Report Says Health Care Costs for Transgender Military Is Minimal

A new study published on August 12 in the prestigious New England Journal of Medicine finds that the cost of providing transition-related health care for transgender service members will be minimal after the Pentagon lifts its ban.

In "Caring for Our Transgender Troops -- The Negligible Cost of Transition-Related Care," Dr. Aaron Belkin, Palm Center director and visiting professor at University of California, Hastings, concludes that the analysis should allay concerns about financial implications of inclusive policy.

"Under any plausible estimation method," Belkin said, "the costs are minimal."

In response to Secretary of Defense Ashton Carter's announcement last month that a working group would study ways to end the military's ban over the next six months, some opponents of the policy change have cited cost as a reason to continue to prohibit service by transgender personnel. Belkin's key finding, however, is that the total price tag for the military's healthcare system would be an estimated $5.6 million each year, or 22 cents per member per month. That amounts to one one-hundredth of one percent of the military's $47.8 billion annual health care budget.

To derive his figures, Belkin used data from large employers whose insurance plans offer transition-related care, which can include hormone treatment and/or surgery. He analyzed the annual incidence of claims for -- and the cost of -- such care, and reached an overall cost figure using an adjusted estimate of the number of transgender people (12,800) who serve in the military.

Of those, Belkin estimates that 188 will require transition related care each year. His estimates of utilization rates and costs closely match data provided by the Australian military, and he noted that, "the fact that estimated data from the US match actual data from the Australian military lends confidence to the estimations."

For transgender people who seek hormones and/or surgery, such care is normally considered to be medically necessary. Yet the American Medical Association recently found that the military's current rules prevent military doctors from adequately treating transgender troops by providing medically necessary care.

In June, the AMA passed a resolution urging that "transgender service members be provided care as determined by patient and physician according to the same medical standards that apply to non-transgender personnel." Four retired former U.S. Surgeons General issued a statement endorsing the AMA resolution. Former Secretary of Defense Chuck Hagel said last year that the military's health care system must be "top performing" and that "we cannot accept average when it comes to caring for our men and women in uniform."

Federal agencies and programs including Medicare have acknowledged that it would be unreasonable to deny transition-related care, and the Obama Administration recently announced that insurance companies participating in the Federal Employees Health Benefits Program must offer transition-related coverage.

In an explanatory letter issued by the Office of Personnel Management, insurers were told that OPM's mandate reflects "the evolving professional consensus" that transition-related treatment may be "medically necessary" for transgender individuals.

The Palm Center is an independent research institute committed to sponsoring state-of-the-art scholarships to enhance the quality of public dialogue about critical and controversial issues of the day. For the past decade, the Palm Center's research on sexual minorities in the military has been published in leading social scientific journals. The Palm Center seeks to be a resource for university-affiliated as well as independent scholars, students, journalists, opinion leaders, and members of the public.

For more information, see www.palmcenter.org