An Iowa appeals court dismissed a lawsuit challenging a state law passed last year that does not require Medicaid to pay for sex reassignment surgeries for transgender residents.

The Iowa Court of Appeals in its ruling posted Wednesday agreed with a lower court finding that the legal challenge was speculative because the two transgender residents who sued – Mika Covington and Aiden Vasquez – had not yet been denied Medicaid coverage for surgeries.

“Covington and Vasquez have not requested Medicaid pre-authorization, their Medicaid providers have not evaluated the request, and no notice of decision had been issued. The district court determined that until their Medicaid providers deny them coverage, the controversy is purely abstract because they have not been adversely affected in a concrete way. We agree,” the court said.

The American Civil Liberties Union of Iowa filed the lawsuit in May 2019 for Covington and Vasquez, who qualify for Medicaid. The lawsuit claimed the law violated the inalienable rights to liberty, safety and happiness and equal protection sections of the Iowa Constitution.

The court ruling allows the law to stand, meaning Medicaid providers can deny coverage of sex reassignment surgeries.

ACLU of Iowa Legal Director Rita Bettis Austen said in a statement Thursday that she was reviewing the ruling.

“This important fight is not over for us,” she said.

Conservative Republicans in the Legislature passed the measure as part of a last minute addition to a human services budget bill in response to an Iowa Supreme Court ruling in March 2019. The court said the Iowa Department of Human Services could not block Medicaid from paying for sex reassignment surgery for two transgender women whose doctors recommended the procedure.

Republicans said the legislation they passed clarified that Iowa’s Civil Rights Act does not require taxpayer dollars to pay for sex reassignment and other similar surgeries.