Vermont Bill Would Create State Trust Fund For Private Trans Youth Care Clinics As Trump Threatens Hospital Funding

The bill would establish the Affirming Health Care Trust Fund, administered by the State Treasurer, to support clinics and providers outside the reach of federal funding threats.

Vermont Statehouse, Adam Fagen, Creative Commons

Across the United States, gender-affirming care has come under sustained attack in Republican-led states and from the Trump administration. For transgender youth, those attacks have been especially severe, with roughly half of U.S. states now banning such care outright. At the federal level, the administration has waged an intense pressure campaign against hospitals, threatening funding and prompting many systems to drop their care programs altogether. That campaign has now escalated further, with the federal government moving to threaten hospitals’ entire Medicaid and Medicare funding if they continue providing transgender youth care. In response, some states and cities are beginning to fight back by establishing their own funding mechanisms for trans healthcare. The latest example comes from Vermont, where lawmakers have introduced a bill to create a trust fund for gender-affirming care designed to be entirely insulated from federal funding threats.

H.576, introduced by Representatives Daisy Berbeco, Tiffany Bluemle, and Troy Headrick, would establish the Affirming Health Care Trust Fund. Administered by the State Treasurer, the fund would provide direct monetary support to healthcare providers and nonprofits offering gender-affirming care in Vermont. It would cover costs for patients who would otherwise go without treatment, fund the establishment of Vermont-based clinics, and pay for malpractice and liability insurance for clinicians who continue offering care. The bill is part of an increasing movement towards private clinics as a mechanism to survive federal threats.

The bill also includes provisions designed to protect patient information from both federal pressure and out-of-state threats, going further than the recent “refuge” or “shield” laws passed in several blue states to protect transgender youth care. It explicitly bars the board and other state actors from disclosing patient-identifiable data, the identities of providers, or the identities of award recipients to the federal government. This is a significant protection given the wave of abusive legislation and attempts to subpoena transgender healthcare records nationwide. While federal preemption may ultimately be litigated, these provisions give clinics a stronger legal footing to resist such demands—particularly as similar subpoenas have been repeatedly quashed in recent court cases.

The bill comes as families scramble to locate alternatives to hospital systems that are abandoning them. With more than 20 hospitals closing their doors to transgender youth care out of fear and preemptive compliance with the Trump administration, many families have been forced to seek alternatives. Just this week, major hospital systems across Colorado, for example, have stopped providing care. Groups like the Trans Youth Emergency Project say they have the capacity to refer displaced patients to private clinics, and in many places those clinics do exist and are absorbing demand. But as hospital-based programs continue to shut down and demand rises, those private providers will need sustained support—and more clinics will need to be created. Bills like this are a targeted way to do exactly that.

If this bill passes, Vermont would be the latest state to protect care in this way—but it would not be the only one. Massachusetts passed a similar measure last year, allocating $1 million toward transgender youth care clinics, though that funding has already come under criticism as insufficient to meet statewide need in the wake of major clinic closures. In New York City, newly elected mayor Zohran Mamdani has pledged $65 million for transgender healthcare. If that funding is realized, it would position New York City as a major hub for private clinics capable of absorbing demand created by hospital closures across the country. This strategy could prove to be a critical backstop for private providers that are already emerging—and that are likely to come under increasing strain in the years ahead.

The bill allows funding from state appropriations, private donations, grants, and—importantly—federal funds under a future administration that is protective of transgender healthcare. It would take effect immediately upon passage, with the board required to convene by August 1, 2026. There are still hurdles ahead: the bill must advance through committee, pass both chambers, and ultimately receive meaningful funding to function as intended. But its introduction alone signals something important. At a moment when hospitals are retreating and families are being forced into crisis planning, Vermont lawmakers are putting forward a concrete framework to protect access to care rather than surrender it. For Vermonters who want to see their state take a clear stand, residents can find and contact their legislators through the Vermont General Assembly website to make clear where they stand on protecting transgender healthcare.