACA. The doctors argued that they were at risk of enforcement action by HHS if they treated – or refused to treat – minor transgender patients. Nonetheless, as the government pointed out, a related notice of proposed rulemaking implementing Section 1557 provides that doctors can refuse to provide medical care on nondiscriminatory grounds.

The panel questioned how the HHS notice and proposed rule put the doctors at any credible risk of enforcement when treating minor transgender patients, noting that no HHS enforcement action has occurred. One panel member also pointed to a Texas state law that bans gender-affirming care in the state of Texas as further protecting the doctors from allegations of discrimination for refusing to treat minor transgender patients. Another panel member questioned how the doctors could bring a pre-enforcement challenge to a proposed rule that has not yet been finalized, which leaves the language in any final rule unclear.

The HHS notice states that the U.S. Supreme Court’s decision in Bostock v. Clayton County, which held that Title VII of the Civil Rights Act bars employment discrimination based on sexual orientation and gender identity, extends to healthcare treatment under Section 1557 of the ACA. In November 2022, the trial court judge set aside the HHS notice nationally and declared that Bostock did not apply to Section 1557 of the ACA.

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