Sex Reassignment Surgery For Transgenders: Should It Be Covered By Health Insurance?

September 9, 2016

transgender_flag_thmbPeople who identify themselves as transgender evolved in their belief of a gender-assignment mistake when they are self-aware of stereotypes involving genders, which can occur as early as the age of three years old. This sense of identity can adversely affect their self-esteem to the point that they believe the only avenue to improve is to partake in a transition process so their physiological gender coincides with their internal identity belief. Transitioning from one gender to another is a process that can be mentally exhausting, emotionally charged and prohibitively expensive.

What makes transitioning genders so financially draining? Studies on this issue have identified discrimination and lack of health insurance to be the two primary obstacles.

  • Discrimination. Transgender people often have trouble finding health care providers that are trained in and respectful of their concerns. Their self-identity may also resulting more difficulty finding high-paying jobs despite their skill set, since their concerns are unique and very few companies have the resources to address them properly.
  • Lack of Insurance Coverage. Health insurance companies are reluctant to foot the costs of transitioning, which has many phases, such as hormone therapy to actual gender reassignment surgery. As it is not a quick process, the cost of changing gender can be prohibitive for insurance companies as well as the insured. This makes such a process less common than it might otherwise be for some people.

Doctorwithsyringeinhandsandflagonbackgroundseries-LGBTpeopleHere are some examples of costs associated with gender reassignment.  Hormone therapy typically costs USD 100 a month and surgery can be on average USD 25,000 to USD 30,000. Phalloplasties, the surgery that female to male transgenders go through in order to fully transition, are most expensive, with this surgery typically costing more than USD 100,000, according to the Transgender Law Center.

Should insurance companies consider covering gender re-assignment?  Johns Hopkins University Bloomberg’s School of Public Health and UCLA’s William’s Institute of Law has examined this issue, and offer data that might make insurers consider the financial benefits of expanded coverage, which will also be beneficial to those undergoing such reassignment.

The study, published in the Journal of General Internal Medicine, explored the cost-effectiveness of transgender health-care coverage for insurance companies, especially when compared with long-term treatments such as chronic ailments for which there are no cures.  Lead author William Padula has pointed out significant arguments in favor of covering transition.

pullout_oneA primary argument in favor of providing coverage for gender transition is the one-time cost for transitioning, which includes surgery and ongoing hormone-replacement therapy. The study of 34 employers which include transgender coverage in their work-related health plans revealed that the majority of costs incurred by employees was quite low (at most 1 percent of total health-care expenditures). With this coverage, there seemed to be a noted absence of employee healthcare utilization, but even of those employers who reported costs associated with gender transition, the actual impact on companies over a multi-year period was insignificant.Williams-Institute-Logo

The survey, conducted by the Williams Institute, focused on employers that provided transition-related health care coverage to its employees. Results suggest that it is in favor for both employees and employers without any significant financial impact on the company.

  • Low costs. According to the survey, two-thirds of employer-participants reported there is no additional cost in providing this additional coverage for their employees.


  • Few claims. If an employee claims any transition-related health care benefits, it might financially impact their employer. The survey grouped the participants according to the number of employees and the claims the latter has made for transitioning. According to them, it’s just 0.054 claimants per 1,000


  • Limited options. Despite this, most of these employer-covered transition treatments have restrictions which limit the options of transgender people from accessing it. Only 59 percent of the participants cover surgical procedures and 48 percent limit their coverage within the United States.

There is hope for transgender transition. Medicare and Medicaid services have begun paying for sexual reassignment pullout_twosurgeries and other transition-related care, but only on a case-by-case basis as deemed “medically necessary”by consulting professionals in each situation. It is estimated that 0.3 percent (or 3 in 1,000) of U.S. adults are self-identified as transgender, and neary 50 million people are currently enrolled in Medicare.

Some U.S. companies have initiated inclusion of these benefits for their employees. This change has resulted in a rise in sexual-reassignment surgeries paid by insurance. This may be a financial advantage for those who are looking forward to transitioning, but with increased access  due to affordability, the previous six-month wait may extend to a year or more as more and more patients get in line to externally display their internal gender identity.

The transgender population is small, but has become much more visible in recent years in political, medical, social and civil areas of life. Gender transition has been a high hill to climb for many transgender people due to the prohibitive cash cost. However, the Williams Institute survey gives new hope to transgender people individually, but also sheds light on the benefits of offering transgender care in health-insurance plans. As a result, employers are embracing very low costs in adding the coverage to their group plans while seeing a dramatic increase in social consciousness and promoting diversity and equality in their workforces. In a cost-benefit analysis, providing gender-reassignment coverage seems to only be a positive net effect across the board.



  1. Leal, S. (2015). I Can’t Afford to Transition: The Unseen Costs of Being Transgender in 2015. Marie Claire. Retrieved 18 August 2016, from
  2. Desmon, S. (2015). Insurance for sex reassignments is cost effective – Futurity. Futurity. Retrieved 18 August 2016, from
  3. Epic Week For Transgender Rights Expands With Health Care Protections — ThinkProgress. (2016). Medium. Retrieved 18 August 2016, from
  4. Green, J. & Tracer, Z. (2016). Sex Reassignment Is Latest Company Benefit in Equality Push – Bloomberg. Retrieved 18 August 2016, from
  5. Herman, PhD, J. (2013). Costs and Benefits of Providing Transition-Related Health Care Coverage In Employee Health Benefits Plans. Williams Institute Law (UCLA). Retrieved 18 August 2016, from


Author Bio

halland_chenHalland Chen is an MD who currently practices at a Vein and Pain Centers of America headquartered in New York City. With a passion in regenerative medicine, Dr. Halland helps patients alleviate pain and avoiding surgery by allowing patients to heal naturally using the body’s own growth factors and repair mechanisms. He is on the Board of Directors for the American Academy of Regenerative Medicine, whose leadership Directors also come from the Harvard Stem Cell Group and Mayo Clinic. Among his other passions, Dr. Halland travels alongside with tech entrepreneurs across various locations internationally to cultivate new upcoming and emerging technologies, kite-surfing, and writing informative articles to help educate readers.

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