Regulatory Changes for Gender-Affirming Care: What Insurers Need to Know

In late December 2025, the Centers for Medicare and Medicaid Services (CMS) announced two proposed regulatory changes regarding gender-affirming care for minors, potentially affecting coverage by federal programs. The first proposal aims to alter Medicare hospital conditions, restricting transgender youth access to gender-affirming care. Meanwhile, the second proposal suggests prohibiting Medicaid and Children’s Health Insurance Program (CHIP) funds for these services for minors. The proposed changes stem from a declaration by the Secretary of Health and Human Services, suggesting that specific gender-affirming procedures for minors diverge from recognized healthcare standards. Unlike the proposed rules, this declaration is immediately effective, posing risks that healthcare providers performing these procedures might face exclusion from federal healthcare programs. Such exclusion could substantially impact healthcare providers, as participation in these programs is often crucial for maintaining contracts with insurance carriers and providers. Implications for the Insurance Industry The insurance industry should closely monitor these regulatory developments due to potential implications for healthcare providers and insurers involved with federal health programs. AI-driven prior authorization delays and regulatory compliance requirements may increase scrutiny on medical practices concerning gender-affirming care. As the regulatory landscape evolves, industry professionals should stay informed about how these changes might affect coverage decisions and risk management strategies.