On September 2, 2026, Illinois Attorney General Kwame Raoul, California Attorney General Rob Bonta, Connecticut Attorney General William Tong, Maryland Attorney General Anthony Brown, and Massachusetts Attorney General Andrea Joy Campbell co-led a coalition of 21 attorneys general and the governor of Pennsylvania in challenging a U.S. Department of Health and Human Services (HHS) rule that would prohibit federal reimbursement for gender-affirming care for adolescents in Medicaid and the Children’s Health Insurance Program (CHIP). The states argue that the rule violates separation of powers principles, federal statute, and agency precedent within public insurance programs.  

On December 18, 2025, HHS announced a proposed rule that would stop Medicaid and CHIP from reimbursing for medically necessary gender-affirming care for anyone under the age of 18 in Medicaid and under the age of 19 in CHIP.  The rule would exclude coverage for some hormonal medications and, although rarely used, certain surgeries for young people.  Many state attorneys general filed comments opposing the proposed rule. The final version of the rule was announced on August 11, 2026, and would be effective on October 13, 2026, unless the court intervenes. 

Gender-affirming care is a medical best practice for young people that is supported by numerous medical groups including the American Medical Association and the American Academy of Pediatrics.  And it is estimated that 130,000 young trans people with Medicaid or CHIP coverage live in states where this care is not restricted based on age. Yet, dozens of providers have already ceased offering such services after legal threats from the Trump administration, and these new federal Medicaid and CHIP restrictions could further jeopardize access to care.  

The state coalition argues that the final rule oversteps HHS’s legal authority and violates separation of powers by seeking to regulate the practice of medicine, a power that has long been reserved for the states. Further, the rule violates federal statutes including the Social Security Act and exceeds agency authority to prohibit essential medical services that comply with state law.  It also deviates from longstanding program precedent within public insurance programs.  

The states ask the court to declare the rule unlawful and block HHS from implementing or enforcing it.