California Races to Protect Transgender Youth’s Care as Federal Funding Cut Looms

When A.W.’s husband lost his job, she was thankful the safety net preserved the family’s access to healthcare. Her eldest son had a team of doctors and therapists at Stanford’s specialty gender clinic; losing that support team, she said, would have been traumatic. The clinic accepted Medi-Cal patients.

Now, California is racing to keep children like A.W.’s son from losing access to gender-affirming care after the federal government moved to cut off funding for those services. State lawmakers are scrambling to approve emergency funding in the last days of the legislative session, even as LGBTQ advocates and parents argue California had months to prepare for the change — and may still fail to prevent a gap in care.

Federal Rule Change Threatens Coverage

This month the Centers for Medicare and Medicaid Services finalized a rule prohibiting federal reimbursement for gender-affirming care for minors. It takes effect Oct. 13. Roughly 1,500 transgender and gender-nonconforming children on Medi-Cal could lose access to puberty blockers, hormones and related care if the state doesn’t act.

Lawmakers want an emergency $10 million to replace the lost federal funds. The money would buy time for the state to create a separate funding pathway for transgender kids that complies with federal rules, though the Department of Health Care Services says that could take up to a year.

A funding pathway would keep state dollars separate from federal dollars, and allow Medi-Cal children to keep receiving care without disruption. Without it, transgender and gender-nonconforming youth could lose access to ongoing medical treatments.

Lawmakers Push for Emergency Funding

“They’re low-income Californians who need support arguably the most, and Medi-Cal is their lifeline to access that care,” said Assemblymember Chris Ward, a Democrat from San Diego and chair of the LGBTQ caucus, which is fighting for the money. “We need to stand up for them.”

Ward said the budget, which addressed California’s fourth consecutive deficit, didn’t have “a nickel to spare,” and because federal rules hadn’t been finalized at the time, the Medi-Cal funding commitment wasn’t locked in.

But some LGBTQ organizations and parents, including A.W., doubt California’s Medi-Cal agency can stand up a separate program in under six weeks.

Parents and Advocates Voice Concerns

A.W., who moved from Virginia to the Bay Area, said her son began seeing a therapist at age 8 and received his first puberty blocker a year and a half later. Medi-Cal allowed her son to keep seeing the same doctors when her husband’s startup went under two years ago. Her second child also came out as transgender last year.

A.W. said a gap in care would force her son to medically detransition, and that it’s “unacceptable that the state wasn’t prepared.”

Arne Johnson, an organizer with Rainbow Families Action, called the state’s statement misleading, saying “not a penny of it is going to backfill Medi-Cal at all.”

Laura Sheckler, budget and policy director at the California Primary Care Association, questioned how the state will ensure care is available on Oct. 13 when the rules go into effect.

State Response and Next Steps

Advocates had warned California’s Medi-Cal agency for eight months about the federal rule change and believed state leaders had set aside money during June budget negotiations. The June budget included $56 million for gender-affirming services and reproductive healthcare, but language to create a separate state-only Medi-Cal funding program was removed.

The Department of Health Care Services did not answer questions about why the money wasn’t earmarked for Medi-Cal and whether there would be a gap in services. A finance department spokesperson said the administration was “aware of this particular issue” but had no updates.

The California Department of Health and Human Services said on social media it remains committed to ensuring access to medically necessary care.

This article was supported by the California Health Care Foundation (CHCF).