CMS Ends Federal Funding for Sex Rejecting Procedures for Children

The Centers for Medicare & Medicaid Services (CMS) and Department of Health and Human Services (HHS) recently finalized a rule prohibiting Federal dollars from being used to fund sex-rejecting procedures on children and adolescents.

Over the last ten years, a growing number of children and adolescents have been diagnosed with gender dysphoria. In 2025, HHS undertook a review and found sex-rejecting procedures on children, which include puberty blockers, cross-sex hormones, and surgical operations, can result in irreversible damage, including infertility, impaired sexual function, diminished bone density, altered brain development, and other lasting physiological effects. Ultimately, HHS determined that the existing medical evidence fails to support a favorable risk-benefit assessment for chemical or surgical treatments for gender dysphoria.

Effective October 13, 2026, State Medicaid plans cannot use Federal Medicaid dollars to fund sex-rejecting procedures for individuals under the age of 18. In addition, State Children's Health Insurance Program (CHIP) cannot use Federal CHIP dollars to fund sex-rejecting procedures for individuals under the age of 19.

This final rule will permit State Medicaid and CHIP agencies to continue to cover procedures when the child has a medically verifiable disorder of sexual development, needs the procedure for a purpose other than attempting to align the child's physical appearance or body with an asserted identity that differs from the child's sex, or has complications, including any infection, injury, disease, or disorder that has been caused by or exacerbated by the performance of sex-rejecting procedures. In addition, the rule will continue to provide Federal matching funds for mental health treatment for gender dysphoria, and it does not prohibit States from providing coverage of sex-rejecting procedures using State-only funds.

For Medicaid and CHIP beneficiaries who are actively receiving cross-sex hormone therapy, State Medicaid and CHIP agencies may continue to claim Federal Financial Participation for those hormone therapy medications for a period of up to 6 months from the effective date of this final rule.

Resources:

• Federal Register: Medicaid Program; Prohibition on Federal Medicaid and Children's Health Insurance Program Funding for Sex-Rejecting Procedures Furnished to Children
• HHS Press Release: HHS Ends Federal Medicaid and CHIP Funding for Sex-Rejecting Procedures for Children and Youth
• CMS Ends Federal Medicaid and CHIP Funding for Sex-Rejecting Procedures for Children and Youth | CMS