The Costs and Benefits of Eliminating Trans Health Care Exclusions

Transitioning to better health careMany public and private health care insurance programs have “transgender exclusions” that refuse to pay for transition-related care for transgender people.  One common argument against ending such exclusions is that covering the cost of transgender people’s surgeries and/or hormones would raise the cost of health care insurance premiums for everyone.

The State of California’s Department of Insurance found that not only was that a false assumption, but covering such care could even “lower costs.”

How is it possible that an expansion of health care availability could actually lower health care costs?  The answer lies in accounting for the costs of discrimination:  “The Department [of Insurance] has determined that the benefits of eliminating discrimination far exceed the insignificant costs associated with implementation of the proposed regulation [requiring insurance companies to cover transgender-related care]. …Further, the Department’s evidence suggests that benefits will accrue to insurance carriers and employers as costs decline for the treatment of complications arising from denial of coverage for treatments.” (p. 9)

First, let’s talk about the costs.  The Department looked at the costs incurred and projected to be incurred by several employers who decided to cover such care, including the University of California, the City of Berkeley, the City of Portland, the City of Seattle, and the City of San Francisco.  Projected cost estimates were much higher than actual costs turned out to be, in one case 15 times higher.  Once there was actual utilization data available, the various plans’ premiums increased, at most, by 0.19%.  In several cases, insurers determined no premium increase at all was needed to cover the transgender-specific healthcare. (pp. 6-7)

So how are actual savings possible?  The report addresses four specific ways in which overall health care costs for transgender “insureds” might decline:

1. A decrease in suicide attempts and completions.  Transgender people have an extremely high rate of suicide attempts, with one large national study showing that 41% of trans respondents had attempted suicide at least once.  The Centers for Disease Control and Prevention estimate the average acute medical costs of a single suicide attempt in the U.S. is $7,234.  This figure does not include post-attempt mental health care or ongoing medical costs.  The California Department of Insurance found multiple studies showing that the rate of suicide attempts by trans people drops dramatically among those who are able to access transition-related medical care.  The Department concluded, “These studies provide overwhelming evidence that removing discriminatory barriers to treatment results in significantly lower suicide rates.  These lower rates, taken together with the estimated costs of a suicide attempt and completion, demonstrate that the proposed regulation [banning trans-related health care discrimination] will not only save insurers from the costs associated with suicide, but prevent significant numbers of transgender insureds from losing their lives.”  (pp. 10-11)

2. The Department referenced multiple studies that found mental health improvements among transgender people who were able to access transition-related medical care, including decreases in the rates of depression and anxiety.  “This overall improvement in mental health and reduction in utilization of mental health services could be a source of cost savings for employers, insurers, and insureds,” the Department of Insurance concluded. (p. 11)

3.  Substance use and abuse is one of the ways in which transgender people try to cope when they cannot access transition-related medical care.  “There are numerous studies that provide evidence that substance abuse rates decline” when transgender people can access the care they need, the Department reported.  (p. 11)

4.  Transgender people – particularly transgender women – have much higher HIV rates than the general population (28% in a meta-analysis compared to a general population rate of 0.6%).  Studies have shown “high rates of adherence to HIV care for trans people when combined with hormonal treatment,” the Department said, which is “particularly relevant to insurers because it provides evidence that offering treatment may reduce the long-term costs of treatment for HIV/AIDS.”  Furthermore, this benefit extends to the general public:  “[w]hen compliant with care, HIV-positive people stay healthier longer and are far less likely to transmit the virus to others.”  (p. 11)

In addition to these ways in which health care costs might decline as a direct result of trans people being able to access transition-related care, the Department pointed out two additional types of benefits:

5.  One of the ways some transgender individuals cope with being denied surgical assistance in modifying their body so they feel safer or more comfortable is by using silicone injections.  These are often administered by laypeople without medical training, often using construction-grade rather than medical-grade silicone.  This practice is extremely dangerous and can result in many adverse health consequences and even death. (p. 12)

6.  Finally, the California Department of Insurance noted that multiple studies have found that transgender people have higher employment rates and improvements in socioeconomic status after they have had access to transition-related care. (p. 12)

You can access the whole California Department of Insurance report at http://transgenderlawcenter.org/wp-content/uploads/2013/04/Economic-Impact-Assessment-Gender-Nondiscrimination-In-Health-Insurance.pdf

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