A current proposal by a federal agency has raised concerns that doctors may be punished for believing that there are only two genders, rooted in biological sex.

The proposed rule, issued by the U.S. Department of Health and Human Services, says that it is aimed at banning discrimination against transgender individuals under the Obama administration's Affordable Care Act. 

Section 1557 of the Affordable Care Act cites decades-old federal laws that prohibit any individual from being denied benefits or discriminated against in any health program or federally funded activity on the basis of race, color, nationality, sex, disability and age. 

However, the Office of Civil Rights is now interpreting "sex" to include "gender identity" and "sex stereotypes."

The consequences of this change could be wide-reaching. 

The proposed regulation defines "sex stereotypes," in part as "expectations that gender can only be constructed within two distinct opposite and disconnected forms (masculinity and femininity), and that gender cannot be constructed outside of this gender construct (individuals who identify as neither, both, or as a combination of male and female genders)."

Gender identity is defined as "an individual's internal sense of gender, which may be different from an individual's sex assigned at birth."

As a result, doctors and medical institutions could be penalized – or even forced out of business – if they are not willing to perform or facilitate sex reassignment surgeries and other "gender transition" treatments for individuals who identify as transsexual. 

Critics of the suggested regulation say that it is a radical proposal that could result in severe penalties for doctors who cannot in good conscience comply.

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Jonathan Scruggs, legal counsel with Alliance Defending Freedom, called the proposed regulation an "unparalleled overreach by bureaucrats who want to advance a specific agenda."

"Everyone knows that under Title IX, sex means biological sex," he told CNA. "HHS has exceeded its authority and is going against the intent of Congress."

"The government should not be in the business of trying to redefine sex," Scruggs said. "HHS is supposed to apply the law faithfully, not go beyond the terms of the law."

Roger Severino, director of the De Vos Center for Religion and Civil Society at The Heritage Foundation, questioned the impact that the rule could have on religious liberty and rights of conscience.

"(W)hat about an individual's moral convictions and religious freedom?" he asked. "Will they be respected and preserved?" 

Apart from religious beliefs, many doctors oppose sex reassignment surgeries for medical reasons. Statistics show that individuals who have these surgeries can face serious psychological consequences and are at a significantly higher risk of suicide.  

Once a pioneer in sex reassignment surgery, Johns Hopkins University has since ended the practice, finding that it was actually damaging to those who undergo it.  

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If finalized, the proposed regulation would be binding on all health insurers that offer plans under the Affordable Care Act, including those participating in health insurance exchange plans. 

The regulation would also apply to approximately 133,000 health care facilities, all state Medicaid programs, all private insurers that receive federal funding, as well as almost all physicians in the United States who accept some form of federal reimbursement.

Failure to comply could result in a loss of government funding and other legal penalties. 

"The authority for the government to revoke funds for health facilities and doctors that do not comply is vast," said Severino. "So many health facilities and doctors would be run out of business because their business model is based on government funding." 

"They would be hit very hard," he stressed. "Practically all of them would suffer millions of dollars in losses if their funding was cut." 

Doctors who refuse to conduct gender reassignment treatments and surgery because of their religious beliefs, personal convictions, or for other medical reasons could risk losing their job. 

"If a hospital is threatened with the loss of millions of funds, you would expect them to fire any person who does not comply," said Severino. "Hospitals will not want to be sued, so the easy way out is to fire anyone who disagrees with the mandate and jeopardizes their funding."  

"But therein lies the conflict," he continued. "This mandate threatens religious liberty because it forces individuals to choose between violating their conscience or risk losing government benefits or their job."  

Legal experts believe that legal challenges against the proposed regulation could be successful in the courts. 

 "It is unconstitutional for religious doctors and health facilities to be forced to violate their beliefs," said Scruggs. "No federal court has ever said that sex includes gender identity or sexual orientation."

"Individuals who refuse to comply with this mandate will have recourse under the First Amendment and under the Religious Freedom Restoration Act," he added. 

This is not the first time that the Affordable Care Act has stirred up controversy surrounding religious freedom.

In recent years, hundreds of plaintiffs have filed lawsuits against the federal contraception mandate, which was issued under the Affordable Care Act and requires employers to offer health insurance plans covering contraception, sterilization and some drugs that can cause early abortions.

The Supreme Court ruled against that mandate as it applies to closely-held for-profit companies in 2014. Another case involving numerous non-profits that object to the mandate on religious grounds will be heard by the court this year.

"The Obama administration is hostile to religious freedom," said Severino. "We have seen this with Hobby Lobby and the Little Sisters of the Poor."

"Now the administration is trying to advance a specific gender ideology that redefines what it means to be a man or a woman," he said. "This gender ideology will result in discriminating against people who believe that a person's biology is something to be respected rather than something that should be treated as a disease."

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