A new Australian study suggests that expanding public funding for gender-affirming healthcare could save millions in mental health spending, making it beneficial for the economy while significantly improving the well-being of trans people.

Researchers analysing de-identified data from Medicare between 2012 and 2024 found that transgender Australians who had not yet accessed hormone therapy were far more likely to use mental health services compared to the general population.

On average, trans individuals accessed between 1.6 and 3.6 mental health services per year, including psychologist visits and GP mental health plans. By contrast, the average Australian uses one such service every two years.

Before starting hormone therapy, trans Australians were 3.2 to 7 times more likely to seek mental health support, often due to gender dysphoria. However, the study found a marked reduction in mental health service use after individuals began hormone treatment. Within five years of starting estrogen or testosterone-based therapy, participants used between 0.3 and 2.6 fewer services annually. Using the standard $100 government rebate for psychologist visits, researchers estimated savings of $30 to $260 per person each year following the beginning of hormone treatment.

The financial benefits were even more pronounced for those undergoing surgery. Adults who received chest (top) surgery required an average of $1,769 less in mental health-related Medicare spending over five years. For genital reconstruction (bottom) surgery, savings rose to $3,416 per person over the same period.

If gender-affirming surgeries were more broadly subsidised under Medicare, the researchers estimate the public health system could save nearly $42 million over five years. Currently, many gender-affirming surgeries are not consistently covered under Medicare, leaving individuals in Australia to pay between $20,000 and $100,000 out of pocket. Hormone therapies are subsidised through Australia’s Pharmaceutical Benefits Scheme, though access remains uneven across jurisdictions.

Beyond the economy, gender-affirming care has consistently been shown to reduce psychological distress, dysphoria and suicidal thoughts. Researchers emphasise the human impact. The findings now add evidence to the growing body of research.