Washington could lose about $1 million a year in federal Medicaid funding if a Trump administration rule takes effect Oct. 13.

The rule would strip reimbursement for gender-affirming care provided to minors.

Attorney General Nick Brown joined a coalition of 21 states and the District of Columbia in a lawsuit filed Sept. 2 in U.S. District Court in Massachusetts, challenging the rule as unlawful federal overreach, The Olympian reported.

"The federal administration is once again claiming powers it does not have … in order to foreclose healthcare options that should be left to Washington youth, their doctors and their families," Brown said in a Sept. 2 statement from his office.

The rule, published Aug. 13 by the Centers for Medicare and Medicaid Services (CMS), bars states from using federal Medicaid dollars to cover puberty-suppressing medications, hormone therapy and surgical procedures when used to treat gender dysphoria.

The ban applies to patients under 18 in Medicaid and under 19 in the Children's Health Insurance Program (CHIP).

Those same medications remain federally reimbursable when prescribed for other diagnoses, such as precocious puberty or uterine fibroids, according to the coalition's complaint.

The U.S. Department of Health and Human Services (HHS) proposed the rule in December 2025. More than 90% of the 30,000 public comments opposed it, according to The Olympian. HHS finalized the rule.

What the lawsuit alleges

The complaint names HHS Secretary Robert F. Kennedy and CMS Administrator Dr. Mehmet Oz as defendants.

It argues the rule violates the Administrative Procedure Act, exceeds CMS's statutory authority, conflicts with the Affordable Care Act and Medicaid statutes, and violates the Constitution's Spending Clause.

CMS itself acknowledged in the rule that it had never before relied on the cited statutory provisions to impose a purpose-based restriction on federal reimbursement for a specific category of services, the complaint states.

The coalition argues the rule sets a precedent allowing the executive branch to override individualized medical judgments with a blanket prohibition on reimbursement for care it opposes.

No hearing date appears in court records.

Washington's existing protections

Washington state law already requires health insurers to cover medically necessary gender-affirming care and bars discrimination based on gender identity, under RCW 74.09.675.

Those protections extend to plans through the state Health Care Authority and Medicaid.

The state's Shield Law, enacted in 2023, protects anyone who travels to Washington for gender-affirming care from civil or criminal actions in states where such care is restricted.

In 2023, the law was invoked when the Texas attorney general sought records from a Washington children's hospital. The records were not turned over.

Brown's office said Washington would absorb the roughly $1 million annual cost if the federal rule stands. No Thurston County-specific data on affected Medicaid enrollees is publicly available.

The rule takes effect Oct. 13. The case is listed as Case 1:26-cv-14051 in federal court records.