ISSUE BRIEFS

ECONOMICS OF GENDER-AFFIRMING CARE

Gender-affirming care encompasses essential health services that improve both health and economic outcomes for transgender and gender-diverse people, and society overall. Routine gender-affirming care includes hormone therapy, puberty blockers, counseling, and inclusive primary care, and is widely recognized as cost-effective (1,2). Providing access to gender-affirming care reduces healthcare costs for patients and insurers, lowers financial burdens on families, and decreases reliance on emergency department services (2-4).

Cost-effectiveness analyses that consider both hormone therapy and surgical care demonstrate very low costs to insurers. The estimated cost of providing gender-affirming care is approximately $1,176 per insured person per year (2). In contrast, average individual healthcare spending in the United States is roughly $15,000 per person per year, most of which is covered by insurers (5). For insurers specifically, average costs associated with gender-affirming care are approximately $121 annually for testosterone and $153 for estrogen therapy (2). Contrastly, average annual pharmaceutical spending in the United States exceeds $1,000 per person per year, demonstrating the relatively low costs associated with providing gender-affirming care (6).

Failure to provide gender-affirming care contributes to substantial economic losses through increased demand for mental health services, higher rates of emergency department utilization, and lost productivity associated with mental health deterioration (3,4). Restricting access to care is associated with higher rates of depression, mental health crises, HIV, and substance misuse, all of which carry significant individual and societal costs (1,7). Transgender individuals denied insurance coverage are more likely to use nonprescription hormones, increasing the risk of adverse health outcomes due to lack of medical supervision (4). Barriers to care are also associated with increased suicidality (1,7). In the United States, each attempted or completed suicide results in medical costs that can total several thousand dollars, in addition to profound human and social impacts (8).

The downstream economic effects of declining mental and physical health are significant. Limited access to gender-affirming care increases absenteeism and reduces worker productivity, raising costs for employers and increasing healthcare spending across employer-sponsored insurance plans (9). These costs ultimately burden individuals, insurers, and employers alike.

While the Affordable Care Act has previously been interpreted to require some insurance coverage for gender-affirming care, current interpretations remain debated and unclear. As a result, many individuals continue to face substantial out-of-pocket expenses (10,11). Removing access to care may also force patients to relocate to obtain medically necessary services, disrupting continuity of care and potentially resulting in lost employment. Although transgender youth often incur lower direct medical costs due to reliance on low-cost interventions, families facing forced migration may experience significant financial strain related to relocation, healthcare transitions, and employment changes (3).

By improving mental health outcomes and reducing downstream healthcare utilization, gender-affirming care is consistently shown to be cost-effective, cost-saving, and lifesaving (1,2,12). Ensuring comprehensive insurance coverage and removing barriers to care improves health outcomes for transgender people while reducing healthcare expenditures at the individual, state, and federal levels. Conversely, restricting access shifts costs onto patients, privatizing expenses previously absorbed by insurers, increasing total system expenditures, and exacerbating existing health inequities.

References

  1. Padula WV, Heru S, Campbell JD. Societal Implications of Health Insurance Coverage for Medically Necessary Services in the U.S. Transgender Population: A Cost-Effectiveness Analysis. J Gen Intern Med. 2016;31(4):394-401. doi:10.1007/s11606-015-3529-6

  2. Baker K, Restar A. Utilization and Costs of Gender-Affirming Care in a Commercially Insured Transgender Population. J Law Med Ethics. 50(3):456-470. doi:10.1017/jme.2022.87

  3. Kidd KM, Sequeira GM, Fechter-Leggett M, et al. “From Having Regular Care With a Team of Doctors to Fleeing the State”: Parent Experiences Supporting Gender Diverse Youth in States With Care Bans. Journal of Adolescent Health. 2025;77(4):620-627. doi:10.1016/j.jadohealth.2025.06.001

  4. Mann S, Barbee H. Public Health and Ethical Risks of Rollbacks on Medicaid Coverage for Gender-Affirming Care. JAMA. 2025;334(10):853-854. doi:10.1001/jama.2025.12039

  5. NHE Fact Sheet | CMS. Accessed December 19, 2025. https://www.cms.gov/data-research/statistics-trends-and-reports/national-health-expenditure-data/nhe-fact-sheet

  6. How do prescription drug costs in the United States compare to other countries? Peterson-KFF Health System Tracker. Accessed December 19, 2025. https://www.healthsystemtracker.org/chart-collection/how-do-prescription-drug-costs-in-the-united-states-compare-to-other-countries/

  7. Schoenbrunner A, Beckmeyer A, Kunnath N, et al. Association Between California’s State Insurance Gender Nondiscrimination Act and Utilization of Gender-Affirming Surgery. JAMA. 2023;329(10):819-826. doi:10.1001/jama.2023.0878

  8. Health insurance coverage for gender-affirming care of transgender patients. Published online 2025. https://www.ama-assn.org/system/files/transgender-coverage-issue-brief.pdf#:~:text=Other%20studies%20have%20similarly%20demonstrated%20that%20transgender,sought%20employment%20in%20order%20to%20access%20services

  9. Schneidmiller C. Inclusive Healthcare Strengthens the Bottom Line | Leader’s Edge Magazine. July 9, 2025. Accessed December 19, 2025. https://www.leadersedge.com/healthcare/inclusive-healthcare-strengthens-the-bottom-line

  10. Section 1557: Protecting Individuals Against Sex Discrimination | HHS.gov. August 25, 2016. Accessed December 4, 2025. https://www.hhs.gov/civil-rights/for-individuals/section-1557/fs-sex-discrimination/index.html

  11. “The Staggering Costs of Being Transgender in the US, Where Even Patients with Health Insurance Can Face Six-figure Bills” - Benji Jones | Mount Sinai - New York. Mount Sinai Health System. Accessed December 4, 2025. https://www.mountsinai.org/about/newsroom/2019/the-staggering-costs-of-being-transgender-in-the-us-where-even-patients-with-health-insurance-can-face-sixfigure-bills-benji-jones

  12. Valiquette CR, Morgan J, Rae S, et al. Gender Affirming Care in a Public Health Payer System: A Cost Utility Analysis of Top Surgery. Plast Reconstr Surg. Published online November 17, 2025. doi:10.1097/PRS.0000000000012619