Publicly funded gender-affirming care is great for the economy, says new study

Publicly funded, appropriate gender-affirming care for transgender people could actually save millions for taxpayers and boost the economy, according to a new study.

Analysis from researchers in Australia found that vastly improving the accessibility of gender-affirming treatment through public funding would likely reduce financial pressures caused by psychological distress.

According to the data, trans Australians who haven’t started hormone therapy are 3.2-7 times more likely to access mental health services for issues such as gender dysphoria.

On average, unmedicated trans people use between 1.6 and 3.6 mental health services, including GP mental health plans or psychologist visits, each year. In comparison, the average Australian uses one service every two years.

However, after starting hormone therapy, the same population used between 0.3 and 2.6 fewer mental health services on average.

The study’s authors used these findings, as well as anonymous Medicare records on gender-affirming treatments between 2021-2024, to estimate the average financial burden on taxpayers caused by routine usage of mental health services.

The records suggest that, during that period, over 20,300 people aged 15+ started feminising hormones, over 11,800 started masculinising hormones, 2,872 adults underwent top surgery, while 826 underwent gender confirmation surgery.

Using the standard $100 cost for psychologist visits compared to gender-affirming treatment costs, they discovered the government was spending anywhere between $30-260 less per person after starting hormones.

This translated to gender-affirming surgeries, too. The government reportedly spends over $1,700 less on mental health coverage for trans patients after they had top surgery. For gender confirmation surgeries, it was saving around $3,416 per person over the following five years.

If the government increased gender-affirming surgery funding alone, its public health service Medicare would save a whopping $42 million over five years. Authors noted that the number is likely much higher because of the “significant unmet need” for gender-affirming care.

The report stipulated that, if the government paid $1,328 per person for 89 per cent of the patients receiving top surgery, the total cost would be around $14 million. Subtracting the $18.7 million it takes to fund the same patients’ use of mental health services, Medicare would save $4.6 million over the following five years.

It would also save over $37 million in taxpayer’s money by increasing funding for gender confirmation surgery, which costs an average of $19.9 million compared to the $57 million for mental health services.

This isn’t even counting hormone treatments, which are similarly cost-effective. Authors wrote that, in some cases, the money spent in mental health care and in others it leads to savings.

Not only would the move be economically sound, it would also vastly improve the quality of life for trans people across the country by hugely reducing dysphoria-related distress, according to the study’s findings.

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