Attorney General William Tong is leading a coalition of 22 states in a lawsuit challenging a federal rule prohibiting the use of Medicaid funds for gender-affirming care for low-income transgender minors and some young adults.
The lawsuit argues that since the creation of Medicaid and the Children's Health Insurance Program (CHIP) in the 1960s, Congress has granted states authority to determine covered services under their programs, subject only to statutory limits. The coalition contends the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) are excluding medically necessary services from federal reimbursement specifically when provided to low-income transgender adolescents, based on CMS's own determination rather than statutory authority.
Tong said, "Once again, Trump is trying to replace the professional medical advice of doctors and the personal choices of patients with his own MAGA political priorities, and abusing our tax dollars and federal healthcare programs to bully everyone into submission. His actions are cruel and illegal, and we have sued and already secured multiple federal court orders to stop him, including blocking his threat to withhold Medicare and Medicaid to hospitals and clinics providing gender-affirming care and his efforts to erase gender-affirming care from Affordable Care Act protections."
HHS proposed the rule in December 2025, prohibiting federal reimbursement for gender-affirming care for Medicaid beneficiaries under 18 and CHIP beneficiaries under 19, while continuing to cover the same treatments for non-transgender youth. HHS received more than 30,000 comments on the proposal, with more than 90% opposed, including comments from Tong and a coalition of state attorneys general. HHS finalized the rule this month, with an effective date of October 13, 2026.
The coalition argues the rule sets a precedent allowing the executive branch to replace individualized medical judgments with a categorical reimbursement prohibition without congressional authorization, violating the Administrative Procedure Act and the Spending Clause of the U.S. Constitution.
Tong is pursuing litigation on multiple fronts related to gender-affirming care access, including prior lawsuits that secured federal court orders blocking threatened withholding of Medicare and Medicaid funds from providers and challenging efforts to remove gender-affirming care protections from the Affordable Care Act.
