A former Nebraska government employee sued the state Wednesday over its refusal to pay for her doctor-approved gender transition surgery.

Kadence Krei, 24, who began the transition from man to woman in 2016, said the surgery refusal was just part of the discrimination she suffered while working at the Beatrice State Developmental Center for nine months, from May 2018 until she resigned in early February.

Nebraska does not cover gender reassignment medications and surgeries but about 20 states, including Colorado and Minnesota, do. After the Iowa Supreme Court declared such bans on gender reassignment health care coverage unconstitutional, state legislators passed a law this year that allowed Iowa governmental entities to decide whether to deny gender-reassignment treatment. That new law is the subject of a lawsuit filed by the Iowa chapter of the American Civil Liberties Union — and a judge is expected to rule on it soon.

Nebraska’s insurance carrier, United Health Care, agrees that the medical profession has concluded that such procedures are “medically necessary” to treat gender dysphoria, the psychological condition of some who seek to transition from one gender to another, according to the lawsuit. However, United Health Care told Krei that “while (the surgery) may be medically necessary,” Nebraska “specifically excludes coverage for services or drugs related to gender transformations.”

The state has 30 days to respond to the lawsuit. A spokeswoman for the Nebraska Attorney General’s Office did not return a phone call Wednesday.

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According to the federal lawsuit, filed by attorney Susan Napolitano of Lincoln:

Krei has been living as a female and began using hormones in 2016. In May 2018, she was hired to work at the Beatrice facility, which serves people with developmental disabilities.

Krei has been diagnosed with gender dysphoria, the diagnosis for the “clinically significant emotional and psychological distress experienced as a result of the incongruence of one’s gender with their assigned sex and the physiological developments associated with that sex.”

“If untreated ... (gender dysphoria) can result in clinically significant psychological distress, dysfunction, debilitating depression,” Napolitano wrote in the lawsuit.

In 2018, after referrals from her primary care physician, surgeon and psychologist, Krei sought pre-authorization for a vaginoplasty — the construction of a vagina.

United Health Care denied her request, noting that Nebraska specifically excludes coverage for gender reassignment procedures.

Throughout her tenure in Beatrice, Krei said her supervisor and co-workers referred to her by the pronouns “he” or “him”. They refused to stop referring to her by those pronouns, even after she complained. Krei arrived to an office holiday party at the end of 2018 to find that bosses had put up decorative candy canes with the employees’ names on them — and hers was by her birth name, Kalem.

Such use of a birth name over the person’s preferred name is referred to as “deadnaming” in the transgender community.

When Krei addressed her concern over the “deadnaming,” she alleges, a supervisor said the state was required to use her official government name.

“Due to this treatment, I felt compelled to resign,” wrote Krei, who now lives in South Carolina.

“Krei ... (found) the discrimination to be overwhelming, intolerable and damaging to her mental and physical health,” Napolitano wrote. “The Nebraska plan’s discriminatory exclusion lacks any rational basis and is grounded in sex stereotypes, discomfort with gender nonconformity, ignorance of science, and moral disapproval of people who are transgender. ... This is discrimination based on sex.”

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Reporter - Courts

Todd Cooper covers courts, lawyers, trials, legal issues, the justice system and government wrongdoing for The World-Herald. Follow him on Twitter @CooperonCourts. Phone: 402-444-1275.

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