Oregon — Oregon Attorney General Dan Rayfield joined a coalition of states Tuesday in suing the Trump administration over a new federal rule restricting Medicaid and Children’s Health Insurance Program funding for ‘gender-affirming care’ provided to minors.
The lawsuit challenges a rule finalized by the U.S. Department of Health and Human Services and the Centers for Medicare & Medicaid Services. The regulation is scheduled to take effect Oct. 13, 2026.
Under the rule, states would no longer receive federal reimbursement for certain gender-affirming treatments provided to Medicaid patients younger than 18 or CHIP patients younger than 19. According to the Oregon Department of Justice, the same medications and procedures could remain eligible for federal funding when prescribed to young people for other medical purposes.
The rule applies to puberty blockers, cross-sex hormones and surgeries intended to alter a young patient’s primary or secondary sex characteristics. Federal Medicaid reimbursement would be prohibited for patients younger than 18, while the CHIP restriction would apply to those younger than 19. Treatments for other medical purposes, disorders of sexual development and complications from earlier procedures would remain eligible. Mental-health services are also unaffected. Existing patients receiving cross-sex hormones would qualify for a six-month federally funded tapering period, but no similar extension applies to puberty blockers or surgery. States could continue financing the affected care exclusively with state money.
“Freedom means very little if the government can reach into your family’s private decisions and take it away,” Rayfield said. “Our office will continue to do everything we can to defend the right to keep these medical choices between patients, families and their doctors.”
The coalition argues that the federal government exceeded its legal authority by attempting to determine which treatments state Medicaid programs may cover. Its complaint contends that Congress historically gave states discretion to establish covered services within the requirements of the Medicaid and CHIP statutes.
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The states also allege that the rule improperly singles out transgender patients and substitutes a nationwide federal restriction for decisions ordinarily made by patients, parents and medical professionals.
HHS proposed the regulation in December 2025. The agency subsequently received more than 30,000 public comments, according to the Oregon Justice Department. The department said more than 90 percent opposed the proposal, including comments submitted by Rayfield and other state attorneys general.
The press release announcing the lawsuit did not include the Trump administration’s response to the coalition’s claims. The administration has pursued several policies restricting federal support for gender-transition procedures involving minors, generally arguing that such interventions require stronger safeguards and should not receive federal funding.
This is Rayfield’s third lawsuit challenging Trump administration policies affecting gender-affirming care. In March, a court blocked an administration effort to withhold Medicare and Medicaid funding from hospitals providing the treatments. Another court in August struck down a rule removing such care from the Affordable Care Act’s essential health benefits, according to the Oregon Justice Department.
Oregon law separately protects access to ‘gender-affirming care’, meaning the federal rule primarily affects how eligible services are financed through Medicaid and CHIP rather than whether providers may legally offer them in the state.
The lawsuit was filed by the attorneys general of Oregon, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, Rhode Island, Vermont, Virginia, Washington and Wisconsin, along with the District of Columbia and Pennsylvania’s governor.
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