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A pair of extreme new Trump administration rules aimed at functionally banning gender-affirming healthcare for transgender youth could force even more hospitals to close down.

NPR reported Thursday that the Department of Health and Human Services (HHS) drafted a proposed rule that would prohibit federal Medicaid reimbursement for medical care provided to transgender patients younger than 18 and prohibit the same from the Children’s Health Insurance Program (CHIP) for patients under 19.

Another proposed rule goes even further, blocking all Medicaid and Medicare funding to hospitals that provide gender-affirming care to youth.

As Erin Reed, an independent journalist who reports on LGBTQ+ rights, explained, this “would effectively eliminate access to such care nationwide, except at the few private clinics able to forgo Medicaid entirely, a rarity in transgender youth medicine.”

The policies are of a piece with the Trump administration and the broader Republican Party’s efforts to eliminate transgender healthcare for youth across the country.

Bans on gender-affirming care for those under 18 have already been passed in 27 states, despite evidence that early access to treatments like puberty blockers and hormones can save lives.

As Reed pointed out, a Cornell University review of more than 51 studies shows that access to such care dramatically reduces the risk of suicide and the rates of anxiety and depression among transgender adolescents.

The new HHS rules are being prepared for public release in November and would not be finalized for several more months.

But if passed, the ramifications could extend far beyond transgender people, impacting the entire healthcare system, for which federal funding from Medicare and Medicaid is a load-bearing piece. According to a report last year from the American Hospital Association, 96% of hospitals in the US have more than half their inpatient days paid for by Medicare and Medicaid.

It is already becoming apparent what happens when even some of that funding is taken away. As a result of the massive GOP budget law passed in July, an estimated $1 trillion is expected to be cut from Medicaid over the next decade. According to an analysis released Thursday by Protect Our Care, which maintains a Hospital Crisis Watch database, more than 500 healthcare providers across the country are already at risk of shutting down due to the budget cuts.

Tyler Hack, the executive director of the Christopher Street Project, a transgender rights organization, said that the newly proposed HHS rule would be “forcing hospitals to choose between providing lifesaving care for trans people or maintaining the ability to serve patients through Medicare and Medicaid.”

“Today’s news marks a dangerous overreach by the executive branch, pitting trans people, low-income families, disabled people, and seniors against each other and making hospitals choose which vulnerable populations to serve,” Hack said. “If these rules become law, it will kill people.”

One year and a day after Donald Trump won a second term as president – and on the 35th day of the US government shutdown, which has tied a record for the longest in history – the Democrats swept to victory in key races across the county.

Democratic candidates won the governorships in the states of Virginia and New Jersey, while Zohran Mamdani became New York City’s next mayor.

The Democrats may have just become the winners of the fight to reopen the government, too.

Trump’s ratings dropping sharply

Sixteen years ago, then-President Barack Obama was staggered by Republicans winning the governorships in Virginia and New Jersey in the 2009 elections.

The message was indelible: voters wanted to put a check on Obama and his wide-ranging agenda, from health care to global warming. Many Americans wanted him to cool his jets, including on what would become his signature achievement, Obamacare.

The following year, in the 2010 midterm elections, the Democrats lost more than 60 seats and their majority in the House. For the next six years, Republicans had a veto over whatever bills Obama wanted Congress to enact.

With Democrats now winning the governorships in those two states, Trump and his Republican allies in Congress have just been sent the same message: you need to be checked, too.

Going into Tuesday’s elections, Trump’s approval rating in one major poll was just above 40%, and his disapproval rating just under 60% – the highest it’s been since the January 6 2021 attack on the Capitol.

Independent voters, who swung Trump’s way in last year’s election, are now disapproving of his performance by a 69–30% margin.

Trump’s leadership of what he calls the “hottest country in the world” is falling short in voters’ eyes on a number of key issues: inflation, management of the economy, tariffs, crime, immigration, Ukraine and Gaza.

