Attorneys General of Montana and Texas Sue HHS Over Gender Identity Inclusion in Medicaid Coverage

The Department of Health and Human Services (HHS) Secretary Xavier Becerra is the target of a lawsuit filed on Tuesday by the attorneys general of Montana and Texas. The rule mandates that states pay for “gender transition” procedures through their Medicaid programs, and it compels healthcare providers that receive federal funding to carry out such procedures even when doing so would violate state law.

The complaint, which was submitted on June 11 to the Tyler Division of the U.S. District Court for the Eastern District of Texas, asks the court to halt a new rule that HHS recently published in the Federal Register, changing the non-discrimination provisions of the Affordable Care Act (ACA) to include discrimination based on “gender identity” as well as “sex.”

The final rule, titled “Nondiscrimination in Health Programs and Activities,” implements Section 1557 of the Affordable Care Act in a way that largely undoes the 2020 version of the rule, which was adopted by then-President Donald Trump, while reinstating and building upon many of the 2016 regulations from the administration of then-President Barack Obama.

The regulation, which goes into effect on July 5, 2024, includes staggered implementation dates for health programs and activities that receive federal funding. It gives members of protected groups nondiscrimination safeguards regarding health care, such as making it illegal to refuse benefits, coverage, or program participation on the basis of racial, age, handicap, or sexual orientation—a concept that has been broadened to include “gender identity.”

The law forbids the rejection of “gender-affirming” care and expressly states that nondiscrimination protections based on “gender identity” and sexual orientation are guaranteed. 

Under Section 1557, the attorneys general of Texas and Montana object to what they describe as a “devastatingly drastic social change.” They contend that the policy essentially compels taxpayers in those jurisdictions to foot the bill for divisive medications and experimental surgeries—which they describe as practices that “inflict permanent harm”—that are performed on patients seeking “gender transition.”

Texas Attorney General Ken Paxton stated in a statement, “We are suing to stop the Biden Administration from withholding federal healthcare funds to force medical professionals to perform these experimental and dangerous procedures.”

In a statement, Montana Attorney General Austin Knudsen stated, “States should not be forced to foot the bill for treatments that are leaving people, even children, with irreversible damage.”

However, HHS claimed in a statement that the new final rule, which was announced on April 26, 2024, amounted to “bold action” to strengthen anti-discrimination safeguards.

“[Today’s rule] gives Americans nationwide a clear way to exercise their rights against discrimination when they visit their doctor, speak with their health plan, or interact with HHS-run health programs. It is a giant step forward for this country toward a more equitable and inclusive health care system,” Mr. Becerra said in a statement.

Additionally, according to HHS, the new final rule codifies that Section 1557’s ban on sex-based discrimination “includes LGBTQI+ patients,” adding protections against discrimination.