Blue states sue Trump over Medicaid ban on trans youth treatments

The states accuse the Trump administration of using transgender minors as “scapegoats to stoke national division.”

by Erik Uebelacker, Court House News, September 2, 2026

(CN) — A coalition of 22 states sued the Trump administration Wednesday seeking to lift barriers to gender-affirming care for transgender youth.

In a 60-page lawsuit filed in Massachusetts federal court, the states take aim at the Department of Health and Human Services and its Centers for Medicare & Medicaid Services, which published a final rule last month prohibiting states from using federal reimbursement for puberty-delaying medications, hormone therapies and surgical procedures to treat gender dysphoria.

These same treatments remain covered for other purposes, the states note, leading them to believe the Trump administration made this choice merely to punish transgender youth.

“Since the first day of President Trump’s second term, his administration has moved quickly and aggressively to enlarge the powers of the executive branch, without congressional authority, across all corners of the federal government,” the states claim. “The administration seeks such broad and unprecedented powers in part to advance its social policy agenda, a key component of which involves relentless attacks on a small and vulnerable population — transgender individuals — whose very existence the president scapegoats to stoke national division.”

The states claim this new rule creates unlawful barriers for low-income Americans, who may have no other ways to afford this treatment than Medicaid or the Children’s Health Insurance Program.

They also say the government acted without statutory authority or a reasoned basis to make the decision at all.

“Congress has vested the states with the authority to determine which services would be covered under their Medicaid and CHIP programs when made pursuant to individualized determinations of medical necessity,” the states argue.

They say the new rule virtually strips them of their role as Medicaid and CHIP administrators, despite the fact Congress never empowered the executive branch to do that.

“Through this rule, CMS sets a troubling and unlawful precedent that the executive branch can, without congressional authorization, replace individualized medical judgments made by licensed practitioners consistent with state law with a categorical, agency-determined prohibition on federal reimbursement for healthcare it happens to disfavor, even where the care is widely supported by medical professionals and protected by law in many plaintiff states,” the states say.

Additionally, they claim the rule change is arbitrary and capricious — in part because HHS received thousands of public comments online when publishing a proposed version of the change, and more than 90% of them were in opposition to the rule. Nonetheless, the department pressed on and implemented it anyway on Aug. 13., a move that “threatens the foundation of the Medicaid system,” according to the states.

“The federal government does not have the authority to dictate what medically necessary care New York provides to its residents,” said New York Attorney General James, one of the members of the coalition. “This unlawful rule threatens access to health care for transgender young people and undermines states’ ability to administer our own Medicaid programs. New York will continue to stand up for patients and defend our authority to provide the care they need.”

In addition to New York, the coalition includes California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Michigan, Minnesota, Maryland, Massachusetts, Nevada, New Jersey, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, Wisconsin and the District of Columbia.

The defendants include HHS, its secretary, Robert F. Kennedy, Jr., the Centers for Medicare and Medicaid Services and its administrator, Mehmet Oz. A representative for HHS declined to comment on ongoing litigation.

It’s the latest multistate lawsuit against the Trump administration’s targeting of transgender youth. Many of the same states already sued HHS this past December after it issued a declaration that called certain gender-affirming treatments unsafe for children experiencing gender dysphoria — a declaration that was partially the basis for the new scrutinized rule change.

Another coalition of states sued the administration last summer after it accused the government of trying to strong-arm hospitals to ax gender-affirming care for minors.

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REALITY: “Gender Affirming Care” -- What would George Orwell Say?