The Johns Hopkins Bloomberg School of Public Health has done a new analysis of the current situation with transgender health coverage. As you may know, while the Center for Medicare and Medicaid Services has started paying for transition-related healthcare for transgender people, many private insurers deny such coverage, judging it to be "experimental," purely cosmetic," "elective," or just plain icky...even though the American College of Physicians, the American Medical Association and the American Psychological association all consider the treatment to be medically necessary to be available for transgender people.

It's the same as saying if you have cancer, you need chemotherapy if you are going to survive.

--William Padula, Johns Hopkins

Padula is not saying that being transgender is like a disease—just that hormone therapies and sometimes surgery are things people need to live a healthy life. Transgender people attempt suicide at 9 times the rate of the general population.

The study is Societal Implications of Health Insurance Coverage for Medically Necessary Services in the U.S. Transgender Population: A Cost-Effectiveness Analysis

Using a Markov analysis technique, Padula and his colleagues looked at the cost-effectiveness of insurance companies paying for transgender health care. They estimated the cost of gender reassignment surgery to be a one-time cost of roughly between $20K and $30K and the ongoing costs of hormone replacement therapy. They compared that to the health care needs for a transgender person without transition services, which they estimate to be $10712 per year for treatment of depression, drug and alcohol abuse, and other related problems.

If every insurance company suddenly agreed to cover transgender care, the cost per person (per payee on the insurance plan) would be 1.6 pennies per month. As a comparison, cystic-fibrosis treatment, which costs $300,000 a year (for each of the 30000 Americans who suffers from the disease), costs five cents a person.

Some insurance companies, Padula says, also end up refusing transgender patients some forms of preventive care—for example, if a trans man with a cervix gets a pap smear, and his gender is officially changed to male on his license and birth certificate and such, the insurance company may just read that as a man unnecessarily requesting coverage for a pap smear and deny it outright.

Though he didn’t look at the economics of preventive care for this study, Padula says, “I would hypothesize that it might be less cost-effective [to deny coverage], because if one of these people who are transgender develops cancer down the road, then you’re kicking yourself.”

We consider that this coverage is of really good value and it’s a low-budget impact for society from an insurance standpoint. 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.

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.

--Padula