States Sue HHS to Keep Federal Dollars for Transgender Procedures for Minors

The HHS has deemed transgender procedures to be neither safe nor effective as a treatment for children with gender dysphoria.

The U.S. Department of Health and Human Services building in Washington on March 27, 2025. Kayla Bartkowski/Getty Images

A coalition of 19 Democrat-led states and the District of Columbia is suing the U.S. Department of Health and Human Services (HHS) over proposed measures aimed at preventing federal dollars from being spent on transgender procedures for minors.

The lawsuit was filed on Dec. 23 in Oregon, and it names the HHS, its secretary, Robert F. Kennedy Jr., and its inspector general as defendants.

At issue is a pair of proposed rules from the HHS’s Centers for Medicaid and Medicare. The first would prohibit doctors and hospitals from receiving federal Medicaid reimbursement for transgender-related treatments for children and adolescents, ranging from puberty-suppressing drugs to cross-sex hormones to surgical procedures such as breast removal.

The second rule would block all Medicaid and Medicare funding for any services at hospitals that provide such treatments to minors. Kennedy has declared that these interventions fail to meet professionally recognized standards of care, deeming them “neither safe nor effective as a treatment modality” for gender dysphoria or related conditions in young people.

“This declaration is a clear directive to providers to follow the science, and the overwhelming body of evidence that these procedures hurt, not help, children,” Kennedy said on Dec. 18, when he announced the department’s intention to move forward with the changes.

The proposals are currently undergoing a 60-day public comment period. If finalized, they could have a far-reaching impact across the nation, including in states that have laws in place guaranteeing protection for those providing or seeking such treatments, given that virtually all hospitals rely on Medicare, which covers older adults and people with disabilities.

In their complaint, the suing states contend that Kennedy exceeded his authority by trying to set a “national standard of care.” No statute, they say, allows the secretary to “unilaterally declare” that a category of treatment is “not safe and effective” and thereby exclude it from the Medicare program.

The states also accuse HHS of encroaching on state powers to regulate health care, alleging that Kennedy’s declaration effectively seeks to rewrite state Medicaid plans by threatening to drastically reduce the number of eligible providers and by curtailing their “traditional authority under the Medicaid Act” to determine which providers may participate in their programs.

In addition, the coalition challenges the move on procedural grounds. They argue that federal law requires public notice and an opportunity for comment before substantive policy changes are made, and that Kennedy issued his declaration without following those requirements.

“Secretary Kennedy cannot unilaterally change medical standards by posting a document online, and no one should lose access to medically necessary health care because their federal government tried to interfere in decisions that belong in doctors’ offices,” New York Attorney General Letitia James, who co-led the lawsuit, said in a statement.

Joining James are the attorneys general of California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, Wisconsin, and the District of Columbia; as well as Pennsylvania Gov. Josh Shapiro, a Democrat.

A spokesperson for HHS declined to comment on the litigation.

In his declaration, Kennedy cited a 409-page HHS report analyzing treatments for pediatric gender dysphoria, which concluded that many interventions, including hormonal and surgical procedures, carry risks of significant harms such as infertility and reduced bone density. The report recommended psychotherapy as the preferred approach.

“Psychotherapy is a noninvasive alternative to endocrine and surgical interventions for the treatment of pediatric gender dysphoria,” it states. “Systematic reviews of evidence have found no evidence of adverse effects of psychotherapy in this context.”