Vermont Wins Ruling Blocking Medicaid Cut Over Gender Care

Vermont Attorney General Charity Clark secured a federal court ruling Saturday that blocks a Trump administration rule threatening to cut Medicaid and Medicare funding from hospitals that provide gender-affirming care to minors.

Oregon federal judge Mustafa T. Kasubhai issued the written opinion, siding with Clark and an Oregon-led coalition from 20 states plus Washington, D.C. The decision stops the federal government from weaponizing hospital funding to restrict care that Vermont and other coalition states have written into law.

The rule originated in December, when Health and Human Services Secretary Robert F. Kennedy Jr. announced a proposal to pull all Medicaid and Medicare funds from any hospital offering gender-affirming care to minors. Kennedy’s office simultaneously declared such procedures “neither safe nor effective,” putting the administration directly at odds with the American Medical Association and the American Academy of Pediatrics, both of which back the care for young patients.

Clark joined the Oregon-led multistate lawsuit within days of Kennedy’s December announcement. Kasubhai had already issued an oral ruling granting summary judgment, meaning the facts weren’t genuinely in dispute and no full trial was needed. Saturday’s written opinion locked that result in.

The judge wasn’t diplomatic about it.

“Unserious leaders are unsafe,” Kasubhai wrote. “Tragically, this case is one of a long list of examples of how a leader’s wanton disregard for the rule of law causes very real harm to very real people.” Kasubhai also found that Kennedy lacked the legal authority to unilaterally publish a document revising clinical standards of care, a violation of the Administrative Procedure Act.

For Vermont, the stakes were concrete. The state passed shield laws in 2023 protecting both providers and patients who receive gender-affirming care. Kennedy’s proposed rule would’ve put federal funding in direct conflict with those statutes. The ruling, at least for now, neutralizes that collision.

Clark didn’t frame Saturday’s outcome as a finish line. “This decision is a victory in our ongoing fight for bodily autonomy and the rights of transgender youth,” Clark said in a statement Monday. “We will continue to fight to ensure that gender-affirming care remains safe, effective, and protected.”

That’s a significant posture given the pace of federal action since 2025. The Trump administration has moved across multiple fronts to restrict access to gender-affirming care, and the courts have been the primary check. Kasubhai’s ruling represents one of the more sweeping rebukes, with 60 pages of written analysis formalizing what the oral ruling had already established.

Vermont’s legal win also carries practical weight for its health infrastructure. The Dartmouth Health system operates across the region, and VTDigger has reported that Vermont is increasingly positioned as a destination for patients seeking this care from states where it’s been restricted or outlawed. A federal funding threat of the kind Kennedy proposed would’ve undercut that role directly.

The coalition’s legal argument centered partly on procedural grounds: Kennedy’s office didn’t go through proper rulemaking channels. That’s the core of why the Administrative Procedure Act mattered here. You can’t just publish a declaration rewriting clinical standards and expect it to carry the force of law.

What comes next depends on whether the Trump administration appeals. That’s the open question as of Monday. Clark’s office hasn’t indicated it expects the fight to end here, and the administration hasn’t announced its next step. What’s documented is Saturday’s ruling, 20 states holding, and a federal judge on record calling the opposing leadership unserious.