Iowa Gov. Kim Reynolds signs bill barring Medicaid for gender-affirming surgeries, hormone therapy

DES MOINES — Those on Iowa Medicaid will not receive coverage from the program for gender-affirming care under a state budget signed by Iowa Gov. Kim Reynolds on Wednesday.

The ban on Iowa Medicaid coverage for gender-affirming surgeries and hormone therapy used for treating gender dysphoria is included in House File 1049, a budget bill that appropriates $2.47 billion to the Iowa Department of Health and Human Services, including Iowa's Medicaid program, as well as the Department of Veterans Affairs for the upcoming budget year.

The budget includes a provision prohibiting money allocated for Medicaid from being used for reimbursement for sex reassignment surgery or associated procedures, including hormone therapy or other medical interventions intended to alter primary or secondary sex characteristics related to an individual's gender dysphoria diagnosis.

Republican state lawmakers argued taxpayers shouldn’t pay for someone else’s sex reassignment surgery and that Iowa Medicaid still will provide treatment for gender dysphoria through behavioral health treatment.

Major medical associations — including the American Medical Association, the American Pediatric Association and the American Association of Psychiatrists — recognize gender-affirming care as medically necessary, evidence-based care that improves the physical and mental health of transgender and gender-diverse individuals.

Iowa 911 board reimbursement requests approved

Reynolds also approved the state standings budget, Senate File 659, in full, after emergency response systems officials asked her to veto a provision that would allow the Iowa Department of Homeland Security and Emergency Management to request reimbursement from local 911 service boards for “reasonable costs” related to call traffic to public safety answering points, or PSAPs.

The provision was included in the catchall “standings” budget bill passed in the final minutes of the 2025 legislative session.

Groups, including the Iowa chapters of the Association of Public-Safety Communications Officials and the National Emergency Number Association, warned the provision “threatens to destabilize 911 operations across the state and compromise public safety for all Iowans.”

Reynolds had the option to issue a line-item veto that would strike only that provision and leave the rest of the bill intact because the policy provision is in a budget bill. She said the 911 service boards are sitting on a $66 million surplus that could be used to fund other services.

The groups say the surplus is due to preparation for high-cost infrastructure improvement projects.

University of Iowa Center for Intellectual Freedom

Reynolds also signed legislation appropriating $1 million to establish a new Center for Intellectual Freedom at the University of Iowa — stemming from House File 437, which she also signed into law Wednesday.

Similarly, Reynolds signed a budget bill appropriating $1 million for the University of Northern Iowa’s new Center for Civic Education.

Under the bill, the University of Iowa would be required to create the center, which would be charged with increasing the intellectual diversity of the university’s academic community and fostering civic engagement among students and faculty.

The UI center would coordinate with the Center for Cyclone Civics at Iowa State and the Center for Civic Education at the UNI to enable shared course offerings.

Republicans have argued that the center is needed to ensure a diversity of ideological thought at the University of Iowa and have noted that ISU and UNI already have similar entities. Democrats in the Senate argued the center is unnecessary because the school’s staff and curriculum already ensure diverse viewpoints are heard.

House File 437 passed the House and Senate on party-line votes with Republicans supporting and Democrats opposed.

Governor vetoes $1.5M to UNI for tuition program

Reynolds, though, nixed $1.5 million for UNI to support a program offering in-state tuition to students from bordering states as a line-item veto in a budget bill.

The governor, in her veto message, said while she supports the program, she’s opposed to providing ongoing funding for the effort.

“UNI initially requested $3 million in one-time funding to jumpstart a program that would thereafter be self-sustaining, but this bill provides $1.5 million with an expectation of ongoing funding,” Reynolds said. “The contours of the program are also unclear as it relates to existing out-of-state students. I look forward to working with UNI next year to further develop the details of the program and see it launched.”

Veto on psilocybin rescheduling

Reynolds vetoed House File 383, which would allow synthetic psilocybin prescriptions in Iowa if the U.S. Food and Drug Administration approves the substance.

Psilocybin, a naturally occurring hallucinogenic compound found in certain species of mushroom, is listed as a Schedule I substance under the Controlled Substances Act. In recent years, the U.S. Food and Drug Administration has been studying the effects that synthetic psilocybin has on post-traumatic stress disorder. In 2024, the FDA rejected MDMA treatment for the disorder.

The bill was passed with broad bipartisan support in both chambers, but Reynolds said the bill “surrenders state authority to make an informed determination about classification to federal officials at the FDA” and Iowa should let the federal government make a determination before rescheduling the substance.

“The scientific evidence has shown that there is a high potential for abuse, it has an increased likelihood of causing severe psychological and physical dependence, and there is a lack of acceptable medical uses,” Reynolds said in a statement Wednesday. “This decision is not a dismissal of the emerging science or the sincere advocacy behind this legislation. Rather, it is a call for a more deliberate and Iowa-centric approach — one that engages state and federal partners, provides time to review any clinical studies and federal changes, and builds a framework for any future therapeutic access that is clear, safe, equitable, and medically sound.”

Backers of the legislation argued that psilocybin can be used to help treat PTSD for veterans who experience trauma from their time in service.

Other bills signed by Reynolds

On Wednesday, Reynolds also signed:

Gazette Des Moines Bureau Chief Erin Murphy contributed to this report.