New York has joined a multistate lawsuit challenging a federal rule that blocks Medicaid and Children's Health Insurance Program reimbursement for gender-affirming care provided to transgender adolescents.
Attorney General Letitia James and the coalition argue that the U.S. Department of Health and Human Services and Centers for Medicare & Medicaid Services exceeded their authority by imposing a nationwide funding prohibition on care that states have chosen to cover.
The final rule published in early August bars federal Medicaid reimbursement for puberty-delaying medication, hormone therapy and surgical procedures when used to treat gender dysphoria in patients under 18. Similar restrictions apply to CHIP coverage for patients younger than 19.
The same treatments remain eligible for reimbursement when used for other purposes, including endocrine disorders or precocious puberty, according to the attorney general's office. The coalition says the distinction unlawfully targets transgender patients and interferes with state administration of Medicaid programs.
James said New York law prohibits health care discrimination based on gender identity and other protected characteristics. Her office cited a Williams Institute estimate that 3.13% of New York adolescents, or about 37,000 people, identify as transgender, while noting that only a fraction receive gender-affirming care and fewer seek Medicaid or CHIP reimbursement.
The states argue the rule could make care harder to obtain for low-income patients and impose added costs and administrative burdens on state programs. States that continue coverage could be required to replace federal reimbursements with their own funds.
The coalition also challenges the federal rulemaking process. It says more than 90% of comments submitted to CMS opposed the rule and argues that an HHS report used to justify it did not satisfy federal transparency requirements or adequately address medical evidence submitted during the process.
James' office cited research associating access to gender-affirming care with reduced depression, anxiety and suicidality among transgender youth. It also cited a Trevor Project finding that suicide attempts rose by as much as 72% during the first year after state restrictions were imposed, though the source release did not provide the underlying study details.
The lawsuit asks a court to declare the rule unlawful and prevent its enforcement in the participating states. The coalition includes 21 attorneys general, the District of Columbia and Pennsylvania's governor.
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