This page is part of a set of resources for employers to implement transgender-inclusive health insurance coverage. See "Transgender-Inclusive Benefits for Employees and Dependents" for the complete set of resources.
The price of medical treatment or surgical intervention for any medical condition can be prohibitive for an individual person, regardless of the underlying medical condition. Insurance was developed in the twentieth century to enable cost sharing across a larger population and over time, allowing these medical costs to be spread out in order to promote health for the population as a whole.
For relatively rare conditions such as transsexualism, distributed costs are extremely low. Thus the annualized costs to the employer of providing insurance coverage for transgender-related care are typically minimal.
The precise costs depend on a number of variables:
- The number of employees and dependents who make claims for coverage.
It is hard to say how many trans people will access services. However, individual employers indicate that the number of employees taking advantage of related health insurance benefits is actually quite small. The HRC Foundation has spoken with many of the businesses that have offered inclusive benefits in the hopes of gaining more information about the number of people utilizing benefits. That number turned out to be so small that employers were unable or unwilling to look further into the data out of concern for the privacy of the individuals. These businesses also found no noticeable spike in costs that could be attributed to this area of coverage. HRC has calculated that the utilization by CEI participating companies appears to be significantly lower even than that the low utilization experienced by the City and County of San Francisco.
- The services and procedures requested over time.
The World Professional Association for Transgender Health's Standards of Care (WPATH SOC) are useful for anticipating what treatments might be requested in total. Appropriate clinical treatment varies between individuals: many people will not access all services, but some people may access significantly more than others -- it is difficult to predict what services people will need and, further, in what sequence or span of time they will access them.
- Variations among the services and procedures requested and available providers.
There are also limited qualified providers of certain surgical treatments in the United States, each of which may specialize in different types of procedures. Furthermore, services are not one size fits all: a surgical reconstruction method that is clinically indicated for one individual may well be inappropriate for another person. These variations between specialists’ techniques and the clinical needs of individual patients can lead to what appear to some as geographic disparities in estimations of the costs of these services.
Best Available Data
The best available public data on insurance coverage experience is from the City and County of San Francisco, which has reported limited data. The cost of services per employee per year was minimal, with costs per insured per year averaging between $0.77 and $0.96: less than a dollar per year per enrollee. The precise number of claimants is uncertain since for most years the data is reported by claim and not by claimant. Thus the average dollars per claimant per year ranged between $3,194 and $12,771. (The average five-year cost per claimant was between $15,963 and $63,853 for the period from 2001-2006.)
Challenges in Estimating Costs
The HRC Foundation is conducting ongoing research to provide a stronger actuarial picture of expected costs and utilization for employers of various sizes and based on the very different medical needs of trans men and trans women, and of the varying clinical needs of individuals.
HRC and medical providers alike receive many requests from well-intentioned benefits managers seeking provider pricing information. Early studies of the costs of actual treatments and procedures are based on limited data derived from a still-emerging area of health care and, as such, should be considered preliminary at best. The most widely cited study (Horton) is now outdated and underestimated prices for FTM genital reconstruction.
The costs of treatments and procedures based on pricing data from surgical providers are of limited value for projecting actual utilization or costs (and doing so would lead to unintended consequences). Therefore, we strongly caution against using this pricing either for estimating potential costs or for setting maximum dollar caps on services. Such caps are rare (the vast majority of employers do not have caps specific to transgender benefits) and are strongly discouraged by the HRC Foundation.
Instead we recommend cost predictions be made on the basis of actuarial data such as San Francisco (see link above).
Costs are Negligible For Medium- to Larger Employers
Depending on an employer's current healthcare costs, these numbers can appear high. However, when compared to the costs of other more common healthcare expenditures, the costs of coverage specific to transgender people's needs are comparable, or lower. For example, according to the American Association of Health Plans, the most common disease management programs in health plans are those for diabetes, asthma, and congestive heart failure. The American Diabetes Association reports that the per capita annual cost of healthcare for people with diabetes was $13,243 in 2002.
 American Association of Health Plans, “Highlights of 2001 AAHP Industry Survey,” at: http://goo.gl/iCiRIo (obtained 2004).
 American Diabetes Association, “Direct and Indirect Costs of Diabetes in the United States.” Available at: http://www.diabetes.org/advocate/resources/cost-of-diabetes.html
The contents of this page were originally developed or revised as part of the Human Rights Campaign Foundation's Transgender-Inclusive Health Insurance Research Initiative, a 2009-2010 collaboration between Samir Luther of HRCF and André Wilson and Jamison Green of Jamison Green & Associates.