The Trump administration will not finalize the rule that threatened to strip every dollar of Medicare and Medicaid funding from any hospital in America providing gender-affirming care to patients under eighteen, according to an official document obtained by NPR on Monday. The retreat is real, and the people who forced it earned it: 30,893 public comments, formal opposition from the American Medical Association and the Children’s Hospital Association, and a wall of legal objections the administration’s own lawyers apparently found persuasive.
But the rule was never in effect — and by the time it died, it had already accomplished most of what it was written to do. More than forty hospitals across the country stopped or paused care for trans youth while the threat hung over them. Nothing about this week’s news reopens a single one of those clinics.
The Centers for Medicare and Medicaid Services — the federal agency that pays for the health coverage of roughly 150 million Americans — published the proposed rule on December 19 under the title “Prohibiting Sex-Rejecting Procedures for Children.” The mechanism was a “condition of participation”: the list of baseline requirements a hospital must meet to bill Medicare and Medicaid at all, which historically has governed things like nurse staffing ratios and whether the emergency generator works.
This rule would have added a new condition — no puberty blockers, no hormones, no surgery for any patient under eighteen, no matter who paid for the care. A children’s hospital that treated a single teenager on a family’s private insurance could have lost the federal money that runs its cancer floor and its emergency room.
Asked about the reversal, CMS told NPR that it “does not comment on future rulemaking or speculate on potential actions,” and then commented anyway: “The Trump Administration rejects ideologically driven surgical interventions on vulnerable children.” Surgery is vanishingly rare for transgender patients under eighteen. The rule the agency just shelved covered all gender-affirming care, which for minors mostly means counseling and, later, medication — a gap between the stated target and the actual text that ran through the entire December package.
Sam Bagenstos, who served as general counsel at the Department of Health and Human Services under President Biden and now teaches at Michigan Law, told NPR the decision amounts to “a victory for people who are defending the rights and interests of trans people.” He delivered the warning in the same breath: “But I don’t think it indicates a more general retreat from the aggressive posture of the Trump administration.” Both halves deserve attention, because the second half is where the story actually lives.
A rule, it turns out, accomplishes a great deal without ever becoming law.
Forty hospitals
The threat started emptying clinics almost immediately. Children’s Hospital Colorado suspended its gender-affirming care program in January, citing the mounting federal pressure. Rady Children’s in San Diego, the largest children’s health system in California, stopped prescribing hormone therapy to patients under nineteen. Children’s Minnesota halted treatment the same month.
By early February, STAT counted more than forty hospitals nationwide that had stopped or paused some form of gender-affirming care for young people, and HHS General Counsel Mike Stuart had referred six children’s hospitals — including Lurie Children’s in Chicago and the Children’s Hospital of Philadelphia — for federal investigation. None of these hospitals was violating any law. The rule that threatened their funding never took effect. No court ever ordered a clinic closed. Their lawyers simply did the math on a nine-figure funding cliff and read the room.
Then the Justice Department started converting fear into signatures. In May, Texas Children’s Hospital in Houston agreed to pay a $10 million penalty, permanently cease providing gender-affirming care to minors, and open the country’s first clinic dedicated to detransition.
A month later, the department announced a resolution with the Cleveland Clinic: a decades-long commitment to stop providing the care, $308,000 to resolve allegations that it had submitted false billing codes to Ohio Medicaid, and $2 million set aside for detransition care. The billing claims were allegations only — the department’s release acknowledges there was no determination of liability, and the Cleveland Clinic denied all of them. The clinic signed anyway.
In the press release announcing that settlement, the Justice Department described its own project with unusual candor: a national investigation into “sex-rejecting procedures on minors (often euphemistically referred to as ’gender-affirming care’)” — a federal press release informing the reader, in the government’s own voice, that the medical profession’s term for this care is a euphemism. Brett Shumate, the assistant attorney general who runs the department’s Civil Division, thanked the two hospital systems for choosing to be “part of the solution, not part of the problem,” and promised that the department’s work is “far from over.”
The rule that drove hospitals toward those settlements died on Monday. The Cleveland Clinic’s commitment runs into the 2040s.
Colorado
What happened in Colorado over the past two months is the cleanest demonstration anywhere in the country of why this week’s retreat gives back so little. On May 18, the Colorado Supreme Court ruled 5–2 that Children’s Hospital Colorado had likely violated the state’s antidiscrimination law when it suspended care for trans youth, and it ordered the hospital to resume.
The hospital resumed — on paper. In June, it reported that not one of its physicians was willing to provide the care, because a federal grand jury in Fort Worth, Texas, had begun issuing criminal subpoenas to doctors who do this work, and no doctor wanted to become the test case.
A state supreme court can order a hospital to open a clinic. It cannot order a physician to walk into it.
Fort Worth
That Fort Worth grand jury explains more than the empty clinic in Colorado. In May, the Justice Department used it to subpoena NYU Langone for the identities and complete medical records of every patient the health system had treated for gender dysphoria under the age of eighteen, reaching back to January 2020 — a demand that turned on no individual case and no named suspect, just a category of children the government wanted identified.
Judge Katherine Polk Failla of the Southern District of New York blocked the subpoenas on June 24, in a lawsuit brought by the ACLU, the New York Civil Liberties Union, and Lambda Legal. The government, she found, had mounted “a concerted effort to obtain deeply private information about an entire class of individuals without their knowledge or consent.”