What’s at the heart of the continued stalemate?

The US government has also been shuttered since October 1. Government agencies have been closed to the public, and hundreds of thousands of government employees are going without paychecks, while thousands of others have been laid off.

Millions of Americans have been affected by flight delays or cancellations due to air traffic controller staffing issues. And food stamps to 42 million Americans have been suspended, with the Trump administration only relenting to provide partial payments in response to a court order.

Closing the government was not solely the doing of Trump and the Republicans in Congress. After nearly a year of laying prostrate and appearing pathetically ineffective in responding to Trump and his agenda, the Democrats finally got off the mat to fight back.

Of all the issues with Trump’s so-called “One Big Beautiful Bill” – which contained huge tax cuts for the wealthy and corporations, huge spending cuts for Medicaid, huge increases in spending to control immigration, more funding for fossil fuels and an increase in the debt ceiling – Democrats seized on one glaring omission from the legislation.

At the end of this year, subsidies are due to expire that more than 24 million Americans rely on to purchase health insurance under Obamacare. As a result, millions are projected to lose their health care coverage.

That is the cross Democrats chose to die on. They’ve told the Trump administration: you want to keep the government open? Keep the insurance subsidies flowing. Fix it now.

Republicans in Congress have had no interest in caving to Democratic demands. They’ve argued Democrats must agree to reopen the government before discussing the subsidies. Their calculation: voters will turn on the Democrats for the turmoil caused by the shutdown.

Trump wanted nothing to do with any such negotiations either. Two days before the elections, he said he “won’t be extorted”.

But a recent poll shows 52% of Americans blame Trump and the Republicans for the shutdown, compared to 42% who blame Democrats.

The wins in Virginia and New Jersey drove this message home. Yes, the Democrats triggered the current shutdown. But the president owns the economy. For better or worse, Trump will own the economy going into next year’s midterm elections, too.

What happens next?

How can the Democrats get out of the shutdown box with a win? With the leverage they just gained in the elections. Republican stonewalling after these election defeats will hurt them even more.

There are two routes forward.

First, Democrats could reach an agreement with the Republicans on a fix to the health insurance issue, with a vote in Congress by Christmas to get the subsidies restored. A bipartisan compromise appears now to be in the works.

Second, if such an agreement cannot be reached, the Democrats can introduce a bill to restore the subsidies on their own, with an up-or-down vote in both the House and Senate. If this was voted down, the Democrats would then have a winning issue to take to the midterm elections next November. The voters would know who to blame – and who to reward.

House Speaker Mike Johnson has prevented the House from meeting for more than six weeks, but it has to come back in session to vote to reopen the government at some point.

Trump is also insisting the Senate change its rules to allow a simple majority to be able to reopen the government – without any compromises on health insurance subsidies. But this is not a viable political option after these election results.

Two other Democrats take centre stage

There were two other big Democratic winners on Tuesday. California voters approved a redistricting plan intended to partially offset Republicans’ gerrymandering of congressional electorates across the country for the midterm elections.

It was a high-risk strategy by California Governor Gavin Newsom, and it paid off handsomely: Newsom is now considered the frontrunner for the Democratic presidential nomination in 2028.

And Mamdani, a Muslim socialist, was elected the Democratic mayor of New York City. Trump will no doubt continue to rubbish him as a communist radical extremist and follow through on his threats to cut federal funding for the largest city in the US.

Mamdani’s victory also places him on the national stage, but not centre stage. The Sinatra doctrine from his hit song New York, New York — “If I can make it there, I’ll make it anywhere” — does not quite apply in this situation.

To take back Congress next year and the White House in 2028, the Democrats will need all kinds of flowers to bloom — not just Mamdani’s bouquet. In 2028, the party is going to have to shop in a bigger greenhouse.

Bruce Wolpe, Non-resident Senior Fellow, United States Study Centre, University of Sydney