Iowa Lawmakers Aim to Block Medicaid Funding for Gender Dysphoria Treatments

DES MOINES, Iowa (IOWA CAPITAL DISPATCH) – Iowa’s Republican legislators are attempting once more to enact a prohibition on Medicaid funds being used for gender-affirming care for transgender individuals in the state. This effort is now included within the draft budget proposals focused on health and human services initiatives.

A Senate subcommittee advanced Senate Study Bill 1237 On Wednesday, the HHS appropriations bill for fiscal year 2026 was introduced. This legislation contained provisions stating that funds designated for Iowa’s Medicaid program "must not be utilized for sex reassignment surgeries or treatments associated with an individual’s gender dysphoria diagnosis."

Iowa has previously tried to prohibit Medicaid coverage for gender-affirming care through legislation, but those efforts have been unsuccessful so far. overturned by the courts for breaching both the Iowa Constitution and the Iowa Civil Rights Act. The Iowa Supreme Court made a ruling in 2019. The state's refusal to provide two transgender women with transition-related care via Medicaid was deemed a violation of the Iowa Civil Rights Act. Additionally, in 2021, a Polk County District Court judge determined that a law enacted following the state Supreme Court ruling—which modified the Iowa Civil Rights Act to permit excluding Medicaid funding for gender-affirming healthcare—contravened the Iowa Constitution.

Earlier this year, Governor Kim Reynolds did so. signed into law a provision that eliminated gender identity as a protected category under the Iowa Civil Rights Act. As Activists protested against the measure. For possibly enabling the legal discrimination against transgender Iowans, some legislators argued that past attempts to refuse Medicaid coverage for gender-affirming healthcare were thwarted due to the state’s Civil Rights Act.

Keenan Crow, who serves as the policy and advocacy director at One Iowa, stated on Thursday that a key distinction between the wording in this year’s Senate appropriations bill and earlier efforts to prohibit Medicaid funding for gender-affirming treatments lies in its mention of "all treatment related to an individual’s gender dysphoria diagnosis." It does so without specifying only procedures like sex reassignment surgeries. According to Crow, such changes might affect transgender Iowan residents' capacity to obtain mental healthcare and various other essential services.

Our initial approach to addressing any cases of gender dysphoria will always involve mental health counseling; that’s non-negotiable as it is the main form of treatment," Crow stated. "While I certainly do not support limiting access to surgery, taking additional steps such as restricting medication and mental health resources would be entirely misguided.

Despite the elimination of gender identity protections from the Iowa Civil Rights Act, refusing transgender Iowans access to gender-confirming healthcare might still breach constitutional equal protection principles. A 2021 decision by the district court determined that banning Medicaid funding for transitioning services contravened both state civil rights statutes and the state’s constitution. This was concluded by the Iowa Supreme Court. declined to rule regarding the legality of the legislation in 2023.

The house bill currently does not incorporate restrictions on Medicaid, at least for now.

The House Health and Human Services Appropriations Subcommittee convened on Thursday to deliberate over their iteration of the HHS budget proposal. House Study Bill 342 , which was approved without opposition. The version of the bill in the House, as it stands now, does not incorporate the language from the Senate.

However, House Speaker Pat Grassley informed journalists on Thursday that the House backs limiting Medicaid resources from being used for transition-related medical treatments.

We don't feel that taxpayers...should cover the costs of surgeries and other hormone treatments," Grassley stated. "There is a section addressing this within the Senate bill, and I anticipate seeing a focus on these very issues from our end as well. However, negotiations between both sides haven't been finalized yet; they might propose alternative wording during discussions. Nonetheless, you can count on us to engage in conversations regarding whether taxpayers ought to bear the cost of these specific services.

The head of the House HHS appropriations subcommittee, Representative Ann Meyer from Fort Dodge, stated that she has discussed the provision with Senator Grassley. She also mentioned that they plan to have conversations with the entire House Republican group. Nonetheless, she indicated that the House might examine alternative wording for this measure which wouldn’t affect Medicaid support for mental and behavioral healthcare services aimed at transgender Iowan residents.

"If this were presented to the House, we'd simply be discussing surgery and hormone therapy," Meyer stated.