Trump's HHS abandons threat to withhold Medicare and Medicaid funding over trans care

Protestors rally for healthcare for transgender people at a march in June 2025 in Manhattan. NPR has learned the Trump administration shelved a plan to cut off all Medicare and Medicaid funding to any hospital that provided gender-affirming care to minors. Erik McGregor/LightRocket via Getty Images hide caption

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The Trump administration is abandoning its most aggressive attempt to end gender-affirming care for youth nationally, according to an official document obtained by NPR.

The document shows that the Department of Health and Human Services will not be finalizing a proposed rule that would have blocked all Medicaid and Medicare funding for hospitals that provide pediatric gender-affirming care.

The Centers for Medicare and Medicaid Services told NPR in a statement: "CMS does not comment on future rulemaking or speculate on potential actions. The Trump Administration rejects ideologically driven surgical interventions on vulnerable children."

(Surgery is very rare among transgender people under age 18, and the rule applied to all gender-affirming care, which is mainly therapy and medications for children.)

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A "victory" for trans rights, but not a "retreat" by HHS

The fact that the Trump administration is backing off from this action is "a victory for people who are defending the rights and interests of trans people," says Sam Bagenstos , a professor at Michigan Law who served as general counsel at HHS under the Biden administration. "But I don't think it indicates a more general retreat from the aggressive posture of the Trump administration."

Bagenstos notes that this type of leverage — a "conditions of participation" rule for the Medicare and Medicaid program — has historically been used by HHS to compel states and hospitals to meet basic health and safety standards. Things like "making sure that you have stockpiles of certain kinds of equipment, making sure that you have certain kinds of emergency protocols, making sure that you have certain staffing ratios," he explains.

The proposed rule was unprecedented, Bagenstos says, because it instead would have prohibited certain kinds of treatments for a certain population. He says it seemed unlawful in a variety of ways. For one, "it violates the Medicare Act, which says that Medicare and Medicaid can't be used to control the practice of medicine within the state — states get to regulate the practice of medicine," Bagenstos says.

Medical groups opposed the change

Normally, HHS would propose a rule, accept public comment for 60 days, and then finalize the rule so that it could take effect. In this case, after proposing the rule in December and receiving more than 30,000 comments , the administration is abandoning the rule. At least in the next year, it will not be finalized and will not take effect.

The American Medical Association and the Children's Hospital Association both submitted comments urging the agency to rescind or withdraw the proposed rule. Major U.S. medical groups say that puberty blockers and sex hormones are safe and can be effective for transgender young people.

Even so, gender-affirming care for youth is banned in 27 states after a flurry of laws passed over the last several years. In the remaining 23 states, many hospital clinics that offer gender-affirming care have continued to operate, while others have shuttered in the past year citing pressure from the Trump administration.

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That pressure has come in the form of this proposed rule, another rule that would bar federal Medicaid reimbursement for transgender pediatric patients, and a declaration from Health Secretary Robert F. Kennedy Jr. that aimed to redefine the standard of care. (Interestingly, the press release issued when those actions were unveiled in December is now missing from the HHS website, as is the Kennedy declaration document .)

The Medicaid rule is currently in the final stage of review and appears to be on track to take effect in the coming weeks. A coalition of Democratic-led states sued over the so-called Kennedy declaration and succeeded in blocking it in federal court in Oregon. The Trump administration has not appealed that decision so far.

Protesters who are against gender-affirming care for young people gathered outside Boston Children's Hospital in Sept. 2022. Carlin Stiehl for The Boston Globe/Getty Images hide caption

At the same time, the Department of Justice has issued administrative and criminal subpoenas to hospitals seeking full personal medical files for transgender youth and employment files for their medical providers, although many of those attempts have been blocked in court so far. The Trump administration has also reached settlements with hospitals in Texas and Ohio that involved establishing "detransition" clinics.

And last month, when the Supreme Court allowed states to bar young transgender girls from sports, the White House issued a press release saying that the decision "Bolsters President Trump's Push to Eliminate Transgender Insanity." The release listed actions targeting transgender people across the federal government, from passport markers to military service to research funding .

Will hospitals that ended care for trans youth restart it?

While the Trump administration does not appear to be backing down from anti-transgender actions broadly, its decision not to finalize its most aggressive healthcare rule is significant, says Katie Keith , director of the Health Policy and the Law Initiative at Georgetown University who also worked in the Biden administration. Those other efforts are not nearly as durable as a finalized rule that takes effect, she notes.

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The decision of the Trump administration not to finalize this rule "should give hospitals more confidence to either resume or continue offering the care," she says. Because the rule was never in effect, "I would argue that they should have been doing this all along anyway."

Kellan Baker agrees. He's a senior adviser for health policy at the Movement Advancement Project think tank, which focuses on LGBTQ issues. "This administration may have checked itself in one of the most extreme expressions of its agenda and I think people should take solace in that," he says. "But at the same time, this administration is continuing to show that its ultimate goal is eliminating health care for trans people and that it is apparently prepared to use almost any means necessary to do so."

The Medicare and Medicaid rule could theoretically be revived at some point, since it has not been formally withdrawn. An entry in the Trump administration's recent unified agenda sets a final action date for the proposed rule as December 2028, just before President Trump leaves office.