• As lawmakers considered U.S. President Donald Trump’s One Big Beautiful Bill in mid-2025, rumors spread online that the legislation could reduce access to gender-affirming care for transgender patients with private health insurance. 
  • Separately from the OBBB, the U.S. Centers for Medicare and Medicaid Services (CMS) proposed a new rule revising Affordable Care Act-related standards that also has implications for gender-affirming care. Under the proposed rule, private health insurers wouldn’t be able to cover “specified sex-trait modification procedures” as an “essential health benefit” (a category of care with certain affordability and accessibility protections). 
  • Though the budget bill is not yet law as of this writing, experts have said if it does become law, it would effectively codify a version of the proposed new CMS rule, possibly setting a “particularly dangerous precedent.” 
  • Neither provision means insurers wouldn’t be able to cover gender-affirming care — instead, the provisions would prohibit covering such care under the financial protections required for essential health benefits. The impacts would differ based on plan type, but simply put, trans people would likely experience higher costs and reduced access to care. 

As U.S. President Donald Trump’s One Big Beautiful Bill made its way through Congress in June 2025, social media users discussed whether the legislation could reduce access to gender-affirming care for transgender patients with private health insurance. 

After the U.S. Centers for Medicare and Medicaid Services (CMS) separately released a proposal revising Affordable Care Act-related standards and requirements, posts alleged on platforms such as Bluesky that the revisions could limit or prohibit coverage of gender-affirming care in certain private insurance plans. 

While many news outlets have covered the budget bill’s intended ban on gender-affirming care for those on Medicaid, there has been very little coverage of how the Trump administration’s policies might impact trans people with private health insurance. 

It is accurate to say that the CMS passed a rule prohibiting insurers from covering medical or pharmaceutical interventions used in gender-affirming care as an “essential health benefit,” a category of care with specific accessibility and affordability protections. The rule was finalized on June 20, 2025, and will begin to affect insurance plans starting in 2026. Experts say the provision would reduce access to trans-specific health care and make that care more expensive for patients on private insurance. 

Furthermore, the version of the OBBB passed by the House on May 22, 2025, includes a similar provision. The budget bill is not yet law as of this writing and the Senate is still amending its version. Both chambers must pass the same version of the bill before the president can sign that version into law. 

Enshrining the removal of protections into law through the bill would set a “particularly dangerous precedent,” said Kellan Baker, executive director of The Institute for Health Research and Policy at Whitman-Walker, an LGBTQ+ health advocacy group. “It would be the first time that Congress has ever legislated on availability of health care for trans adults,” Baker said. “It is entirely possible this goes to court.” 

The CMS, on Page 79 of its rule, argued in favor of its provision because under the law, “the scope of [essential health benefits] must be equal in scope to the benefits provided under a typical employer plan, and coverage of sex-trait modification is not typically included in employer-sponsored plans.” (Among large employers, about a quarter cover gender-affirming care, according to a 2023 survey by a nonpartisan health policy group, the Kaiser Family Foundation.) 

Speaker of the House Mike Johnson, a Louisiana Republican, did not respond to an inquiry as to lawmakers’ rationale for removing these protections. 

The policies under the One Big Beautiful Bill

Here is the relevant provision in the House’s version of the budget bill, under section 44201(h) (emphasis ours): 

(h) Prohibiting Coverage of Gender Transition Procedures as an Essential Health Benefit Under Plans Offered by Exchanges.

(1) In general. –Section 1302(b)(2) of the Patient Protection and Affordable Care Act (42 U.S.C. 18022(b)(2)) is amended by adding at the end the following new subparagraph:

C) Gender transition procedures. –For plan years beginning on or after January 1, 2027, the essential health benefits defined pursuant to paragraph (1) may not include items and services furnished for a gender transition procedure.”.

Under the bill, a “gender transition procedure” includes puberty blockers, hormone replacement therapy and a wide-ranging list of surgeries, including chest and genital reconstruction surgeries, as well as vasectomies, hysterectomies and more — but only “when performed for the purpose of intentionally changing the body of such individual (including by disrupting the body’s development, inhibiting its natural functions, or modifying its appearance) to no longer correspond to the individual’s sex” (see Section 44201(f)). 

By prohibiting insurers from covering gender-affirming care as an essential health benefit, these specific interventions can no longer be subject to the financial protections essential health benefits receive, said Katie Keith, director at the Center for Health Policy and the Law at Georgetown University. Insurance companies can still cover the care, but the provision “targets trans people for higher health care costs,” Keith said. 

The most recent Senate version available as of this writing does not include the provision, but that doesn’t mean the Senate won’t add it in later, Keith said. 

Similarly, the CMS rule says “an issuer of coverage subject to” essential health benefit requirements “may not provide coverage for specified sex-trait modification procedures” as an essential health benefit, beginning in 2026, per Page 6. 

The rule defines “sex-trait modification procedures” on Page 81 (emphasis ours): 

In response to comments, we are finalizing at § 156.400 the addition of a definition of “specified sex-trait modification procedure,” which means any pharmaceutical or surgical intervention that is provided for the purpose of attempting to align an individual’s physical appearance or body with an asserted identity that differs from the individual’s sex either by: (1) intentionally disrupting or suppressing the normal development of natural biological functions, including primary or secondary sex-based traits; or (2) intentionally altering an individual’s physical appearance or body, including amputating, minimizing or destroying primary or secondary sex-based traits such as the sexual and reproductive organs. 

