Senate Republicans Want Democrats to Trade Americans’ Healthcare for Permanent Restrictions on Gender-Affirming Care

The new Republican proposal would permanently ban Medicaid and ACA coverage of gender-affirming care in exchange for a few years of weaker healthcare subsidies.

Republican Senators Bill Cassidy (left) and Mike Crapo (right) | Images: Wikimedia Commons

Yesterday, Republican Senators Bill Cassidy (R-LA) and Mike Crapo (R-ID) released their plan for the expiring Affordable Care Act (ACA) subsidies. The subsidies, first passed by Democrats as part of their 2021 spending bill, have quickly become a flashpoint in ongoing Congressional budget negotiations. Except, instead of extending them like Democrats have demanded, this bill takes an entirely different approach: privatisation. As part of this proposal, Americans that are enrolled in ‘Bronze’ and ‘Catastrophic’ ACA plans—which have the highest deductibles out of the 5 categories available—would be granted a “Health Savings Account,” or HSA, to shoulder the increased healthcare costs.

The amount given to each person wouldn’t be much: $1,000 per year for someone between the ages of 18 and 49, and $1,500 per year for someone between the ages of 50 and 64. Consistent with nearly 50 years of federal policy, the bill prohibits the spending of HSA funds on abortions except in limited cases, but, unlike previous healthcare bills, it introduces a second restriction: gender-affirming care.

Under the proposal, transgender Americans would not be able to put the amount in their HSA towards gender-affirming care, even when it is classified as medically necessary. For contrast, the preceding abortion provision does contain exceptions for when doctors determine it is a medical necessity. In other words, it aims to codify Republicans’ idea that gender-affirming care is inherently a choice and should not be ‘funded’ by taxpayers.

And this time, they’re taking it even further: the final section of the bill, titled “Preventing Wasteful Spending,” aims to cut all federal funding from gender-affirming care. Except unlike previous attempts to tack on these provisions to yearly funding and appropriations bills, Senators Cassidy and Crapo thought of a different solution: leveraging transphobia against Americans’ healthcare.

Under their proposal, the Affordable Care Act would be permanently amended with a provision banning gender-affirming care from being considered an Essential Health Benefit (EHB) by any ACA plans starting in 2027. If this seems familiar, that’s because it is: this provision was included in initial versions of the Big, Beautiful Bill, and back in June, the Department of Health and Human Services finalised a rule that actually did exactly this.

As part of this change, beginning in 2026, ACA-regulated insurance plans will not be able to cover gender-affirming care unless it’s separately mandated by individual states. And unless transgender healthcare is included in the state’s self-selected EHB-benchmark plan (which is only true in 5 states: California, Colorado, New Mexico, Vermont, and Washington), the states that mandate this coverage will need to shoulder the costs themselves. As things stand, because this is a policy, it can be rescinded by the next Democratic administration. But if it’s codified into law like this bill aims to do, removing it would require Congressional action.

It gets even worse: the bill also goes after Medicaid and CHIP coverage of gender-affirming care. This provision—which is a word-for-word copy of the one that was removed from the Big, Beautiful Bill in July—would ban federal reimbursements for gender-affirming care provided under Medicaid or CHIP (Children’s Health Insurance Program). While this wouldn’t be an outright ban on coverage, because, as these are joint federal-state programs, individual states set their own coverage policies, it would force states to bear the costs of gender-affirming care. In the handful of Republican states whose Medicaid plans do still cover transgender healthcare services, this may very well be all it takes for these policies to change. For reference, here’s a map of current Medicaid coverage:

For sources, tables, and maps for other issues, head to Transitics’ CATPALM page.

To understand why the inclusion of these provisions here is much more concerning than the previous attempts, it’s important to look at why they haven’t passed yet. As mentioned, both of these provisions were included in the Big, Beautiful Bill at one point, but they both ended up being removed. Why? Because the Big, Beautiful Bill was a reconciliation bill—a once-per-year bill that requires a simple majority—it was subject to the Byrd Rule, which prohibits things not substantially related to spending from being included.

What violates the Byrd Rule is determined by Elizabeth MacDonough, the non-partisan Senate Parliamentarian, and these rulings are usually consistent. In this case, the transphobic provisions were removed after the Parliamentarian found them to target policy more than spending. As such, we now know that the opposite must also be true: amending Medicaid, CHIP, and the ACA to make them less transphobic also violates the rule, which means that if they are passed as part of a healthcare deal, removing them will require 60 votes. Given our current political climate, it may be decades before this happens.

While this bill isn’t going to pass without Democratic support, Republicans have already demonstrated their willingness to get behind it. Senate Majority Leader John Thune (R-SD) announced today he will put it up for a vote on Thursday alongside Democrats’ proposal to extend the subsidies for three years. And even if it ends up failing, which at this stage is fairly likely, it shows that transphobia is a priority for Republicans in these healthcare negotiations.

Although Senate Democrats recently indicated that they will continue to hold their ground on anti-trans riders, a handful have demonstrated that this resolve is not absolute. Hypothetically speaking, should Republicans offer to extend the subsidies as-is for a year in exchange for the passage of these seemingly permanent anti-trans provisions, will Democrats fold? Because in all likelihood, that may be the kind of choice that Democrats will eventually face.

And then, next year, after that hypothetical deal expires and these negotiations are needed again, Republicans will no longer have an incentive to extend the subsidies because they already got what they wanted. They’ll be free to use these provisions as a bargaining chip for as long as they see fit.

Make no mistake: if Democrats give up trans people in exchange for a temporary measure, it will be like tearing down someone’s home and using the wood to light a fire. That cannot be allowed to happen.