Final Rule Ends Federal Funding for Gender-Affirming Procedures for Children
- By Renee Dustman
- In Billing
- August 14, 2026
- No Comments
A final rule published in the Aug. 18 Federal Register by the Centers for Medicare & Medicaid Services (CMS) officially ends federal funding for gender-affirming procedures for children and adolescents.
In accordance with an executive order President Trump signed on Jan. 28, 2025, CMS issued the proposed rule “Prohibiting Sex-Rejecting Procedures for Children” on Dec. 19, 2025, to implement the president’s directive.
During the 6-month review period, CMS received 11,000 public comments, mostly opposed to the provisions in the proposed rule. CMS explains its rationale for finalizing its decision in the final rule.
What the Final Rule Means
The final rule, scheduled to take effect Oct. 13, prohibits states from using federal dollars to pay for gender-affirming procedures for Medicaid beneficiaries under age 18 and Children’s Health Insurance Program (CHIP) beneficiaries under age 19.
A modification from the proposed rule, agencies may continue to claim federal financial participation for hormone therapy medications for beneficiaries who are actively receiving cross-sex hormone therapy for up to six months from the effective date of the final rule. There are a couple of stipulations to this provision:
- The child must be receiving cross-sex hormone therapy as part of gender-affirming procedures as of the effective date of the final rule.
- It does not extend to related procedures or puberty blocking medications.
The final rule permits “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 continues to provide federal matching funds for mental health treatment for gender dysphoria (F64.-).
What the Rule Doesn’t Mean
As stated in the final rule, this rule does not prevent states from providing coverage for gender-affirming procedures with state-only funds, nor does it prevent private insurance from covering gender-affirming procedures performed on children.
As well, the final rule does not exclude providers who provide gender-affirming procedures to children from federal healthcare programs.
The final rule also does not supersede any existing court decisions.
What Constitutes Sex-Rejecting Procedures?
According to an article published in JAMA Network Open (vol. 6, no. 8) nearly 3,700 children aged 12 to 18 years old diagnosed with gender dysphoria underwent gender-affirming procedures between 2016 and 2020.
By definition of the final rule, “Sex-rejecting procedure means any pharmaceutical or surgical intervention that attempts to align an individual’s physical appearance or body with an asserted identify that differs from the individual’s sex by either of the following:
(1) Intentionally disrupting or suppressing the normal development of natural biological functions, including primary or secondary sex-based traits; or
(2) Intentionally altering an individual’s physical appearance or body, including amputating, minimizing or destroying primary or secondary sex-based traits such as the sexual and reproductive organs.”
According to the AMA, typical gender-affirming procedures include:
- Mastectomy
- Breast augmentation
- Cosmetic surgery
- Genital surgeries (vaginoplasty, phalloplasty, metoidioplasty, orchiectomy, vulvoplasty, hysterectomy, clitoroplasty, urethroplasty, oophorectomy)
- Voice surgery, tracheal shave (chondrolaryngoplasty)
- Body contouring, fat grafting
For more information and to read the public comments, see the final rule in the Federal Register. CMS also posted a press release on Aug. 11, on its website.
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