Insurance Companies Can’t Afford Not to Cover Transgender Patients

Hormones for treating gender identity disorder can definitely be covered.
Hormones for treating gender identity disorder can definitely be covered. Photo: Ross M. Horowitz/Getty Images

Though the Center for Medicare and Medicaid Services started paying for transitional care for transgender men and women last year, many private insurers still deny coverage. That just doesn’t make economic sense, according to a new analysis by the Johns Hopkins Bloomberg School of Public Health.

They found that covering services medically necessary for treating gender dysphoria — which can include hormone-replacement therapy, mastectomy, psychotherapy, and gender-reassignment surgery — could be less expensive in the long run than treating conditions that are more prevalent among people who cannot transition, like depression, drug abuse, and HIV.

For a study published in the Journal of General Internal Medicine, researchers analyzed the 2011 National Transgender Discrimination Survey for health outcomes and used the Healthcare Bluebook to determine the cost of medical services. They estimated that gender-reassignment surgery (which, it should be noted, not all trans people undergo) is a one-time cost of $20,000 to $30,000, plus any related procedures and the ongoing cost of hormone therapy. Care for a trans person who doesn’t transition would cost nearly $11,000 per year, every year, they found. So after a few years, covering transition care is more cost-effective than not covering it.

And the cost wouldn’t be burdensome for the public. If every insurance company started covering transition care, the cost per insured person would be 1.6 cents per month. The researchers noted that the $300,000 annual treatment for the 30,000 Americans with cystic fibrosis costs us each five cents per month.

Lead author William Padula, PhD, MS, MSc, an assistant professor of health policy and management at the Bloomberg School, told The Atlantic that this coverage provides very good value for its relative budget impact: “Insurance companies are saying, ‘You want us to make this a necessary service, but we can’t afford to.’ What this paper is saying is, you can absolutely afford to.”

He went on to say in a release: “We would be paying a very small incremental amount to improve the quality of life for a population that is extremely disenfranchised from health care and other services we consider a right. For this small investment for a small number of people, we could improve their lives significantly and make them more productive members of society.”

Covering Transgender Patients Pays Off Long-Term