H.R. 3205 — No Subsidies for Gender Transition Procedures Act

This section denies the medical expense tax deduction for gender transition procedures by excluding them from the definition of medical care under section 213(d) of the Internal Revenue Code. (A gender transition procedure includes any hormonal or surgical intervention—including puberty blockers or suppression drugs, supraphysiologic cross-sex hormones, and surgeries such as castration, vaginoplasty, phalloplasty, mastectomy, or hysterectomy—intended to align physical appearance or function with an identity differing from biological sex; exclusions apply to treatments for disorders of sex development, complications from prior procedures, precocious puberty, male circumcision, and certain restorative procedures post-transition.) The amendment applies to taxable years beginning after enactment.

This section prohibits federal Medicaid payments to states for specified gender transition procedures furnished to enrollees (including related administrative costs), adding them to the list of non-matchable expenditures in SSA section 1903(i). It defines specified gender transition procedures in new SSA section 1905(kk) as hormonal or surgical interventions to align physical appearance with an identity differing from an individual's biological sex—including puberty blockers, supraphysiologic cross-sex hormones, and surgeries such as mastectomy, hysterectomy, phalloplasty, or vaginoplasty—excluding services for disorders of sex development, precocious puberty, infections or injuries from prior procedures, life-threatening physical conditions, restorative procedures post-transition, or male circumcision. (Thus, states must fund any such procedures solely with state dollars.)

This section prohibits federal payments under the Children's Health Insurance Program (CHIP) for specified gender transition procedures (as defined in section 1905(kk)) performed on minors or for assisting in the purchase of health coverage that includes such procedures. (As background, CHIP provides federal matching funds to states from annual allotments for states to provide health coverage to targeted low-income children ineligible for Medicaid; this limitation applies to expenditures under CHIP state plans for services furnished on or after the date of enactment.) It also makes a conforming amendment to update a cross-reference in Section 2107(e)(1)(N).

This section excludes from Medicare payment under parts A and B any specified gender transition procedures, as defined in section 1905(kk) of the Social Security Act. The exclusion applies to items and services furnished on or after the date of enactment.

This section prohibits the Secretary from including gender transition procedures (as defined in section 213(d)(12)(B) of the Internal Revenue Code of 1986), or any items or services within such category, in essential health benefits (EHBs) when defining them under subsection (b)(1) or revising them under subsection (b)(4)(H). (Thus, non-grandfathered plans in the individual and small group markets are not required to cover such procedures as part of the 10 EHB categories benchmarked to typical employer-sponsored coverage.)