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

BACKGROUND: Recently, the Massachusetts Group Insurance Commission (GIC) prioritized research on the implications of a clause expressly prohibiting the denial of health insurance coverage for transgender-related services. These medically necessary services include primary and preventive care as well as transitional therapy. OBJECTIVE: To analyze the cost-effectiveness of insurance coverage for medically necessary transgender-related services. DESIGN: Markov model with 5- and 10-year time horizons from a U.S. societal perspective, discounted at 3 % (USD 2013). Data on outcomes were abstracted from the 2011 National Transgender Discrimination Survey (NTDS). PATIENTS: U.S. transgender population starting before transitional therapy. INTERVENTIONS: No health benefits compared to health insurance coverage for medically necessary services. This coverage can lead to hormone replacement therapy, sex reassignment surgery, or both. MAIN MEASURES: Cost per quality-adjusted life year (QALY) for successful transition or negative outcomes (e.g. HIV, depression, suicidality, drug abuse, mortality) dependent on insurance coverage or no health benefit at a willingness-to-pay threshold of $100,000/QALY. Budget impact interpreted as the U.S. per-member-per-month cost. KEY RESULTS: Compared to no health benefits for transgender patients ($23,619; 6.49 QALYs), insurance coverage for medically necessary services came at a greater cost and effectiveness ($31,816; 7.37 QALYs), with an incremental cost-effectiveness ratio (ICER) of $9314/QALY. The budget impact of this coverage is approximately $0.016 per member per month. Although the cost for transitions is $10,000–22,000 and the cost of provider coverage is $2175/year, these additional expenses hold good value for reducing the risk of negative endpoints —HIV, depression, suicidality, and drug abuse. Results were robust to uncertainty. The probabilistic sensitivity analysis showed that provider coverage was cost-effective in 85 % of simulations. CONCLUSIONS: Health insurance coverage for the U.S. transgender population is affordable and cost-effective, and has a low budget impact on U.S. society. Organizations such as the GIC should consider these results when examining policies regarding coverage exclusions.