Insurance for sex reassignments is cost effective

"Most US health insurance policies still contain transgender exclusions, even though treatment of gender identity disorder is neither cosmetic nor experimental," says William Padula. (Credit: Thomas Hawk/Flickr)

Insurance coverage of sex reassignment surgery and hormones for transgender men and women is cost-effective, a new study suggests.

The analysis calls into question the policy of many US health insurance plans to deny payment for medical care necessary to transition to the other sex.

The cost of surgery and hormones is not significantly higher than the cost of treatment for depression, substance abuse, and HIV/AIDS, the research team says. Those conditions are highly prevalent in those who are transgender but unable to medically transition.

The study appears online in the Journal of General Internal Medicine.

“Providing health care benefits to transgender people makes economic sense,” says study leader William V. Padula, assistant professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health.

“Many insurance companies have said that it’s not worth it to pay for these services for transgender people. Our study shows they don’t have an economic leg to stand on when they decide to deny coverage. This is a small population of people and we can do them a great service without a huge financial impact on society.”

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Estimates vary widely but it is believed that between 3,000 and 9,000 Americans undergo sex reassignment surgery each year. Transition medical care can include hormone replacement therapy, mastectomy, plastic surgery, psychotherapy, and more. The federal Center for Medicare and Medicaid Services began paying for sex reassignment surgery and other transitional care in 2014, after a 33-year-ban on covering those costs was lifted.

Padula and colleagues analyzed data from the 2011 National Transgender Discrimination Survey, which includes information on access to medical care and health outcomes, as well as the Healthcare Bluebook, which outlines the cost of medical services. They also looked at previously published research on the topic.

Policymakers in the United States consider a treatment to be cost-effective if the price is below $100,000 per year of life saved, adjusted for the quality of life during that time. Using that measurement, the researchers found health care for transgender people cost between $34,000 and $43,000 for the first five years; after 10 years, the cost dropped to between $7,000 and $10,000.

Currently, some employers and health insurance companies do offer at least one plan that covers transition care, but that is not the norm, Padula says.

“Most US health insurance policies still contain transgender exclusions, even though treatment of gender identity disorder is neither cosmetic nor experimental,” he says.

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The new analysis calculated that the cost to cover transgender people would be fewer than two pennies per month for every person with health insurance coverage in the United States.

“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,” Padula says. “For this small investment for a small number of people, we could improve their lives significantly and make them more productive members of society.”

He says that providing sex-reassignment surgery and other services to transgender people could help mitigate the expenses of treating depression, which often occurs in people who cannot transition, often because they do not have the financial means, as well as drug abuse and HIV/AIDS.

Padula’s coauthors are from the Massachusetts Group Insurance Commission and the University of Colorado. Funding for the study included an award from the Agency for Healthcare Research and Quality.

Source: Johns Hopkins University