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

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Rady Children’s Health, encompassing Children’s Hospital of Orange County, Rady Children’s Hospital San Diego and Rady Children’s in Riverside County, said the organization was recently referred for investigation to the U.S. Department of Health and Human Services Office of Inspector General.

The federal agency, which oversees the Medicare and Medicaid programs, did not comment about the timeline of its investigation or the focus of the probe Friday, saying HHS-OIG’s “general policy is to neither confirm nor deny the existence of an investigation.”

But patients at Rady Children’s and CHOC have been told they will no longer receive gender-affirming care at the facilities, which can include prescriptions for medications like puberty blockers, beginning on Feb. 6, according to advocates. As a result, patients going without medications like puberty blockers will not be able to see a doctor and have the specialized medical professional walk them through the process of going off the medication.

“The environment around gender-affirming care has changed dramatically, with escalating federal actions,” Rady Children’s Health said in a statement. “These developments affect our role and responsibilities as a provider participating in federal programs such as Medicaid and Medicare, which are essential to caring for all children and families in our communities.”

In December, HHS announced that the Centers for Medicare & Medicaid Services were proposing new rules that would ban gender-affirming care by medical providers that participate in its programs.

“Nearly all U.S. hospitals participate in Medicare and Medicaid and this action is designed to ensure that the U.S. government will not be in business with organizations that intentionally or unintentionally inflict permanent harm on children,” the department said at the time.

The department said that officials would also propose additional rules to prohibit Medicaid and other funding from being used for gender-affirming care for children or adults under the age of 19.

Rady Children’s Health said the decision to stop providing such medical interventions, procedures and prescriptions for patients was “very difficult” and “made to ensure we can continue serving all children and families across the communities we serve.”

LGTBQ+ advocacy organizations say the move is another example of continuous efforts by the Trump administration to mischaracterize legitimate care backed by major U.S. medical associations and erode access to services based in part on the false premise that transgender people do not exist.

Many hospitals across the country, including in California, have already pulled back on gender-affirming care or shuttered entire programs amid mounting pressure from the federal government.

In July, Children’s Hospital Los Angeles officially closed what had been among the largest and oldest pediatric gender clinics in the United States. For years the clinic had provided puberty blockers, hormones and other procedures for trans youth on public insurance.

This has forced transgender children and their families to relocate — sometimes to other states and out of the country — to seek medical care, said Brit Cervantes, the founder of OCGAPNet, an organization that advocates for trans rights.

“It’s a message that’s being sent that’s very clear: transgender people, and particularly transgender youth, don’t have a right to exist, and we don’t have a right to have access to healthcare,” Cervantes said. “All of this rhetoric that comes with these hostile policies is really damaging.”

OCGAPNet and Pride at the Pier, another Orange County-based organization, are holding a rally outside Children’s Hospital of Orange County in Orange at noon on Saturday to call for hospital leadership to resist federal pressure. TransFamily Support Services and the Alliance for TransYouth Rights are also holding a protest at 11 a.m. on Saturday outside the Rady Children’s Hospital in San Diego.

“This will not end with transgender kids,” said Kanan Durham, director of Pride at the Pier. “The administration is testing how easily they can force a hospital to betray its patients. They’re weaponizing their purse strings to tell us who can get care and who can’t.”

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The lawsuit, filed in the U.S. District Court for the District of Massachusetts, targets a January executive order that makes it U.S. policy not to “fund, sponsor, promote, assist, or support” gender transition for people under 19. The order threatens to pull federal funding from medical institutions that provide this type of care. 

“The result is an atmosphere of fear and intimidation experienced by transgender individuals, their families and caregivers, and the medical professionals who seek only to provide necessary, lawful care to their patients,” the attorneys general wrote in the suit.

This marks the 37th lawsuit California has filed against the Trump administration.

Gender-affirming care is legal and protected for people 18 years old and older in California. Certain treatments are also available to younger people with parental consent. The lawsuit comes as some of the largest medical providers in the state halt gender-affirming services.

The Trump administration has “trampled over state rights, overstepped their constitutional authority and endangered vulnerable minors and 18-year-olds,” Bonta said in a Friday press conference announcing the lawsuit alongside the attorneys general of Illinois and Connecticut. 

Providers scale back care

Following Trump’s executive order, the U.S. Department of Justice directed employees to investigate doctors, hospitals and pharmaceutical companies that provided gender-affirming care. In July, U.S. Attorney General Pamela Bondi announced in a statement that her department had issued more than 20 subpoenas to medical providers as it investigates “healthcare fraud, false statements and more.”

Responding to the suit, DOJ spokesperson Natalie Baldassarre said, “As Attorney General Bondi has made clear, this Department of Justice will use every legal and law enforcement tool available to protect innocent children from being mutilated under the guise of ‘care.’”

Bonta said that providers, fearing prosecution, have scaled back on providing gender-affirming care, which has left many patients without critical medical care, Bonta said. The care includes hormone therapy, puberty blockers and surgical procedures. Research shows that gender-affirming care can positively impact the mental health of transgender youth. Forcing young people to wait until they are 19 or older to start care allows symptoms of gender dysphoria to worsen, Bonta said.

The state attorneys general argue that acceding to Trump’s orders puts providers at odds with states’ anti-discrimination and age-of-majority laws. In California, it is illegal to deny care on the basis of gender identity and gender expression. At the same time, many medical providers rely heavily on federal funding in the form of research and education grants, as well as reimbursements from public payer programs like Medi-Cal.

The directives from the Trump administration have already forced several providers to suspend services. Last month, Children’s Hospital Los Angeles closed its gender-affirming care center, forcing about 3,000 patients under 21 to look elsewhere for care. 

“The shutdown came despite efforts my office took over recent months to assure (Children’s Hospital Los Angeles) that they were protected and required to provide gender-affirming care,” Bonta said.

Stanford Medicine has also paused surgical procedures for people under 19. And this week, Kaiser Permanente announced that it too would pause gender-affirming surgeries starting Aug. 29, noting that hormone therapies would still be available. 

The executive order being challenged is just one of several that Trump has issued targeting transgender people. Others include one that recognizes only two biological sexes, a second that prevents transgender girls and women from participating in women’s sports, and a third that threatens federal funds for schools that support transgender youth.

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