Which states require marketplace plans to cover transgender health care including surgery?

1. States that say “yes”: five benchmark plans that mandate surgery coverage

Multiple reputable analyses identify California, Colorado, New Mexico, Vermont, and Washington as states that have explicitly required coverage for treatment of gender dysphoria—including surgical procedures—in their EHB benchmark plans, effectively obligating individual and small‑group marketplace plans that follow those benchmarks to cover those services unless federal law preempts them. These benchmarks drive what insurers must offer in a state’s marketplaces; when a state’s benchmark plan lists gender‑affirming services, insurers that use that benchmark generally must include comparable benefits in marketplace policies. Analysts note that the magnitude of fiscal impact on premiums is projected to be very small—for example, Colorado’s update showed a 0.04% estimated cost effect—so the requirement has been framed by advocates and some state officials as administratively and financially manageable ^[1].

2. Federal rule change that complicates the picture for plan year 2026

The Department of Health and Human Services issued a final rule excluding “sex‑trait modification procedures” from the ACA’s list of essential health benefits beginning in plan year 2026. That regulatory change means the federal baseline no longer requires marketplace plans to cover those procedures, placing pressure on states that previously mandated them via benchmark plans. Five explicit state mandates now face a new federal standard that could require states to defray costs if they choose to keep those benefits in their marketplaces; several analyses emphasize operational complexity as insurers and regulators parse what procedures are excluded versus those that qualify as medically necessary for other conditions ^[1].

3. Legal fights: 21 states sued and constitutional questions loom

The rule’s implementation has provoked litigation: 21 states filed suit seeking to block the exclusion, arguing the rule was procedurally and substantively flawed. The lawsuit frames the issue as an Administrative Procedure Act challenge and questions the evidentiary basis and departure from prior policy. Court outcomes will directly influence whether state benchmark mandates survive as enforceable obligations for marketplace plans, and could determine whether HHS’s exclusion stands or is enjoined. Meanwhile, separate legal contexts—such as claims under the ACA’s nondiscrimination provisions or state civil rights laws—remain active avenues for challengers and claimants seeking coverage when insurers deny gender‑affirming treatment ^{[1] [2]}.

4. Patchwork reality: protections, prohibitions, and Medicaid interplay

Beyond those five states, coverage is highly variable: a majority of states have some protections against categorical exclusions, but others have active bans or restrictions. Movement Advancement Project data indicate that many transgender people live in states that prohibit insurance exclusions or include gender‑affirming care in state employee plans, yet other states have enacted Medicaid restrictions or bans on gender‑affirming care for certain populations. For example, analyses report ten states with Medicaid policies that prohibit gender‑affirming care for all ages, and separate state‑level legislative efforts have aimed to restrict private coverage or public funding. This produces a patchwork in which marketplace access depends on state law, insurer practice, and evolving federal rules ^{[3] [4] [5]}.

5. Practical effects for consumers and insurers: appeals, prior authorization, and cost signals

Even where state benchmarks or insurer policies cover gender‑affirming surgery, coverage details vary: plans frequently require prior authorization, impose step therapy-like protocols, or limit covered procedures. Consumers denied coverage may rely on internal appeals, external review, or federal nondiscrimination protections under the ACA, but the strength of those remedies is subject to changing administrative guidance and court rulings. Experts assessing state benchmark changes have underscored that actuarial cost impacts for including gender‑affirming services are typically minimal, but operational burdens—coding, provider networks, and claims adjudication—are nontrivial and shape insurer responses ^{[6] [2] [1]}.

6. Bottom line: limited set of states mandate surgery coverage today; future uncertain

The precise factual answer is that five states have explicitly required marketplace benchmark plans to include gender‑affirming treatment, including surgery, but the landscape is in flux because of a new federal exclusion effective plan year 2026 and ongoing litigation by 21 states. For consumers, this means coverage in some states is explicit and enforceable today while in many other states coverage depends on insurer policy, state law, and future court or administrative rulings. Stakeholders are polarized—advocacy groups stress access and nondiscrimination, while some state governments and litigants argue for regulatory change—so the ultimate nationwide picture will turn on the pending legal challenges and any subsequent regulatory adjustments ^{[1] [2]}.