California lawmakers are racing against the clock to protect gender-affirming healthcare for transgender youth on Medi-Cal, after a new federal rule threatens to strip funding for those services starting this fall — a deadline that advocates say the state was warned about but failed to adequately prepare for.
The Centers for Medicare and Medicaid Services finalized a rule this month barring federal reimbursement for gender-affirming medical care provided to minors. The change takes effect Oct. 13, and could immediately affect roughly 1,500 transgender and gender-nonconforming children across California who rely on Medi-Cal for puberty blockers, hormone therapy and related treatment.
In response, state legislators are pushing for $10 million in emergency funding before the legislative session ends, intended to bridge the gap while the Department of Health Care Services builds a new, state-only funding system that doesn’t rely on federal dollars. But the department itself has said that process could take up to a year — far longer than the six weeks lawmakers have to act.
Assemblymember Chris Ward, a San Diego Democrat who chairs the Legislature’s LGBTQ caucus, said the stakes are high for a population that depends heavily on public assistance.
“They’re low-income Californians who need support arguably the most, and Medi-Cal is their lifeline to access that care,” Ward said. “We need to stand up for them.”
Still, many parents and advocacy organizations say they doubt the state can create a new program in time — and feel blindsided after months of budget talks that they believed had already addressed the issue.
For nearly eight months, LGBTQ advocates and medical groups warned California officials that federal cuts were coming and pressed for the state to set aside funding to protect transgender youth on Medi-Cal. Many believed lawmakers had done just that in June, when the state budget included $56 million earmarked for gender-affirming and reproductive health services.
But after the budget passed, advocates discovered that language guaranteeing a portion of that money would fund a separate, state-run Medi-Cal pathway for transgender children had quietly been removed by the Newsom administration.
One mother, identified by CalMatters only by her initials, A.W., to protect her children’s privacy, said she felt misled.
“I thought that when we took our kids to Sacramento to meet with members of the Assembly and Senate that we were advocating for a backfill that would cover kids on Medi-Cal who would lose those federal dollars,” she said. “I’m really disappointed that our coalition spent so much time and effort on something that I’m not sure we’ll reap the benefits of, and that sucks.”
The Department of Health Care Services, which oversees Medi-Cal, declined to explain why the funding wasn’t specifically directed toward the program, referring questions instead to the Department of Finance. A finance department spokesperson said officials were “aware of this particular issue” but offered no further details.
Ward said the state budget — which grappled with California’s fourth consecutive deficit — left little room for new commitments, and noted that the federal rule hadn’t been finalized when budget negotiations concluded in June.
The California Health and Human Services Agency has pointed to the $56 million already allocated, stating on social media that the state remains “committed to ensuring all people have access to the medically necessary, evidence-based care that will allow them not only to survive, but thrive.”
But advocates argue that statement obscures the reality of how the money will actually be spent. Arne Johnson, an organizer with Rainbow Families Action, called the framing misleading.
“In the end, not a penny of it is going to backfill Medi-Cal at all,” Johnson said.
According to two people familiar with the budget negotiations, the funds will instead go toward building up infrastructure at transgender health clinics — a response to more care shifting from hospitals to outpatient settings amid federal pressure — as well as supporting other groups affected by federal funding cuts, including military families and veterans.
While many advocates welcome that long-term investment, they say it does little to address the immediate risk facing children who could lose care within weeks.
“It’s been very frustrating to see California say in many words that it’s supportive of trans people, and be so unprepared for something we all knew was about to happen,” Johnson said.
Laura Sheckler, budget and policy director for the California Primary Care Association, which represents community health clinics, said time is running out for the state to act.
“The bigger question is how is California going to ensure that whatever they set up is going to be available on Oct. 13 when these rules go into effect?” she said.
For A.W.’s family, the stakes are deeply personal. Her eldest son, now 15, has received care through Stanford’s specialty gender clinic since he was 8, when he began seeing a therapist after showing signs of gender dysphoria from an early age — pulling bows from his hair, resisting dresses and asking why he couldn’t use the bathroom standing up.
“We had zero education or inkling that he might be trans, but as we started educating ourselves and learning more, we realized that he at a very, very young age was verbally communicating with us who he is,” A.W. said.
The family relocated from Virginia to the Bay Area, and her son later began puberty blockers before transitioning to weekly testosterone injections, which he now administers himself. When her husband lost his job two years ago, Medi-Cal allowed her son to continue seeing the same medical team without interruption — something A.W. said was critical to his wellbeing.
Her younger child came out as transgender last year as well, adding another layer of urgency to the family’s concerns about the looming funding cliff.
For her eldest son, she said, any disruption in access to testosterone wouldn’t just be an inconvenience — it could force an unwanted medical detransition.
“A gap in care for my son is a terrible thing,” A.W. said. “He doesn’t take testosterone and what happens? He would be forced to medically detransition. It’s unacceptable that the state wasn’t prepared.”
Original source: CalMatters
