Civil rights protection for transgender people—and in particular access to affordable health care—is currently the subject of intense political scrutiny, with a hostile administration chipping away at legal protections. Among other setbacks, a federal district court enjoined regulatory guidelines that were issued in 2016 to clarify that the federal prohibition on sex discrimination in health insurance applies to discrimination on the basis of gender identity and transgender status, and the promulgating agency itself is now reconsidering the guidelines. Without explicit federal protections against discrimination by health insurers and in the face of uneven state law protections, the ability to deduct costs associated with gender transition-related health care that are not covered by insurance on one’s personal income taxes has taken on new significance for the transgender population. This article takes a new look at the 2010 decision of the United States Tax Court in O’Donnabhain v. Commissioner of Internal Revenue, in which the Court held that a transgender taxpayer could deduct certain transition-related medical expenses on her federal income tax return, but not others. This article argues that, while the O’Donnabhain decision may legitimize transition-related treatments as medically appropriate in the insurance context, the Court overreached by considering whether the costs at issue were “medically necessary” and “widely accepted” in the medical community, requirements that the federal tax code does not impose. In so doing, the decision risks imposing an unwarranted burden of proof on transgender people and potentially on other marginalized populations. This article explores the implications of the O’Donnabhain decision for transgender health care in the current political and legal climate, and explores strategies to protect health care rights for transgender people and other marginalized communities, with a focus on the medical deduction for individual federal income taxes.
Julie Furr Youngman and Courtney D. Hauck, Medical Necessity: A Higher Hurdle for Marginalized Taxpayers?, 51 Loy. L.A. Rev. 1 (2018).