The Centers for Medicare and Medicaid Services (CMS) finalized a new rule on Tuesday that restricts the use of federal Medicaid and Children’s Health Insurance Program (CHIP) funds for gender-affirming healthcare services provided to minors. Under this directive, federal dollars can no longer be utilized to cover procedures or treatments categorized as gender-affirming care for individuals under the age of 18.

This policy represents a significant shift in federal oversight of state-administered healthcare programs. By barring the use of these specific federal funding streams, the administration aims to limit the financial support available for such treatments within the public healthcare system. The rule applies specifically to the federal portion of Medicaid and CHIP, which are joint federal-state programs. While the administration frames this as a necessary step to ensure federal funds are not used for these specific medical interventions, critics argue that the policy interferes with medical decisions made between families and their healthcare providers.

The implementation of this rule is expected to face legal challenges, as similar restrictions on healthcare access have historically been met with lawsuits from advocacy groups and medical associations. The administration has maintained that its authority under the Social Security Act allows for these restrictions on how federal health dollars are spent. As of now, the rule is set to take effect, though the practical impact on state-level coverage may vary depending on how individual states choose to respond to the loss of federal matching funds for these specific services.