Right! What if all insurers call Tennessee's bluff and refuse to drop trans people? That's a possibility. But the far-right would just blame the insurance companies' principled stances on some nonsense transphobic conspiracy theory about evil undefeatable money/lobbies/activists/deep-state, and Tennessee would have to grumblingly contract one of those insurers to administer Medicaid, as their only other options would be to fund healthcare or end healthcare. So the outcome would be status quo healthcare + extra helping of transphobic rhetoric.

Interesting for me to think about how the proposed trans exclusion might be tied to care-rationing more generally — as part of accepted debates over whose care is valid, necessary, too expensive, etc., and as part of a scarcity mentality, i.e., if we must pay for the healthcare of people in one group, we won't be able to pay for the healthcare of "everyone else" who is "normal."