HHS proposed barring Medicare and Medicaid funding from hospitals providing gender-affirming care to minors

On December 19, 2025, the U.S. Department of Health and Human Services and the Centers for Medicare & Medicaid Services published two proposed rules that would prohibit hospitals participating in Medicare and Medicaid from providing gender-affirming care — described in the rules as "sex-rejecting procedures" — to patients under 18 [1, 2]. Because the prohibition was written as a hospital condition of participation, a facility that continued to offer such care to minors would have risked losing its eligibility for all Medicare and Medicaid reimbursement, not only payment for the care in question [1]. A companion rule separately barred federal Medicaid and Children's Health Insurance Program dollars from funding the care [2].

Health Secretary Robert F. Kennedy Jr. issued a declaration asserting a federal standard of care for transgender youth and urged providers to update their treatment protocols accordingly [1]. The proposals set a public comment deadline of February 17, 2026, and drew more than 30,000 comments, including formal opposition from the American Medical Association and the Children's Hospital Association, both of which urged the agency to withdraw them [3].

Updates

2026-07-13 — HHS declined to finalize the funding threat [3]

On July 13, 2026, NPR reported that HHS would not finalize the proposed rules, abandoning the threat to withhold Medicare and Medicaid funding from hospitals providing gender-affirming care to minors; the agency's press release and Secretary Kennedy's declaration were removed from the HHS website. Legal scholars and advocates cautioned that the retreat did not signal a broader reversal of the administration's efforts to restrict transgender health care [3].

2026-08-11 — CMS finalized Medicaid, CHIP funding ban for gender-affirming care for minors [4, 5]

CMS Administrator Dr. Mehmet Oz announced that the companion Medicaid/CHIP rule [2] — distinct from the hospital condition-of-participation rule HHS declined to finalize [3] — had been finalized, ending federal Medicaid funding for gender-affirming surgeries and hormone treatments for transgender minors and barring CHIP from covering the treatments for people under 19, effective October 13, 2026 [4]. Coverage for minors already receiving hormone treatment phases out by April 2027; mental health treatment for transgender minors remains covered [4]. President Trump said he had directed Oz to make the change, calling the procedures "barbaric surgeries and practices" [5].