Rady Children's Hospital Faces Closure Over Trans Care Dispute

California sues hospital over ending gender-affirming care program under federal pressure

Feb. 4, 2026 at 9:39pm

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Rady Children's Hospital in San Diego is facing a legal battle and potential loss of federal funding after it announced the closure of its Center for Gender-Affirming Care in response to threats from the Trump administration. The state of California has filed a lawsuit alleging the hospital violated its merger agreement by ending the program, which served over 1,000 transgender patients. The hospital could be forced to reopen the clinic, but doing so risks losing hundreds of millions in federal Medicaid and Medicare funding, potentially leading to the hospital's closure.

Why it matters

The closure of Rady's transgender care program leaves Southern California without any children's hospitals providing such services, devastating patients and providers. The dispute highlights the broader national battle over access to gender-affirming care, with the Trump administration seeking to financially cripple any institution that provides trans care to minors.

The details

In late January, Rady Children's Hospital announced it would shutter its Center for Gender-Affirming Care, citing "escalating federal actions" and a federal investigation. This came after the hospital had previously tried to hide the program from public view. Last week, the California Attorney General filed a lawsuit alleging Rady violated the terms of its merger agreement by ending the program without notifying the state. An emergency court hearing is scheduled for Thursday, as Rady faces the prospect of being forced to reopen the clinic while risking the loss of critical federal funding.

  • In January 2026, Rady Children's Hospital announced it would close its Center for Gender-Affirming Care.
  • Last week, the California Attorney General filed a lawsuit against Rady over the closure.
  • An emergency court hearing is scheduled for Thursday, February 6, 2026.

The players

Rady Children's Hospital

A major children's hospital in San Diego that provided gender-affirming care to over 1,000 transgender patients before shutting down the program.

California Attorney General Rob Bonta

The state's top law enforcement official who filed a lawsuit against Rady Children's Hospital over its closure of the gender-affirming care program.

Trump administration

The federal government under former President Trump, which has launched what legal experts call a "coordinated, multi-agency attack on gender-affirming care" and threatened to cut off Medicaid and Medicare funding to hospitals providing such services.

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What they’re saying

“Hospitals and clinics have a legal obligation to provide equal access to healthcare services.”

— California Attorney General Rob Bonta (Press release)

“Rady gambled that complying with federal threats was safer than honoring their state contract. Now they're defending on both fronts, exactly the nightmare scenario they were trying to avoid.”

— Dov Fox, Law professor and director of the Center for Health Law Policy & Bioethics at the University of San Diego (voiceofsandiego.org)

What’s next

The judge in the case will decide on Thursday whether to force Rady Children's Hospital to reopen its gender-affirming care program, despite the hospital's concerns about losing critical federal funding.

The takeaway

This case highlights the high-stakes battle over access to transgender healthcare, with children's hospitals caught in the crossfire between state and federal policies. The potential closure of Rady would devastate the transgender community in Southern California, underscoring the need for clear legal protections and funding guarantees to ensure continuity of care.