Senate Bill 2118 amends Tennessee Code Annotated, Title 71, Chapter 5, by introducing a new section that restricts TennCare coverage for certain medical procedures related to gender identity. The bill defines key terms such as "congenital defect," "minor," "hormone," and "medical procedure," and specifies that TennCare will not provide coverage for procedures aimed at enabling individuals to identify with a gender inconsistent with their biological sex or to treat discomfort related to such discordance. This restriction applies to procedures performed in the state or via telehealth.

However, the bill allows for exceptions where coverage may be provided for medical procedures that treat congenital defects, precocious puberty, diseases, or physical injuries, as long as these procedures began before the bill's effective date and conclude by March 31, 2027. Additionally, a physician must certify that discontinuing the procedure would be harmful to the individual. The bill explicitly states that conditions like gender dysphoria and related mental health issues do not qualify as diseases for the purpose of coverage. The act is set to take effect on July 1, 2026.