A federal judge has struck down a Trump administration regulation that removed certain gender-affirming medical services from the Affordable Care Act’s (ACA) Essential Health Benefits (EHB), preserving important insurance protections for transgender Americans enrolled in ACA marketplace plans.
U.S. District Judge Nathaniel Gorton of Massachusetts ruled Aug. 14 that the Department of Health and Human Services exceeded its authority when it barred non-grandfathered individual and small-group insurance plans from treating specified gender-affirming procedures as essential health benefits. Gorton, appointed by President George H.W. Bush, granted summary judgment to a coalition of 20 states and Pennsylvania Gov. Josh Shapiro.
In addition to Pennsylvania, the other states that will be impacted by the ruling are California, Massachusetts, New Jersey, Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Michigan, Minnesota, New Mexico, Nevada, New York, North Carolina, Oregon, Rhode Island, Vermont and Wisconsin.
The Trump administration’s 2025 Marketplace Integrity and Affordability rule took effect for the 2026 plan year and defined “specified sex-trait modification procedures” broadly to include pharmaceutical and surgical interventions intended to alter or suppress sex characteristics to align a person’s body with a gender identity. The definition could encompass hormone therapy and gender-affirming surgeries, depending on their purpose.
While the rule did not categorically prohibit insurers from paying for those services, it removed them from the ACA’s essential health benefit protections. That distinction mattered because EHB services receive federal protections involving cost-sharing, annual and lifetime limits and, in subsidized marketplace plans, federal premium assistance. Insurers could still voluntarily cover gender-affirming care, and states could require coverage.
The court’s ruling vacated that provision, meaning the ACA protections were restored for the affected plans beginning immediately upon the Aug. 14 decision, rather than waiting for a new plan year. However, the ruling does not guarantee that every ACA insurer will cover every form of gender-affirming care; coverage remains subject to state requirements, plan terms and medical-necessity rules.
The potential scope is significant. The Kaiser Family Foundation (KFF) reported that only 0.11 percent of enrollees in non-grandfathered individual and small-group plans used what the administration called “sex-trait modification” services during 2022 and 2023. Among large employers, meanwhile, 24 percent reported covering gender-affirming hormone therapy in 2024, while 23 percent reported covering gender-affirming surgery in 2023.
The ruling comes as the administration continues pursuing restrictions elsewhere. Last week, Health and Human Services (HHS) finalized a separate rule cutting off federal Medicaid and Children’s Health Insurance Program (CHIP) funding for gender-affirming medical care provided to transgender young people, a policy scheduled to take effect Oct. 13 unless blocked by litigation.
The administration has defended its broader approach as an effort to protect children and prevent what it considers inappropriate medical treatment. The Centers for Medicare and Medicaid Services (CMS) said its 2025 ACA rule was designed to “lower premiums” and protect taxpayer money from “waste, fraud, and abuse.”
Washington Attorney General Nick Brown, whose state joined the lawsuit, called the court victory a defense of coverage consumers had been promised. “The federal government tried to illegally deny promised health coverage that Washingtonians rely on,” Brown said.
Massachusetts Attorney General Andrea Joy Campbell said the ruling prevents the administration from making care “more expensive and less accessible,” adding that gender-affirming care is “critical to the emotional and physical well-being” of transgender people.
Ultimately, the decision represents a significant legal setback for the Trump administration’s effort to restrict transgender healthcare, even as its separate Medicaid and youth-care policies remain in effect and face their own court challenges.
This story is brought to you by Rosedale Health and Wellness and Dudley’s Place.
