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What North Carolina ACA marketplace plans will cover "sex-trait modification" in 2026
Executive Summary
The available analyses show that federal action finalized in 2025 will bar the use of federal ACA premium subsidies to pay for “sex‑trait modification” (gender‑affirming) procedures in plan year 2026, but that this restriction does not automatically mean no North Carolina marketplace plans will cover such care at all; insurers or state rules may still require or offer coverage without federal funds [1] [2]. Legal and state‑level developments in 2024–2025, including court decisions and insurer policies, create a fragmented picture: coverage in North Carolina in 2026 will depend on a mix of the federal subsidy ban, insurer medical‑policy choices, state mandates or prohibitions, and ongoing litigation [3] [4].
1. Federal Rule Clears the Path — Subsidies Can’t Fund These Procedures, but Coverage Isn’t Fully Banned
The Centers for Medicare & Medicaid Services finalized a rule in mid‑2025 that explicitly prohibits using federal premium tax credits and cost‑sharing reductions to cover sex‑trait modification procedures in ACA marketplace plans beginning in plan year 2026, framing the change as part of a broader Marketplace Integrity and Affordability package intended to lower premiums and address enrollment integrity [1]. The rule’s immediate legal effect is on federal subsidy dollars, not a categorical, across‑the‑board ban on plans offering gender‑affirming services. Insurers could still design plans that cover surgical or pharmaceutical gender‑affirming care so long as those costs are not subsidized by federal funds, or states could step in to mandate or fund coverage — a distinction central to how North Carolina enrollees will experience changes [2] [3].
2. Insurer Medical Policies Show Some Coverage — But Private Choices Vary by Company
Several major insurers with operations or products in North Carolina maintain medical‑policy frameworks that allow gender‑affirming procedures under defined clinical criteria, including requirements for assessments, hormone therapy duration, and documentation of persistent gender dysphoria; UnitedHealthcare’s North Carolina Community Plan policy (effective March 1, 2025) and Blue Cross Blue Shield of North Carolina’s policy (updated September 2023) are examples showing insurer‑level processes for approving surgeries and related care [5] [6]. These policies indicate that, independent of federal subsidy rules, some marketplace plans sold in North Carolina could continue covering sex‑trait modification if the issuer chooses, subject to policy criteria and cost‑allocation decisions — but coverage will vary significantly across issuers and plan types [5].
3. State Law and Court Rulings Create Conflicting Signals for North Carolina Consumers
North Carolina’s legal landscape complicates the picture: state actions and recent appellate decisions affect government plans and may influence private market behavior. A 2025 appeals court reinstated a long‑standing exclusion for transition‑related treatments in the North Carolina State Health Plan, leaving psychotherapy but excluding many medical transition services; while that ruling applies directly to the State Health Plan, it signals a legal climate that could pressure private insurers or state regulators to limit coverage [4]. Separately, analyses indicate North Carolina is among states with statutory bans or restrictions affecting gender‑affirming care, and federal executive actions and guidance targeting pediatric care and EHB design further muddy whether marketplace plans will maintain broad coverage in 2026 [7] [2].
4. Practical Impact: Higher Out‑of‑Pocket Costs and Coverage Fragmentation Likely
Taken together, the federal subsidy prohibition, insurer discretion, and state legal environment predict a likely outcome of fragmented access and potentially higher out‑of‑pocket costs for North Carolina consumers seeking gender‑affirming care in 2026. If issuers remove services from EHBs or reclassify benefits to avoid using federal funds, enrollees without state protections or employer coverage could face denied claims or the full cash price. Analysts warn that such changes may particularly burden low‑income individuals for whom marketplace subsidies and cost‑sharing reductions were critical to affordability, producing both financial and access consequences [2] [3].
5. Open Questions and What to Watch Next for North Carolina Enrollees
Key unresolved issues will determine actual coverage on the 2026 exchange: whether North Carolina’s state regulators adopt or require EHB benchmark changes, whether private issuers elect to keep coverage while absorbing or shifting costs away from federal subsidies, and the outcomes of ongoing litigation challenging federal and state rules. Monitoring insurer plan documents and state regulatory filings for the 2026 plan year will reveal which carriers explicitly include or exclude gender‑affirming services and how costs are allocated. Consumers should examine issuer medical‑policy documents and plan benefit summaries closely — the presence or absence of federal subsidy funding is only one piece of a multifaceted, rapidly evolving policy and legal landscape [1] [5] [7].