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San Francisco Transgender Benefit: Total Claims Experience and Plan Evolution, By Year (2001-2006)

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 late April of 2001, San Francisco's Board of Supervisors voted 9-2 to cover transition-related surgeries, and pilot coverage began July 1, 2001 through the city's self-funded "City Plan" — a preferred provider organization (PPO) plan administered by Beech Street Corporation. Health maintenance organization (HMO) plan coverage was delayed until after the pilot year, and was ultimately implemented in July 2004.

2001 Transgender Benefit

Covered services included genital reconstruction and chest reconstruction for FTM. Following the recommendations of its actuaries, the following restrictions were placed specifically on the transgender benefit:

  • Deductible of $250, after which out of pocket co-payments were required for services: 15% when provided by an in-network health care provider, 50 percent if out-of-network.
  • Lifetime cap of $50,000 per person.
  • Surcharge of $1.70 per participant per month.
  • Eligibility was limited to employees, retirees or dependents who were members of the San Francisco Health Service System (i.e., the member of any San Francisco health plan) for more than one year.

2004-2005: Three years of low utilization prompts changes

By 2004, three years after implementation, San Francisco had:

  • Collected $4.3 million in surcharges from approximately 70,000 enrollees to offset projected claims
  • Paid only $156,000 on 7 received and processed claims.

The number of individual claimants is unknown but can be no more than 7, far short of the 105 projected by the actuaries. Whether any individual claimant actually reached the $50,000 maximum is also unknown. However, only three individuals could have reached their maximum in this period.

As a result, the Human Rights Commission advocated changing the plan structure, removing unnecessary limitations to improve access to care. In 2004, San Francisco modified its transgender benefit:

  • Raised the lifetime cap to $75,000 to comply with the California State Department of Managed Care (that controls California HMOs) rules that mandated that equal benefits be provided to both female-to-male and male-to-female transsexuals (the initial cap was placed between estimates for costs of male-to-female and female-to-male transitions).
  • Lowered the City Plan (PPO) surcharge to $0.50 per month (despite clear evidence that costs were well below either of these).
  • Removed the one year membership eligibility requirement.
  • Began HMO coverage through Health Net, Kaiser Permanente and Blue Shield of California began on July 1, 2004 after receiving required authorization from the California State Department of Managed Care (this process was originally to have been completed by year two and was finally implemented in 2004). Initial HMO coverage included a surcharge of $1.16 per participant per month.

2006: continued low utilization prompts further changes

By 2006, five years after implementation, San Francisco had:

  • Collected $5.6 million in surcharges to offset the cost of surgeries for a predicted 210 claimants.
  • Paid only $383,118 on 37 surgical claims.

In July 2006 further changes were made:

  • Dropped per participant surcharges entirely — from $1.16 per month for HMO coverage and $0.50 for PPO coverage to $0.00 per month.

Current Coverage

Employees of the City and County of San Francisco and those employees' dependents may now access treatments related to transgender transition and sex reassignment:

  • Plan members pay no additional premiums, as they did the first few years the program was available.
  • Coverage available on all of the health plans available to employees, retirees and their dependents.
  • Deductible of $250, after which out of pocket co-payments were required for services: 15% when provided by an in-network health care provider, 50 percent if out-of-network.
  • Lifetime cap of $75,000 for coverage of transition-related surgeries.
  • No additional surcharges for members (employees and retirees) or enrollees (members and their dependents).
  • Travel may be covered by most plans, including lodging and food expenses, if specialists are at a distance.

Based on the total claims experience described above, as well as some additional aggregate data about the number of claims, we can make some determinations about the actual cost and utilization rates for San Francisco from 2001-2006.