States sue Trump administration over rule forbidding federal funds for youth gender care

Meg Wingerter, The Denver Post on Sep 4, 2026

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Twenty-one states and the District of Columbia are suing the U.S. Department of Health and Human Services for banning the use of federal funds to pay for gender-affirming care for youth insured by Medicaid.

The attorneys general argued that when Congress created Medicaid and the Children’s Health Insurance Program, it left most decisions about which services to cover up to the states. The federal government and the states split the cost of covering low-income people through the programs.

HHS proposed a rule in December that wouldn’t allow federal funding to go toward puberty blockers, cross-sex hormones or certain surgeries for transgender people under 18 covered by Medicaid.

That rule is scheduled to take effect Oct. 13. Along with the District of Columbia, the states filing suit are Illinois, California, Connecticut, Maryland, Massachusetts, Colorado, Delaware, Hawaii, Maine, Michigan, Minnesota, Nevada, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington and Wisconsin.

Children who needed the same treatments for conditions other than gender dysphoria would continue to have them covered by Medicaid. Gender dysphoria refers to distress when someone’s sense of their own gender doesn’t align with how the world sees them.

Studies have found that transgender children who receive puberty blockers have a lower risk of depression and suicidal ideation than those who don’t.

“The Trump administration is once again singling out transgender youth, this time by trying to deny them access to medically necessary care simply because they rely on Medicaid,” Colorado Attorney General Phil Weiser said in a news release. “Parents, in consultation with trusted medical providers, know what is best for their children, not federal political appointees in Washington.”

Media representatives for HHS didn’t respond to a request that they comment on the lawsuit.

At about the same time it announced the rule, the department said it would cut hospitals and other providers out of Medicaid and Medicare if they provided gender-affirming care to minors.

The Trump administration has also issued subpoenas to providers for patients’ information; excluded transgender people from military service; ordered federal prisons to stop providing gender-affirming care to inmates; and required passports to display the same sex as someone’s original birth certificate.

In Colorado, Children’s Hospital Colorado and Denver Health stopped offering puberty blockers and cross-sex hormones to transgender children in January because of the risk to their funding.

Families of affected kids sued Children’s, which officially reinstated gender-affirming care in its scope of services following a court order, but none of the Aurora hospital’s providers are offering it. The hospital faces a contempt of court hearing to determine whether it complied with the judge’s ruling.

The rule requires states to either come up with funds to keep paying providers or to stop covering gender-affirming care, the lawsuit said. Colorado hasn’t announced what it will do. At least one state, New Mexico, has said it will make up the difference with its own funds.

The states filed the lawsuit, which also alleged that HHS violated multiple laws laying out required procedures for changing federal rules, on Wednesday in Massachusetts.

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