Healthcare Costs Following Medical Gender‐Affirmation: Evidence From Whole‐of‐Population Australian Administrative Data

ABSTRACT Gender incongruence in trans and nonbinary (“trans”) populations is often associated with psychological distress and increased demand for mental healthcare. Gender‐affirming hormone therapy (GAHT) is a key component of care for many trans people, yet long‐term evidence around its cost implications remains limited despite increasing uptake and policy attention worldwide. We provide the first population‐based evidence on the healthcare costs of GAHT initiation using longitudinal administrative data from 32, 313 trans Australians who initiated testosterone‐based GAHT (tGAHT) or estradiol‐based GAHT (eGAHT) between 2013 and 2024. Employing a dynamic difference‐in‐differences design, we estimate the impacts on government expenditure and patient out‐of‐pocket costs in the 6 years after initiation, using future initiators as controls. We find that initiating tGAHT leads to an additional AUD3119 (USD2246) in government expenditure and AUD143 (USD103) in out‐of‐pocket costs over 6 years; corresponding estimates were AUD8348 (USD6011) and AUD1269 (USD914) for eGAHT recipients. For tGAHT recipients, both government and out‐of‐pocket costs declined after initiation, with mental healthcare reductions exceeding ongoing hormone therapy expenditure after 6 years. For eGAHT recipients, costs also fell but remained above baseline, driven by sustained prescription spending. Taken together with quality‐of‐life benefits, our results suggest GAHT is likely to be cost‐effective.