Michigan Attorney General Dana Nessel joined a coalition of 22 states in challenging the Trump administration’s attempt to prohibit states from using federal Medicaid funds for transgender care for low-income minors and some young adults. In their lawsuit, the coalition argues that since the creation of the Medicaid and Children’s Health Insurance Program (CHIP) programs in the 1960s, Congress has always granted states the authority to determine which services would be covered under their Medicaid and CHIP programs, subject only to limits set by statute. The coalition asserts that the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) are now acting without statutory authority or a reasoned basis to second-guess state Medicaid agencies’ reliance on individualized medical treatment decisions made by healthcare providers. Instead, based solely on CMS’s unilateral decision-making, the agencies are categorically excluding healthcare services from federal reimbursement only when provided to low-income transgender adolescents.
“Medical decisions should be made by parents, patients, and medical experts – not politicians,” said Nessel. “We remain committed to protecting the right of Michigan families to make these critical healthcare choices.”
In December 2025, HHS proposed a rule categorically prohibiting federal reimbursement for care for transgender Medicaid beneficiaries under age 18 and CHIP beneficiaries under age 19, despite covering the same healthcare treatment when provided to non-transgender youth. HHS received more than 30,000 comments on the proposal. More than 90% of the comments, including comments from Attorney General Nessel and a coalition of state attorneys general, opposed the rule. Despite this strong opposition, the broad medical consensus on the safety and efficacy of transgender youth healthcare, and strong state law guardrails to ensure high-quality care, HHS finalized the rule earlier this month, with an effective date of October 13, 2026.
In their complaint, Nessel and the coalition argue that the rule would set a troubling and unlawful precedent that the executive branch can, without congressional authorization, replace individualized judgments made by licensed medical practitioners with a categorical, agency-determined prohibition on reimbursement for healthcare it disfavors. The coalition argues that the rule runs counter to several federal and state laws. They also assert that the rule violates the Administrative Procedure Act and the Spending Clause of the U.S. Constitution.
Joining Nessel in filing the lawsuit are the attorneys general of California, Colorado, Connecticut, Delaware, the District of Columbia, Hawai'i, Illinois, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New York, Oregon, Rhode Island, Vermont, Virginia, Washington, and Wisconsin, along with the governor of Pennsylvania.
“Medical decisions should be made by parents, patients, and medical experts – not politicians,” said Nessel. “We remain committed to protecting the right of Michigan families to make these critical healthcare choices.”
In December 2025, HHS proposed a rule categorically prohibiting federal reimbursement for care for transgender Medicaid beneficiaries under age 18 and CHIP beneficiaries under age 19, despite covering the same healthcare treatment when provided to non-transgender youth. HHS received more than 30,000 comments on the proposal. More than 90% of the comments, including comments from Attorney General Nessel and a coalition of state attorneys general, opposed the rule. Despite this strong opposition, the broad medical consensus on the safety and efficacy of transgender youth healthcare, and strong state law guardrails to ensure high-quality care, HHS finalized the rule earlier this month, with an effective date of October 13, 2026.
In their complaint, Nessel and the coalition argue that the rule would set a troubling and unlawful precedent that the executive branch can, without congressional authorization, replace individualized judgments made by licensed medical practitioners with a categorical, agency-determined prohibition on reimbursement for healthcare it disfavors. The coalition argues that the rule runs counter to several federal and state laws. They also assert that the rule violates the Administrative Procedure Act and the Spending Clause of the U.S. Constitution.
Joining Nessel in filing the lawsuit are the attorneys general of California, Colorado, Connecticut, Delaware, the District of Columbia, Hawai'i, Illinois, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New York, Oregon, Rhode Island, Vermont, Virginia, Washington, and Wisconsin, along with the governor of Pennsylvania.
––––––––––––––––––––
Subscribe to the Legal News!
https://legalnews.com/Home/Subscription
Full access to public notices, articles, columns, archives, statistics, calendar and more
Day Pass Only $4.95!
One-County $80/year
Three-County & Full Pass also available
