WASHINGTON, D.C. — The Centers for Medicare and Medicaid Services on Tuesday finalized a rule prohibiting the use of federal Medicaid and Children’s Health Insurance Program funds for what the agency terms “sex-rejecting procedures” provided to children and youth, referencing weak evidence of benefits and significant risks of irreversible harm.
The rule, scheduled for publication in the Federal Register on August 13, 2026, takes effect October 13, 2026 — 60 days after publication. It requires state Medicaid plans to bar payment for these procedures for beneficiaries under age 18 and separate CHIP plans to do the same for those under 19. Federal matching funds, known as Federal Financial Participation, will no longer be available for such expenditures.
“Today, we are ending federal taxpayer funding for sex-rejecting procedures on children,” HHS Secretary Robert F. Kennedy Jr. said in a statement accompanying the CMS press release. “These interventions carry serious risks and can cause irreversible harm. The federal government will no longer use Medicaid and CHIP dollars to fund procedures that fail to meet the evidentiary standard our children deserve.”
CMS Administrator Dr. Mehmet Oz added: “Children deserve our protection, not experimental interventions that pose serious risks and convey no proven benefits. By cutting off federal funds for these sex-rejecting procedures, we’re following the science, saving taxpayer dollars, and, most importantly, protecting children from potentially irreversible harm so they can truly flourish.”
The finalized rule means low-income families enrolled in Medicaid or CHIP will no longer have federal dollars helping cover puberty blockers, cross-sex hormones or surgeries intended to make a child’s body more closely match a gender identity different from their biological sex. States remain free to pay for the care entirely with their own money, and private insurance or self-pay options are unaffected. Mental health services, including counseling and psychotherapy for gender dysphoria, continue to be covered under existing Medicaid Early and Periodic Screening, Diagnostic and Treatment requirements and CHIP rules.
The regulation defines a “sex-rejecting procedure” as any pharmaceutical or surgical intervention that attempts to align an individual’s physical appearance or body with an asserted identity that differs from the individual’s sex — either by intentionally disrupting or suppressing normal development of primary or secondary sex characteristics, or by intentionally altering the body, including through amputation or destruction of sexual and reproductive organs. Exceptions cover treatment of medically verifiable disorders of sexual development, procedures performed for other medical purposes, and care for complications arising from prior such interventions.
For children already receiving cross-sex hormone therapy as of the effective date, federal funding may continue for a tapering period of up to six months to allow safe discontinuation under medical supervision. No such grace period applies to new starts of hormones, puberty blockers or surgeries after the effective date.
CMS grounded the policy in sections of the Social Security Act requiring that Medicaid care be provided consistent with the best interests of recipients and that payments promote quality of care, and that CHIP be administered effectively and efficiently.
The agency pointed to a comprehensive HHS umbrella review released in final form in November 2025, the United Kingdom’s Cass Review of 2024, and similar systematic assessments in Sweden, Finland and other European countries. Those reviews found the evidence of benefit for pediatric medical transition to be of very low certainty while documenting plausible risks including infertility or sterility, sexual dysfunction, impaired bone density accrual, adverse cognitive effects, cardiovascular and metabolic problems, psychiatric disorders, surgical complications and regret.
The HHS Review concluded that “the evidence for benefit of pediatric medical transition is very uncertain, while the evidence for harm is less uncertain.” It noted that major U.S. medical organizations’ guidelines, including those from the World Professional Association for Transgender Health, have been rated low-quality by independent appraisals and that several European health systems have sharply restricted the interventions for minors, favoring exploratory psychotherapy as first-line care.
The new policy arrives amid a documented rise in diagnoses of gender dysphoria among youth over the past decade, particularly among adolescent females, and the proliferation of specialized gender clinics in the United States. International data from England, Germany and elsewhere have shown parallel increases accompanied by high rates of co-occurring anxiety, depression and self-harm, prompting calls for better mental-health prevention and treatment.
The final rule aligns with President Donald Trump’s Executive Order 14187, issued January 28, 2025, directing HHS to take appropriate actions consistent with law to end the chemical and surgical treatment of children for gender dysphoria. CMS stated that the rule rests on independent statutory authority under the Social Security Act rather than the specific sections of executive orders that have faced preliminary injunctions in federal courts in Washington state and Maryland. It also stated that the rule does not rely on a December 2025 HHS declaration by Kennedy that the procedures fail to meet professionally recognized standards of care — a declaration a federal judge in Oregon later vacated.
Approximately 17 state Medicaid programs previously covered one or more forms of these procedures for children. CMS projects the rule will reduce combined Medicaid and CHIP spending by about $235 million over a decade, with roughly $138 million in federal savings and $97 million in state savings. Medicaid and CHIP together cover about 35.5 million children.
Washington Attorney General Nick Brown, who co-led a multistate lawsuit challenging related HHS actions, has described earlier administration moves as “cruel and unnecessary” and an attempt to “rob them of care that is lifesaving in some instances.”
The American Academy of Pediatrics has previously called similar proposals “a baseless intrusion into the patient-physician relationship” and reaffirmed support for care “backed by science, delivered with compassion, and offered without political interference.” The American Medical Association and American Psychological Association have also backed access to what they term gender-affirming care.
Legal challenges to the final rule itself are widely anticipated, building on ongoing litigation over related executive actions and the Kennedy Declaration.
