New Trump Administration Rule Blocks Federal Medicaid and CHIP Funding for Medically Necessary Care
New York Attorney General Letitia James today joined 20 other attorneys general and the governor of Pennsylvania in suing the Trump administration over a new rule that blocks states from receiving federal Medicaid and Children’s Health Insurance Program (CHIP) funding for gender-affirming care provided to transgender adolescents. The rule, issued last month by the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS), prohibits Medicaid reimbursement for medically necessary health care when used to treat gender dysphoria in patients under 18, and imposes similar restrictions on CHIP coverage for patients under 19. Attorney General James and the coalition argue that CMS exceeded its authority by imposing a nationwide prohibition on federal reimbursement for health care that states have chosen to cover.
“The federal government does not have the authority to dictate what medically necessary care New York provides to its residents,” said Attorney General James. “This unlawful rule threatens access to health care for transgender young people and undermines states’ ability to administer our own Medicaid programs. New York will continue to stand up for patients and defend our authority to provide the care they need.”
States have long received federal reimbursement for care for transgender adolescents. In early August, however, CMS published a new final rule unilaterally prohibiting states from using federal reimbursement for puberty-delaying medications, hormone therapies, and surgical procedures when used to treat gender dysphoria. The same treatments remain covered when provided for other purposes, such as treating endocrine disorders or precocious puberty. As the coalition notes in the lawsuit, more than 90 percent of the comments submitted to CMS opposed the rule, including comments from Attorney General James and numerous leading medical organizations.
Attorney General James and the coalition argue this unjustifiable rule will cause serious harm, especially to transgender youth and young adults. Research overwhelmingly shows that access to gender-affirming care reduces depression, anxiety, and suicidality in transgender youth. The Trevor Project found that suicide attempts increased among transgender youth as much as 72 percent in the first year after state-level restrictions on gender-affirming care were imposed.
In New York, discrimination in health care based on gender identity and other protected characteristics is illegal. Just 3.13 percent of New York adolescents identify as transgender, according to the Williams Institute – approximately 37,000 individuals. Only a fraction of those receive gender-affirming care, and fewer still seek Medicaid or CHIP reimbursement for this care. The states argue that this rule targets some of their most vulnerable residents and seeks to create illegal barriers to care for low-income patients who cannot afford alternative coverage. The attorneys general also assert that the rule will impose significant new costs and administrative burdens on state Medicaid programs, and states that want to continue covering the care could be forced to assume burdensome costs previously reimbursed by the federal government.
Attorney General James and the coalition argue that Congress never gave CMS the authority to unilaterally refuse to reimburse evidence-based healthcare that states lawfully chose to provide and protect. They challenge the process CMS used to justify the rule, including its reliance on an HHS report that the states argue was developed in violation of federal transparency requirements and fails to adequately account for the medical evidence submitted during the rulemaking process. They are asking the court to declare the final rule unlawful and strike down enforcement in their states.
Attorney General James joins in this lawsuit with the attorneys general of California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Michigan, Minnesota, Maryland, Massachusetts, Nevada, New Jersey, Oregon, Rhode Island, Vermont, Virginia, Washington, Wisconsin, and the District of Columbia, along with the governor of Pennsylvania.
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