California Legislative LGBTQ Caucus Denounces Trump Administration’s Medicaid/CHIP Rule, Calls for State-Only Billing Pathway to Protect Continuity of Health Care

FOR IMMEDIATE RELEASE

California Legislative LGBTQ Caucus Denounces Trump Administration’s Medicaid/CHIP Rule, Calls for State-Only Billing Pathway to Protect Continuity of Health Care

SACRAMENTO, CA — The California Legislative LGBTQ Caucus issued the following statement in response to the Trump Administration finalizing a rule that bars federal Medicaid and Children’s Health Insurance Program (CHIP) funding for medically necessary transgender health care: 

“Yesterday, the Trump Administration has once again put politics ahead of patients by barring federal Medicaid and CHIP funding for medically necessary gender-affirming health care for transgender youth.

Transgender youth deserve the same access to health care as every other young person. Decisions about health care should be made by patients, their parents, and their doctors – not politicians.

This cruel policy will make it harder for families to access medically necessary health care and will disproportionately harm low-income families who rely on Medicaid and CHIP for their health coverage. It is deeply troubling to see the federal government use its power to interfere with the doctor-patient-family relationship and take away access to care that leading medical professionals recognize as necessary.

California must meet this moment with action. The LGBTQ Caucus applauded the state’s $26 million investment to stabilize and expand California’s gender-affirming care provider network through provider support, workforce recruitment and retention, clinic infrastructure, operational assistance for providers absorbing displaced patients, and malpractice insurance support. However, we were unable to secure the $1 million set-aside we sought to establish a state-only Medi-Cal coverage and billing pathway for gender-affirming health care. 

That state-only pathway would help ensure continuity of care for transgender Californians regardless of federal funding restrictions and, with today’s action by the Trump Administration, it is needed now more than ever. We look forward to working with our legislative colleagues and the Administration to secure this pathway before the end of the 2026 legislative session. California must ensure that federal attacks on health care do not become barriers to care for transgender young people and their families here in our state.”

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ADDENDUM: 

The LGBTQ Caucus has sent the following request calling for urgent action in response to the CMS Medicaid/CHIP final rule in order to ensure continuity of health care in California. 

RE:       Urgent Request for Emergency Backfill to Protect Access to Transgender Health Care in Response to Federal Cuts

Dear Governor Newsom, Pro Tem Limón, Speaker Rivas, Chair Laird, and Chair Gabriel:

On behalf of the California Legislative Lesbian, Gay, Bisexual, Transgender, and Queer (LGBTQ) Caucus, we write to respectfully urge you to take quick action to appropriate $10 million in response to the U.S. Centers for Medicare and Medicaid Services (CMS) final rule published on August 13, 2026 prohibiting federal Medicaid and Children’s Health Insurance Program (CHIP) funding from being used to pay for critical gender-affirming medical care, including hormonal therapy and surgical care, for young people in Medi-Cal programs. The rule will take effect on October 13, 2026 – less than two months away. 

This additional funding in the current budget year will ensure that, in the short-term, medically-necessary and legally protected health care can continue for transgender youth that rely on Medi-Cal. Additionally, we request your commitment to work with us during the Fall to develop a sustainable state-only billing pathway to maintain reimbursement for Medi-Cal providers that are committed to providing this health care, even in the face of hostile federal actions.

Medi-Cal and CHIP are lifelines for thousands of transgender Californians and their families, and the devastating impacts of these cuts cannot be understated. California is home to the largest transgender, gender-diverse, and intersex (TGI) population in the nation, including an estimated 263,700 transgender adults and 84,600 transgender youth. The state has long led the country in recognizing gender-affirming health care as medically necessary, evidence-based treatment essential to the health and well-being of TGI people. Under California law, individuals are guaranteed access to medically necessary gender-affirming health care without discrimination, and state-regulated Medi-Cal and all Medi-Cal managed health plans are required to cover medically necessary gender-affirming health care for adults and youth. 

We are grateful to you for the historic investments included in this year’s Budget Act to protect and strengthen TGI health care in California in the face of growing federal attacks. However, the $26 million secured in this year’s budget to establish the TGI Health Care Fund was designed to provide operational support to sustain California’s gender-affirming health care provider network and infrastructure; and the $30 million included to replenish the Uncompensated Care Fund is used to compensate providers of abortion, contraception, and gender-affirming health care for individuals below 400% FPL who are uninsured or otherwise not eligible for Medi-Cal programs. Neither program was intended to backfill provider reimbursements for services to patients enrolled in Medi-Cal impacted by this new rule. A set-aside for a state-only billing pathway was asked for in the original request for the TGI Health Care Fund, but that set-aside was not ultimately included in the enacted budget. Sweeping funding from the TGI Health Care Fund or the Uncompensated Care Fund to cover the losses from this new rule will make it impossible for these existing programs to accomplish their intended purposes, further exacerbating the problem. Without immediate action from the state to appropriate additional dollars in response, reimbursement for providers offering this medically-necessary health care will be disrupted – threatening access to gender-affirming health care for young people who rely on Medi-Cal programs, and potentially resulting in some providers permanently stopping care. 

Therefore, we are requesting that the legislature urgently allocate $10 million to cover the total annual amount of services impacted by this final rule, including the loss of federal funding before the end of this year’s session on August 31. Further, we request your commitment to partner with us to establish a separate, state-only billing pathway within Medi-Cal by next year.

Thank you for your careful consideration and attention to this urgent request. We in the LGBTQ Caucus look forward to continuing our work with you in the coming days to find both short-term and permanent solutions to ensure that all Californians can continue to access lifesaving health care. If you have any questions please do not hesitate to contact the undersigned members or contact our Assembly Caucus Consultant, Natalia Garcia, at [email protected], and Senate Caucus Consultant, Jacob Fraker, at [email protected].   

Sincerely,   

Assemblymember Chris Ward, Chair & Senator Sabrina Cervantes, Vice Chair

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About the California Legislative LGBTQ Caucus

California’s Legislative LGBTQ Caucus was formed in 2002 to create a forum for California Legislators to discuss issues that affect LGBTQ Californians and to further the goal of equality and justice for all Californians. California became the first state in the United States to officially form a caucus of openly-LGBTQ state legislators and continues to be a leader of progress for all Americans. In 2023, our membership hit a new milestone of 12 members, becoming one of the largest LGBTQ Caucus in the Nation, and continues to remain strong. Despite tremendous progress and an unprecedented swell of support for the LGBTQ community worldwide, there is still much work to do to protect and uplift the most vulnerable in our community. The LGBTQ Caucus strives to advocate for diversity and inclusion of all people, including differently abled bodies. Our Caucus is working diligently to support LGBTQ leaders that represent our community at the local, state, and federal levels.

For more information on the California Legislative LGBTQ Caucus, please visit https://lgbtqcaucus.legislature.ca.gov/ 

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