The Trump administration has finalized a new policy prohibiting federal funds from being used for gender-affirming medical care for children enrolled in Medicaid or the Children's Health Insurance Program (CHIP). The rule, published Tuesday, affects federal spending for minors seeking procedures related to gender transition. Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services (CMS), stated the agency's reasoning in a social media video, citing concerns over serious harms and weak evidence regarding what he termed "sex-rejecting procedures."
This policy follows a proposal first introduced in December. Over the last several years, 25 states have passed laws limiting youth access to gender-affirming care. The administration also released a report titled "Wolves in White Coats" and a corresponding documentary that allege fraudulent billing practices and greed among health care providers. Officials cited this report while referring dozens of providers to the Department of Justice and the Department of Health and Human Services (HHS) inspector general for investigation.
Georgetown University's Center for Health Policy and the Law director Katie Keith stated she is unaware of prior instances where the federal government prohibited funds for a specific patient population with a particular diagnosis. While the federal government will no longer provide funding, the rule does not strictly ban the care if states choose to use their own budgets to cover the costs. California has already budgeted millions of dollars to maintain access for families in that state, though other states have not yet clarified how they will respond.
For an individual household, the impact depends on state-level decisions. In states that do not choose to "backfill" the lost federal dollars, families would notice a change in their medical bills or a loss of coverage for specific prescriptions and procedures previously covered by Medicaid. This change is occurring alongside a broader trend; in 2023 alone, the number of states with laws limiting access to such care rose from three to 22. Experts like Lindsey Dawson of KFF note that the administration’s rhetoric and policy moves have already led some hospitals to end their gender programs due to fear of investigation rather than changes in medical best practices.
The policy sets a precedent for federal intervention in Medicaid coverage for specific diagnoses. Legal challenges are expected from advocacy groups and Democratic-led states. Jennifer Levi, an attorney at GLAD Law, noted that the administration is already defending nine or ten related cases in court. While California has allocated funds to prevent care interruptions, the effective date of the new rule will force other state legislatures to decide whether to find new revenue sources or allow the coverage to lapse. President Trump, in a Truth Social post, noted the rule was issued at his direction and encouraged voters to consider the policy during the November midterm elections.