Feds: Insurers can't discriminate on LGBT Obamacare coverage

Insurers and hospitals can't discriminate against patients because of their gender identity under the Affordable Care Act, federal officials said Friday, but patient groups complained the rule doesn't go far enough.

The Department of Health and Human Services finalized a rule that prohibited discrimination in health care based on a long list of characteristics ranging from race to pregnancy, gender identity and "sex stereotyping."

It doesn't mean insurers have to cover all treatments associated with gender transitioning but they just can't outright deny them either. But the rule doesn't go far enough in clarifying what is discrimination, some say.

"We are disappointed that HHS did not do a better job at specifically defining discrimination in plan benefit design," Carl Schmid, who heads The AIDS Institute and represents the I Am Essential coalition of 197 patient groups, said in a statement. "Some insurance plans are finding ways to discriminate against patients, particularly those with chronic and serious health conditions."

The new rule came on the same day as the Education Department issued guidance to schools, telling that if they have sex-segregated activities and facilities, transgender students have to be able to participate according to their gender identity.

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The move also comes as transgender bathroom use pits North Carolina against the Justice Department over its law requiring people to use the bathrooms that correspond with the gender on their birth certificates. And it follows Republican presidential candidate Donald Trump's announcement that Caitlyn Jenner could use any bathroom she wants in the building he owns.

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On health care, Schmid said existing practices should be "defined and clearly prohibited," but he said the groups are pleased HHS said it will review discriminatory practices on a case by case basis."

The law applies to health insurers, hospitals, and health plans administered by or receiving federal funds from HHS.