Senate Bill 2118, also known as House Bill 2498, 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," "puberty blocker," and "medical procedure," and explicitly states 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 gender identity. This prohibition applies to procedures performed in Tennessee or on individuals located in the state, including those conducted via telehealth.

However, the bill allows for exceptions where coverage may be provided for medical procedures addressing congenital defects, precocious puberty, diseases, or physical injuries, as long as these procedures began before the bill's effective date and are certified by a physician as necessary to avoid harm to the individual. The bill also clarifies that "disease" does not include any mental conditions related to gender identity. The act is set to take effect on July 1, 2026.