President Donald Trump has announced that his administration will end federal Medicaid and Children’s Health Insurance Program (CHIP) funding for specified medical interventions for “transgender” minors, with the new policy taking effect October 13, 2026.
The Centers for Medicare and Medicaid Services (CMS) finalized the rule after proposing the funding restriction in December 2025. Medicaid will no longer provide federal financial participation for the specified procedures for children under 18, while CHIP will apply the restriction to children under 19.
Trump Announces Federal Funding Cut
Trump announced the policy in a Tuesday post on Truth Social, directing CMS Administrator Dr. Mehmet Oz to implement the change. The White House has previously directed federal agencies to take steps to restrict federal support for sex-altering procedures involving minors.
Trump wrote on August 11, 2026, the following:
“Today, at my direction, Dr. Mehmet Oz announced that Medicaid will NO LONGER fund gender transition surgeries and hormones for minors. We are not going to pay for our innocent children to undergo these barbaric surgeries and practices, which result in unthinkable and irreversible harm to their young bodies. Thanks to our strong position and pressure on this issue over the past year and a half, dozens of U.S. hospitals have already ended this so-called “gender-affirming care,” and we expect many more to follow. Just think about all of the young, innocent, and perhaps confused children who will be spared! While the Dumocrat Party wants your kids to be able to chop off their reproductive organs before they are old enough to vote, President Donald J. Trump (ME!) and the Republican Party say that is ABSURD, and we will protect America’s children. Please remember this when you are casting your vote in the Midterm Elections in November. Thank you for your attention to this very important matter! President DONALD J. TRUMP”
The announcement follows a federal rulemaking process that began with a CMS proposal published December 19, 2025. The Federal Register proposal identified the rule as CMS-2451-P and proposed prohibiting federal Medicaid funding for specified “sex-rejecting procedures” for children under 18 and federal CHIP funding for children under 19. The public comment period closed February 17, 2026.
What the Rule Covers
The rule applies to pharmaceutical and surgical interventions when used to alter a child’s physical appearance or body to align with an asserted identity that differs from the child’s sex.
The affected interventions include “puberty-suppressing drugs,” “cross-sex hormones,” and certain surgeries, including mastectomy and, in rare cases, vaginoplasty, when they fall within the rule’s definition of “sex-rejecting procedures.”
The federal restriction does not apply to every use of those medications or procedures. The CMS proposal included exceptions for treatment of medically verifiable disorders of sexual development, treatment undertaken for purposes other than aligning a child’s physical appearance or body with an asserted identity, and treatment of complications resulting from a previous procedure.
Mental-health treatment for conditions such as “gender dysphoria” is also not eliminated by the Medicaid and CHIP funding restriction.
The policy includes a transition period for some minors already receiving hormone treatments. The Associated Press reported that Medicaid and CHIP will continue covering certain existing hormone treatments temporarily, with the phaseout extending into April 2027.
What It Means for Texas
The federal rule has a more limited immediate effect in Texas because state law already prohibits specified sex-altering procedures for minors.
Texas Senate Bill 14 took effect September 1, 2023, and prohibits physicians and other health care providers from knowingly providing specified procedures and treatments for “transgender” minors. The law also prohibits the use of state public money or public assistance to provide the prohibited procedures. The Texas attorney general’s office confirmed when the law took effect.
The law covers surgical procedures, “puberty-blocking drugs,” and certain hormone treatments, subject to statutory exceptions. It also addresses the use of public funds for the prohibited treatments.
In March 2026, Texas Attorney General Ken Paxton issued a legal opinion stating that SB 14’s prohibitions also apply to licensed mental-health providers when they facilitate prohibited medical interventions for minors.
Texas’ law remains in effect after the Texas Supreme Court rejected a challenge to its enforcement in 2024.
For Texas families and providers, therefore, the new federal rule primarily adds a federal funding restriction to an area already governed by state restrictions.
The Dallas Express Previously Reported on Texas’ First Detransition Clinic
The federal announcement comes less than three months after The Dallas Express reported on Texas Children’s Hospital’s agreement to establish what Texas Attorney General Ken Paxton described as the nation’s first detransition clinic.
Under a May settlement involving the Texas attorney general and U.S. Department of Justice, Texas Children’s agreed to establish the clinic and pay $10 million in connection with allegations involving Medicaid billing for prohibited sex-altering interventions. The settlement also requires the termination and removal of privileges for multiple physicians. The Texas attorney general’s announcement describes the agreement and the clinic.
The Justice Department separately described the agreement as a landmark resolution involving pediatric sex-altering procedures and said the clinic would provide care for people who had undergone such interventions.
The settlement is part of the broader federal and state effort that preceded Tuesday’s Medicaid and CHIP announcement.
The Dallas Express Reports Clinic Must Open by October
The federal announcement comes just days after The Dallas Express reported on a significant development in the Texas Children’s Hospital settlement. In an August 6 report, The Dallas Express reported that the settlement requiring the Houston hospital to establish the nation’s first detransition clinic had been fully executed.
Under the finalized agreement, Texas Children’s must open the multidisciplinary clinic by the end of October 2026 and provide services at no cost to patients for five years. The hospital also agreed to pay $10 million to resolve Medicaid fraud claims, with approximately $8.576 million going to the state and about $1.7 million going to whistleblower Vanessa Sivadge.
The August update provides a recent Texas example of separate state and settlement-based restrictions involving pediatric sex-altering procedures and Medicaid funding.
The federal Medicaid and CHIP rule adds a federal funding restriction, rather than replacing the Texas requirements.
Does the Federal Rule Override State Laws?
No. The federal rule does not make the underlying procedures illegal in every state.
The distinction is between federal funding and state medical law.
CMS’s proposal specifically stated that states could use state-only funds to cover procedures that would no longer qualify for federal Medicaid matching funds. The federal government, however, would not participate in the payment for those services through Medicaid or CHIP.
That means a state law permitting a particular procedure is not automatically invalidated by the CMS rule. Instead, a state participating in Medicaid or CHIP must administer those programs according to federal requirements.
The new policy therefore establishes a nationwide federal funding restriction, rather than a nationwide prohibition on the underlying medical procedures.
Texas already has its own prohibition, making the state’s situation different from that of states where the procedures remain permitted under state law.
What Happens if the Federal Rule Is Violated?
The federal rule does not create a new federal criminal offense with a specific prison sentence for physicians.
Instead, the key federal consequence is that federal Medicaid and CHIP funding is unavailable for covered expenditures involving the prohibited procedures. The restriction operates through the federal funding requirements governing those programs.
In other words, the rule does not establish a new federal criminal penalty for physicians who perform a procedure covered by the funding restriction. The federal consequence operates through Medicaid and CHIP funding.
Texas has separate penalties. Under SB 14, a physician who violates the state’s prohibition can face action against his or her medical license, including revocation. The Texas attorney general has also pursued enforcement actions against physicians accused of violating the law.
The federal rule therefore does not replace Texas’ existing enforcement system. Instead, it establishes an additional federal condition governing the use of Medicaid and CHIP funds.
A Federal Funding Rule With Nationwide Reach
The new policy applies to Medicaid and CHIP programs across the country, regardless of whether an individual state’s law separately permits or prohibits the procedures.
At least 27 states had enacted laws or policies limiting access to medical treatment for “transgender” minors as of May 2026, according to the KFF policy tracker.
In states that already prohibit the specified procedures, including Texas, the federal rule adds another layer of restrictions involving federal health-care funding. In states where state law does not independently prohibit the procedures, the rule prevents Medicaid and CHIP from using federal funds for services covered by the new regulation.
The policy is scheduled to take effect October 13, 2026.
