Two developments in Oregon this month affect how the state pays for and oversees puberty blockers, opposite-sex hormones and related surgeries.
Background: the federal funding rule
A Centers for Medicare & Medicaid Services rule, CMS-2451-F, takes effect October 13, 2026. It prohibits federal Medicaid funding for these procedures for patients under 18 and federal CHIP funding for patients under 19. Children already receiving opposite-sex hormones may be tapered off with federal funds for up to six months. Mental health services remain covered, and states may continue coverage with their own funds.
Oregon's response: state-only funds
The Oregon Health Authority (OHA) says about 600 Oregon Health Plan members under 18 receive services affected by the rule, and that their coverage will not change. Beginning October 13, OHA will pay for the affected drugs and surgeries directly with state-only funds through its fee-for-service (Open Card) program. Regional Medicaid insurers, called coordinated care organizations, remain responsible for office visits, labs and care coordination. OHA plans to request a budget adjustment from lawmakers next year.
OHA cites House Bill 2002 (2023), which requires coverage of these treatments.
Delayed insurer exams
HB 2002 directs the Department of Consumer and Business Services (DCBS) to examine every insurer subject to the law for compliance by January 2027, and to report to lawmakers by December 31, 2026. Those exams have been delayed, the Oregon Capital Chronicle reported.
A spokesperson for the DCBS Division of Financial Regulation, Jason Horton, said the exams would require "detailed carrier, provider and individual claims information," and that "an exam by this date could put Oregonians' private health information at risk." He said the law's coverage requirements remain in effect and the work will resume when "it can be done confidently without putting patients and providers at risk."
OHA has also set aside a 2024 effort to measure provider availability among its coordinated care organizations, citing financial strain and federal Medicaid changes. It says it plans to renew the request "as workloads permit."
How other states compare
- California is also continuing coverage with state funds.
- Virginia will end coverage for minors on October 13, with a six-month taper.
- Colorado will suspend coverage.
Legal challenge
Oregon is among 20 states, the District of Columbia and the governor of Pennsylvania that sued HHS and CMS on September 2, 2026, in federal court in Massachusetts. As of October 12, no court had blocked the rule.