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

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 AUD$3119 (USD$2246) in government expenditure and AUD$143 (USD$103) in out-of-pocket costs over 6 years; corresponding estimates were AUD$8348 (USD$6011) and AUD$1269 (USD$914) 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.