Who Paid For Gender-Affirming Care?

Gender-affirming care refers to medical interventions designed to support and affirm a patient’s gender identity when it conflicts with the patient’ assigned gender at birth. My team’s new study, published this week in the Journal of General Internal Medicine, compared medical claims, insurance coverage, and social determinants of health between patients seeking gender-affirming care and those not seeking it.

Using data from Kythera Labs, a healthcare data technology company, we examined 2.2 billion medical claims in 2023 from 206 million patients. On average, patients seeking gender-affirming care incurred 87% more claims than others. Over 22% of these patients were minors, who had 2.7 times more claims per person than other minors.

As our study shows, commercial health plans, Medicare, and Medicaid programs paid for gender-affirming care. Depending on benefit design, patients and their families may also have paid out-of-pocket for this care. Therefore, although gender-affirming care is a decision made by the patients and/or their families in consultation with physicians, it is also funded by employers, other beneficiaries in the plan, and taxpayers.

Medicare began covering certain gender-affirming care services in 2014. Medicaid coverage varies by state; for example, Maine and Illinois provide comprehensive coverage, while Texas and Alabama exclude it. The Biden Administration prohibits commercial plans compliant with the Affordable Care Act from restricting coverage for gender-affirming care.

The health effects of gender-affirming care are inconclusive. A 2021 study in JAMA Surgery found a positive association between gender-affirming surgeries and mental health, while The New York Times cited research suggesting that puberty blockers do not improve patient well-being. Like all scientific disciplines, medicine constantly evolves as new knowledge and evidence emerge—especially in areas with a relatively brief history, such as gender-affirming care.

Our study found that patients seeking gender-affirming care face greater challenges in social determinants of health. For example, they were more than twice as likely as other patients to encounter problems related to upbringing and psychosocial circumstances. More cost-effective ways to improve health for these patients may exist outside of healthcare.

In his most recent bestseller, Blind Spot: When Medicine Gets It Wrong, and What It Means for Our Health, Johns Hopkins professor and surgeon Dr. Marty Makary offers examples of mistakes made by the mainstream medical community that were later proven harmful to patients. If certain gender-affirming care interventions turn out to be counterproductive, does mandatory coverage actually benefit patients?

Policymakers are often eager to determine, on behalf of Americans, what healthcare services insurance plans should cover, such as the essential health benefits mandated by the Affordable Care Act. However, what services are considered essential varies from individual to individual and cannot be universally determined by a few for everyone. Why should someone with no risk of a condition be forced to pay for a more expensive insurance plan that covers it?

Therefore, insurers should be allowed to offer plans that cater to patients’ diverse needs, risk tolerances, and preferences. The unforgiving, hard-to-game, and constantly evolving discipline of market competition, enforced by self-interested patients, protects their interests better than regulations can.

Disadvantaged patients should receive direct subsidies rather than mandatory insurance coverage to obtain the option to choose their preferred insurance plans. The paternalistic focus on regulatory protection of patients, instead of respecting patient autonomy and preferences, can stifle competition and innovation, ultimately harming patients both clinically and financially.

If certain services are believed to be underprovided due to cost barriers, the most efficient solution is to mobilize private funds to directly support these services, such as charity clinics offering them at no or low cost. Mandating insurance plans to cover these services, or forcing taxpayers to support those plans, does more harm than good.