California Seeks Emergency $10M to Replace Federal Funds for Transgender Youth Services
California lawmakers are requesting $10 million in emergency funding after CMS finalized a rule prohibiting federal reimbursement for gender-affirming care for minors, effective October 13, 2026. Approximately 1,500 transgender and gender-nonconforming children on Medi-Cal could lose access to puberty blockers, hormones, and related care without state action. The emergency funds would allow California's Department of Health Care Services up to one year to establish a separate state-funded pathway that keeps federal and state dollars separate while maintaining care access. Parents and LGBTQ advocates say they warned state officials for eight months about the federal funding cut and believed money was set aside during June budget negotiations, but now question whether California can implement a solution before the October deadline.
State Medicaid agencies nationwide may face similar federal funding restrictions and need to establish separate state-funded pathways to maintain coverage for specific benefits excluded from federal reimbursement.
Behavioral Health · Managed Care
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