The Centers for Medicare and Medicaid Services announced last week that federal funding could no longer be used to pay for gender-affirming care through Medicaid or the Children’s Health Insurance Program.

The rule prohibits federal Medicaid dollars from covering puberty blockers, hormone therapy, and rare instances of surgery for enrollees under the age of 18 in the Medicaid program and under the age of 19 in CHIP. It does not prohibit coverage of counseling or psychotherapy as part of gender-affirming care.

The decision to restrict what healthcare is covered by federal dollars is part of a longer, more aggressive stance the Trump-Vance administration is taking toward LGBTQ healthcare.

Since taking the White House back for his second term, Trump has signed three executive orders that directly target transgender Americans. They include Executive Order 14168, “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government” that requires the federal government to recognize only a person’s sex at birth, not their gender identity; Executive Order 14183, “Prioritizing Military Excellence and Readiness,” which attempts to remove transgender service members from the military and prevent them from enrolling; and an executive order that helped spur this change by restricting gender-affirming care.

The administration’s choice to villainize gender-affirming care, despite it being considered a best medical practice recommended by nearly every major medical group for gender dysphoria or gender incongruence, including the American Medical Association, American Academy of Pediatrics, and American Psychological Association, comes as KFF, a source for health policy research and polling data, estimates about 130,000 young trans people with Medicaid or CHIP coverage could be impacted by the policy.

“Today, we are ending federal taxpayer funding for sex-rejecting procedures on children,” U.S. Department of Health and Human Services Secretary Robert F. Kennedy, Jr., said last week when announcing the change. “These interventions carry serious risks and can cause irreversible harm. The federal government will no longer use Medicaid and CHIP dollars to fund procedures that fail to meet the evidentiary standard our children deserve.”

“Children deserve our protection, not experimental interventions that pose serious risks and convey no proven benefits,” said CMS Administrator Mehmet Oz. “By cutting off federal funds for these sex-rejecting procedures, we’re following the science, saving taxpayer dollars, and, most importantly, protecting children from potentially irreversible harm so they can truly flourish.”

The administration’s push is having a chilling effect on state healthcare legislation — more states now prohibit gender-affirming care than ever before. States with gender-affirming care restrictions jumped from four in 2023 to 27 states today.

The funding change has been met with fierce pushback from LGBTQ advocates, health experts, and government officials across the country before the rule goes into effect.

Some of the first actions against this policy began in July 2025.

Twenty-one states have attempted to restrict this effort in some fashion from going through as the White House intends. They include Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maryland, Massachusetts, Maine, Michigan, Minnesota, Nevada, New Mexico, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington, and Wisconsin, as well as Pennsylvania Gov. Josh Shapiro on behalf of his state.

The coalition of attorneys general filed lawsuits challenging nine separate provisions of the final rule, arguing that they would make it harder for consumers to get coverage through the ACA, increase costs for states, and weaken key ACA protections.

The U.S. District Court for the District of Massachusetts on Aug. 15 struck down a key provision of a Trump-Vance administration final rule that would have excluded coverage of certain types of gender-affirming care as essential health benefits under the Affordable Care Act. Essential health benefits are subject to the ACA’s financial protections, including limits on out-of-pocket costs.

“Everyone deserves access to health coverage,” said California Attorney General Rob Bonta. “The Trump administration tried to exclude gender-affirming care from qualifying as an essential health benefit. We fought back, and the court’s ruling means this care can — and in many states must — qualify for the ACA’s financial protections, ensuring transgender people have an equal opportunity to benefit from the ACA.”

“The Trump administration tried to make essential care unaffordable for transgender Marylanders by stripping it out of the ACA’s cost protections,” said Maryland Attorney General Anthony Brown. “We fought to keep that care covered, and we won. My Office will always defend Marylanders’ right to the care they need.”

The final rule at issue — the “Marketplace Integrity and Affordability” rule — was proposed by the Trump-Vance administration in March 2025, purportedly to “curb ACA enrollment fraud” and reduce federal spending on subsidies that help consumers afford ACA coverage. Among other changes, the rule would have removed certain types of gender-affirming care from the ACA’s 10 essential health benefit categories.

“This president would rather target young people than lower costs or expand access to health care. It is reprehensible that our federal government is intent on hurting and isolating the adolescents it is supposed to protect. I will use every tool at my disposal to fight this proposal and protect transgender Americans and their families,” said New York Attorney General Letitia James in December after the policy was announced.

In addition to state government resistance to the change, multiple LGBTQ advocates have committed to protecting the right to healthcare for LGBTQ children.

Rocky Mountain Equality CEO Mardi Moore affirmed those in Colorado would continue to help people most at risk if the change goes through.

“First, to the families impacted by this news: you will not be cut off immediately. The rule takes effect Oct. 13, 2026, and providers can continue to bill Medicaid and CHIP for youth already receiving gender-affirming care for up to six months after that. Rocky Mountain Equality is here, and we can help you understand your options to continue your child’s care.

“This is discrimination dressed up as rule-making. Government healthcare policy should expand what people can access, not strip away care that families and doctors have already determined is medically necessary,” Moore added. “We’ve seen this pattern before with other kinds of essential care, and it rarely stops with just one restriction. Any effort to ban or limit care opens the door for more restrictions on more kinds of care.”

The Human Rights Campaign, the largest LGBTQ lobbying group in the U.S., issued multiple statements following the announcement, and has filed a similar lawsuit against the federal government for prohibiting gender-affirming care to federal employees using federal health plans.

HRC President Kelley Robinson said taking a hard stance against what the administration is presenting as a win for the American people that will ultimately restrict healthcare options for thousands of Americans.

“Every young person is entitled to the health care that they, their parents, and their medical providers agree that they need, without politicians interfering with these important and highly personal decisions. And yet, rather than working to make healthcare more affordable and accessible, the Trump administration continues to obsess over the healthcare needs of trans youth, this time by cutting off health insurance coverage for those who rely on Medicaid and CHIP to access that care,” Robinson said. “The Trump administration is terrorizing trans youth and their families with these kinds of actions, and it has to stop.”