HHS Abandons Threat to Cut Hospital Funds Over Trans Care

The Trump administration has abandoned its most aggressive attempt to end gender-affirming care for transgender youth nationwide, according to an official document obtained by NPR. The Department of Health and Human Services will not finalize a proposed rule that would have blocked all Medicare and Medicaid funding to any hospital providing pediatric gender-affirming care, marking a significant reversal after months of intense public opposition.

Background of the Proposed Rule

In December 2025, HHS proposed a rule that would have made it a “condition of participation” in Medicare and Medicaid for hospitals to refrain from providing puberty blockers, hormone therapy, and surgeries to patients under 18 for gender transition. This unprecedented use of conditions-of-participation authority—historically reserved for enforcing basic health and safety standards like staffing ratios and emergency protocols—threatened virtually every hospital in the United States with the loss of federal funding.

Legal experts quickly questioned the rule’s validity. Sam Bagenstos, a professor at Michigan Law who served as HHS general counsel under the Biden administration, told NPR that the proposed rule appeared unlawful because “it violates the Medicare Act, which says that Medicare and Medicaid can’t be used to control the practice of medicine within the state.”

Public Opposition and Medical Community Response

The rule’s collapse followed an extraordinary wave of public opposition. More than 30,000 comments were submitted to the Centers for Medicare and Medicaid Services opposing the proposal, with nearly 20,000 coming from Human Rights Campaign members and supporters, according to the Human Rights Campaign.

Major medical organizations also pushed back. The American Medical Association and the Children’s Hospital Association both submitted formal comments urging the agency to rescind or withdraw the proposed rule. Major U.S. medical groups maintain that puberty blockers and sex hormones are safe and effective for transgender young people.

Kelley Robinson, president of the Human Rights Campaign, said in a statement: “It takes an avalanche of outrage to stop this administration from doing harm to innocent people, and together, we the people delivered to protect transgender youth across the country.”

A Tactical Retreat, Not a Policy Change

While advocates celebrated the reversal, experts cautioned that it does not signal a broader moderation of the administration’s approach to transgender healthcare. Bagenstos described the move as “a victory for people who are defending the rights and interests of trans people,” but added: “I don’t think it indicates a more general retreat from the aggressive posture of the Trump administration.”

Kellan Baker, senior adviser for health policy at the Movement Advancement Project, told The Advocate: “This administration may have checked itself in one of the most extreme expressions of its agenda and I think people should take solace in that. But at the same time, this administration is continuing to show that its ultimate goal is eliminating health care for trans people.”

Remaining Threats and Ongoing Actions

The abandoned rule is just one front in a broader campaign. A separate proposed rule that would bar federal Medicaid reimbursement for transgender pediatric care is in its final stage of review and appears on track to take effect in the coming weeks. The Department of Justice has also issued criminal subpoenas to hospitals seeking medical records of transgender youth, though many of those attempts have been blocked in court.

Meanwhile, gender-affirming care for youth is already banned in 27 states following a wave of legislation in recent years. More than 40 hospitals nationwide paused or ceased gender-affirming care for young people since January 2025, with at least nine stopping hormones and puberty blockers after the December 2025 proposed rules.

What This Means for Hospitals

Katie Keith, director of the Health Policy and the Law Initiative at Georgetown University, told NPR that the reversal “should give hospitals more confidence to either resume or continue offering the care.” Because the rule was never in effect, she argued, hospitals “should have been doing this all along anyway.”

However, the proposed rule could theoretically be revived. An entry in the Trump administration’s unified agenda sets a final action date for the proposed rule as December 2028, just before the end of President Trump’s term.

Looking Ahead

The reversal demonstrates that sustained public engagement can influence even an administration that has aggressively targeted transgender rights. But as Robinson cautioned, “Make no mistake, this is a reprieve, not a victory, and only for some.” With state-level bans, ongoing federal investigations, and a separate Medicaid rule nearing finalization, the landscape for transgender youth seeking healthcare remains deeply uncertain.