You do not need to hold any particular view of puberty blockers to find that chilling. Whatever the argument about the medicine, federal prosecutors assembling a named list of transgender teenagers out of hospital charts is a different kind of project — one that requires only the belief that the government has no business knowing which thirteen-year-olds went to which doctor’s appointments, a belief most Americans of every politics still hold.
December 2028
The shelved rule was shelved, not killed. Nobody withdrew it. The administration’s own regulatory agenda still lists a final action date for the rule: December 2028, which happens to be the month before President Trump leaves office.
And the companion rule that CMS published the same December day is very much alive. That one bars federal Medicaid dollars from covering gender-affirming care for patients under eighteen — and Children’s Health Insurance Program dollars for patients under nineteen — and it sits in final review right now, on track to take effect within weeks. It drew 34,960 public comments, more than the rule the administration dropped.
So the government has walked away from the version that would have reached every family and kept the version that reaches only families on public insurance. In the twenty-three states where this care remains legal, a kid on a parent’s private plan keeps her doctor, and a kid on Medicaid loses hers. Nobody in Washington had to say that part out loud. Nobody did.
The third piece of the December package fared worst of all. Health Secretary Robert F. Kennedy Jr.’s declaration rewriting the medical standard of care by personal decree was vacated as unlawful in April by Judge Mustafa Kasubhai in Oregon, who called it one more example of “how a leader’s wanton disregard for the rule of law causes very real harm to very real people.” As of this week the administration has not appealed. It has, however, deleted the December press release announcing all three actions from the HHS website, along with the Kennedy declaration itself — an agency quietly disposing of the evidence that it made a policy at all.
The playbook
Why did the administration fold on its most sweeping rule? Because the rule was illegal, loudly and obviously so. Bagenstos, who spent years administering these programs, laid the problem out for NPR: the Medicare Act forbids using Medicare and Medicaid to control how medicine is practiced within a state, because regulating the practice of medicine belongs to the states. Conditions of participation exist to keep the generators running and the wards staffed; by his account, no administration of either party had ever tried to use them to prohibit a treatment for a particular class of patients. Thirty thousand commenters and two of the largest medical organizations in the country said the same thing on the record, and the administration’s lawyers could count.
Which leaves the uncomfortable lesson of this week, and it is the opposite of the one in the headline: the pressure campaign worked and the law did not. Katie Keith, who directs the Health Policy and the Law Initiative at Georgetown Law, told NPR the retreat “should give hospitals more confidence to either resume or continue offering the care,” adding the sentence that ought to sting every hospital general counsel in the country: “I would argue that they should have been doing this all along anyway.”
She is right. The hospitals are unlikely to listen, because the hospitals were never afraid of the rule. They were afraid of the grand jury, the subpoena, the $10 million penalty, and the Justice Department press release with their name in the headline — and every one of those instruments survived this week intact. Kellan Baker, senior adviser for health policy at the Movement Advancement Project, put the administration’s posture to NPR in one line: it remains “prepared to use almost any means necessary.”
Run the dates forward and the machinery shows itself. CMS proposed the sweeping rule in December. Hospital lawyers did the math through the winter, and the clinics closed. The Justice Department signed its settlements in May and June, while the rule still hung over the table. And then the rule died quietly, on a Monday in July, in a document a reporter had to go get — having already banked nearly everything it was ever going to buy.
The retreat costs the administration nothing, and it will run the same play again, because the play does not require the rule to survive. It only requires the threat to be believed for a while.
Twenty-seven states. Forty hospitals. Twenty years.
Children’s Hospital Colorado has a clinic, a court order, and no doctors.
Also This Week
A trans man played a Greek warrior, and the internet lost a week. Oscar-nominated actor Elliot Page appears in Christopher Nolan’s The Odyssey as Sinon — the soldier who talks the Trojans into hauling the horse through the gate — and since the London premiere on July 6, a large slice of the right-wing internet has done nothing else. Oli London, The Post Millennial, and End Wokeness have been running the story on repeat, most of them misgendering Page in the headline while doing it. Strip away the noise and what remains is a director who has never needed anyone’s permission, casting the actor he wanted for the part. The film opens Friday.
A mainline Protestant denomination just called this care what it is. At its General Assembly in Milwaukee, the Presbyterian Church (U.S.A.) voted 441–30 to declare its support for access to medically necessary, evidence-based gender-affirming health care, and separately added sexual orientation and gender identity to the protected categories in its constitution. The Daily Wire headlined the vote as an endorsement of “transgender mutilation of kids” — although the commissioners had in fact struck the phrase “including minors” from the text, reasoning that “all individuals” already covers everyone. Better than fourteen to one, a hall full of Presbyterians looked at the same treatments the Justice Department calls “sex-rejecting procedures” and called them health care.
The UK guidance is not the win the headline promised. England’s Department for Education issued new schools guidance saying staff need not automatically tell a parent when a child raises questions about gender, and much of the coverage framed it as the government declining to force schools to out their students. The document itself is narrower than that. Where a student asks to change a name or a pronoun, schools are still expected to bring parents in “in most cases,” and ministers strengthened the language so that parents’ views carry “great weight” in every decision. The confidentiality protects only the child who says something and asks for nothing — and that describes very few children.
Excellent piece. Thank you for your journalism.
A little bit of light