The federal government has stopped paying for the medicalization of children through Medicaid. New York's answer: keep doing it, and send the bill to state taxpayers.
The federal cutoff
A federal rule, CMS-2451-F, took effect October 13, 2026. It bars federal Medicaid money for puberty blockers, cross-sex hormones and surgeries on anyone under 18, and federal CHIP money for anyone under 19. Children already on cross-sex hormones can get federally funded doses for up to six months while they taper off. The rule doesn't stop states from paying with their own money.
New York: "continue to provide... as normal"
In a notice to Medicaid providers dated October 13, the New York State Department of Health told doctors and clinics to keep providing these services to children on Medicaid and Child Health Plus, the state's CHIP program. The cost "will be covered by state-only funding," the department wrote. "The State is committed to ensuring that beneficiaries continue to receive these services."
The notice updates an October 2 version that promised billing instructions later. The new instruction is simple: providers "should continue to bill as usual." The department says it will change its own systems behind the scenes so the state stays within the federal rule.
The notice doesn't say how many children are affected or what it will cost New York taxpayers.
New York isn't alone
At least nine other states have said they'll keep paying with their own money:
- California: a state-only grant program run by the Department of Health Care Access and Information (HCAI).
- Oregon: about 600 children on the Oregon Health Plan, paid directly by the state (Oregon Health Authority, Oregon Capital Chronicle; see our Oregon story).
- Washington: the Health Care Authority will pay with state-only funds (HCA notice).
- Massachusetts: paid from the state's $8.5 million Affirming Health Care Trust; about 550 MassHealth members 18 and under got hormones or puberty blockers last year (GBH News).
- Maryland: state money, as required by its 2023 Trans Health Equity Act (Maryland Medicaid).
- Illinois: state-only funds through June 30, 2027, then it goes to the budget process (Illinois HFS provider notice, as summarized by the Illinois Health and Hospital Association).
- Maine: claims paid with state-only funds, as state law requires (Maine DHHS).
- Vermont: state funds replace federal funds, with "nothing changing" for members (Vermont DVHA).
- New Mexico: puberty blockers and cross-sex hormones for ages 12 to 17 stay covered with state funds (NM Health Care Authority).
A few states went the other way:
- Virginia ended coverage on October 13 (Virginia DMAS).
- Montana ended coverage, with a taper for children already on cross-sex hormones (Montana DPHHS).
- Colorado suspended coverage until lawmakers act (Colorado Sun).
New York is also one of 21 states, plus the District of Columbia and Pennsylvania's governor, suing to overturn the rule in federal court in Massachusetts. Attorney General Letitia James joined the suit. As of today, no court has blocked the rule.
The bottom line
Washington decided federal taxpayers will no longer pay to put children on puberty blockers and cross-sex hormones or to operate on them. New York decided its own taxpayers will, and told providers to carry on as if nothing changed.
Cover photos: vial, U.S. Drug Enforcement Administration (public domain); scalpel, Dan Bollinger (CC BY-SA 4.0); both via Wikimedia Commons