Such term does not include procedures undertaken (1) to treat a person with a medically verifiable disorder of sexual development, or (2) for purposes other than attempting to align an individual’s physical appearance or body with an asserted identity that differs from the individual’s sex. 

Multiple experts called the language used in both policies discriminatory because it bans essential health benefit protections for the same procedures and treatments anyone might receive as medically necessary care, but only when used to treat gender dysphoria in a transgender person. (According to the American Medical Association, “every major medical association in the United States recognizes the medical necessity of transition-related care for improving the physical and mental health of transgender people.”) 

“I can’t think of any other example where you have carved out treatment for a specific diagnosis and said, ‘It’s not subject to this financial protection,” Keith said. “This is unprecedented, and I think that’s why we have insurance companies and states saying, ‘How would you even do this?'”

What is an essential health benefit? 

The Affordable Care Act created a list of 10 essential health benefits nearly all private insurers in the “individual and small group markets” must cover — meaning insurers for people who buy health insurance on their own and for small businesses that purchase health insurance for their workers. 

“The whole purpose is you can’t sell this bare-bones policy that would leave people exposed to catastrophic costs or care gaps,” said Lindsay Allen, a health economist and policy researcher at Northwestern University’s Feinberg School of Medicine. 

Gender-affirming care is not explicitly listed as an essential health benefit under the ACA. But medical and policy experts say gender-affirming care falls under every essential health benefit category, meaning it doesn’t make sense to try to separate it out, as the legislation and the CMS rule attempt to do.

“The categories included in the Affordable Care Act are as broad as ‘prescription drugs’ and ‘mental health care,'” Keith said. “Anything you would need for gender-affirming care fits within those categories — puberty blockers, hormone therapy or prescription drugs. Even surgeries would be covered under inpatient care.” 

Prohibiting coverage of gender-affirming care under EHBs also could set up a conflict between federal and some state laws, experts said, that may lead to litigation. According to the Movement Advancement Project, as of this writing, 24 states explicitly prohibit excluding trans care in health insurance.

While large group market health plans — health insurance for large organizations — are not required to offer essential health benefits, most already do, Keith said. 

Furthermore, if any health plan, including large group plans, covers essential health benefits, that plan must cap out-of-pocket costs for those benefits — set at $10,150 for self-only coverage and $20,300 for family coverage for 2026 (see Page 2). In other words, once an enrollee pays that amount, insurance must cover the rest. As such, under the CMS rule and the Big Beautiful Bill, the out-of-pocket limit would no longer exist for gender-affirming care, leaving patients to foot the entire bill, regardless of cost, Keith said. 

What does this mean for people’s health care? 

The CMS, in its rule, stated that it did “not believe there is merit” to the argument that “unreasonable increases in out-of-pocket costs” may happen as a result of the agency’s rule, but acknowledged out-of-pocket costs may increase “for some consumers.” However, the agency said it believed any increase would align with the large employer market (see Page 84). 

But Baker said it is “hard to estimate the exact financial impact” this rule will have. 

“It’s also about the intentional undermining of the scientific consensus, and how important care is for trans people,” Baker said. “It has a concrete but hard to quantify negative impact on consumers, but it also really feeds into this false narrative that the administration is seeking to create.” 

Baker said insurance companies have increasingly started providing gender-affirming care in recognition of its medical necessity. But with the new provision, it is unclear whether that trend may reverse, and if some insurers might drop coverage. 

“I think there’s a lot of uncertainty that the federal government is intentionally injecting into state insurance markets and availability of coverage for this care,” Baker said. 

Morissa Ladinsky, a pediatrics professor at Stanford who used to be one of the few providers offering gender-affirming care for trans youth in Alabama, said that when care becomes cost-prohibitive for any trans person or youth awaiting care lose hope that they will receive it, “you will see and we have seen serious mental health declines,” Ladinsky said, pointing to both research and her personal experience.

“Hope is a part of health,” she said. 

Furthermore, experts noted lawmakers’ decision to list specific procedures in the budget bill could result in delays or obstacles for trans people seeking care for other reasons, such as a trans man getting a hysterectomy as treatment for ovarian cancer. The letter from attorneys general also expressed concern that the definitions of sex used in the CMS rule could block intersex people from receiving care they need, as they don’t fit into “male” or “female” categories. (CMS, for its part, said on Page 86 it fixed this issue by making exceptions for those with a “medically-verifiable disorder of sexual development.”) 

“At the end of the day, you need the care you need whether it’s transition-related or not,” said Allen, the health economist. 

In sum …

A Trump administration policy passed by a federal health agency will increase costs and reduce access to gender-affirming care for trans people on private insurance by removing certain protections, effective in 2026. 

The House passed a version of this policy in the Big Beautiful Bill, and if the bill passes the Senate, the president could sign it into law, thus codifying the policy. The effects may also have far-reaching consequences for other types of care, including for trans people seeking care unrelated to gender transition and intersex people.