A federal rule ending federal Medicaid and CHIP funding for puberty blockers, cross-sex hormones and related surgeries for minors took effect today. Several states that previously covered these services have ended coverage.
States ending coverage
- Virginia: Coverage ends for Medicaid members under 18 and CHIP members under 19, apart from the six-month federally funded taper. (Virginia DMAS)
- Arizona: AHCCCS's pharmacy prior authorization criteria list puberty blockers and cross-sex hormones for patients under 19 as a benefit exclusion. Arizona Medicaid already excluded sex-change surgery. Treatment started on or before October 13 is grandfathered for six months. (AHCCCS pharmacy prior authorization criteria)
- Montana: Puberty blockers, cross-sex hormones and surgery are no longer covered under 18 (CHIP under 19). Patients already on cross-sex hormones may taper through April 13, 2027. (Montana DPHHS) Montana's 2023 law, SB 99, would ban these procedures for minors and prohibit public funding for them. A state district court blocked it before it took effect, and the Montana Supreme Court upheld that preliminary injunction on December 11, 2024, so Montana Medicaid coverage continued until the federal rule took effect. (Montana Free Press, Montana Supreme Court opinion)
- Colorado: Coverage is suspended pending legislative authority. The legislature next meets in January. Colorado spent just under $1.3 million on these services for under-19s in fiscal 2024–25, about $700,000 of it federal. From 2019 to 2025 it spent $7.1 million, including $4.2 million federal. (Colorado Sun)
Virginia and Colorado are plaintiffs in the multistate lawsuit challenging the rule, and both have ended or suspended coverage while the case proceeds. (complaint)
About 27 states restrict these procedures for minors, and their Medicaid programs did not cover them before the rule.
Background: the federal rule
CMS-2451-F, published August 13, 2026, took effect October 13, 2026. It prohibits federal Medicaid funding for these procedures for patients under 18, and federal CHIP funding for patients under 19. Patients already taking cross-sex hormones may receive federally funded doses for up to six months. That taper does not apply to puberty blockers or surgery. Mental health services remain covered, and states may continue coverage with their own funds. (Federal Register)
States continuing coverage with state funds
- California: Medi-Cal no longer pays for these services for minors. Payment instead comes through a state-only grant program run by HCAI, a separate state agency. The state says this funding will not be available immediately on October 13. (HCAI)
- Oregon: About 600 Oregon Health Plan members under 18 are affected. The state pays for the affected drugs and surgeries directly through its fee-for-service program. (Oregon Capital Chronicle) (Oregon Health Authority)
- Washington: The Health Care Authority will cover the affected services, which it describes as "certain surgical and hormonal interventions," with state-only funds (notice dated Oct 8). (HCA notice)
- New York: Department of Health guidance dated Oct 2 says puberty blockers, cross-sex hormones and surgical interventions will be covered by state-only funding. (NY DOH)
- Massachusetts: Coverage is funded from the state's $8.5 million Affirming Health Care Trust. About 550 MassHealth members aged 18 and under received hormones or puberty blockers in the prior year. (GBH)
- Maryland: State dollars, as required by the 2023 Trans Health Equity Act (notice dated Oct 2). (Maryland Medicaid)
- Illinois: State-only funds through June 30, 2027, after which the question goes to the budget process. (Summary of HFS provider notice, via Illinois Health and Hospital Association)
- Maine: Claims are paid with state-only funds, as required by state law (bulletin dated Oct 9). (Maine DHHS)
- Vermont: State funds replace federal funds for the affected hormone treatments and surgical procedures, with no change for members (announced Sept 25). (Vermont DVHA)
- New Mexico: Puberty blockers and cross-sex hormones for members aged 12 to 17 are covered with state funds and require prior authorization. Surgery is not covered for minors (supplement dated Oct 9). (NM HCA)
Not yet announced
In these 10 places, federal Medicaid funding for these procedures for minors ended on October 13. Each must now decide whether to continue coverage with state funds or end it. As of October 13, none had announced a decision.
- Michigan: A Sept 9 notice to tribes says the change "will result in a reduction of covered services" effective Oct 13. The state has not announced whether it will use state funds. (MDHHS L 26-53)
- Delaware: The Department of Health and Social Services says it "must comply" with the federal rule, meaning federal funds can no longer be used, and will notify affected members and providers. It has not said whether it will use state funds. (Delaware DHSS)
- Connecticut: A lead plaintiff in the multistate lawsuit against the rule. It has not announced whether it will use state funds. (CT News Junkie)
- Minnesota: Part of the multistate lawsuit. No announcement on state funding. (CT News Junkie)
- New Jersey: Part of the multistate lawsuit. No announcement on state funding. (CT News Junkie)
- Pennsylvania: Gov. Josh Shapiro joined the lawsuit. No announcement on state funding. (CT News Junkie)
- D.C.: Part of the multistate lawsuit. No announcement on local funding. (CT News Junkie)
- Hawaii: Part of the multistate lawsuit. No announcement on state funding. (CT News Junkie)
- Nevada: Part of the multistate lawsuit. No announcement on state funding. (CT News Junkie)
- Rhode Island: Part of the multistate lawsuit. No announcement on state funding. (CT News Junkie)
Cost estimates
CMS projects that the rule will reduce combined Medicaid and CHIP spending by $235 million from fiscal 2027 through 2036: $138 million federal and $97 million state. States without restrictions accounted for 76% of spending. In states that continue coverage, the federal share shifts to state budgets. (AJMC)
Legal challenge
Twenty states, the District of Columbia and Pennsylvania's governor sued to overturn the rule on September 2, 2026, in federal court in Massachusetts (complaint). As of October 13, no court had blocked the rule.