WPATH Clarification on Medical Necessity of Treatment, Sex Reassignment, and Insurance Coverage for Transgender and Transsexual People Worldwide
The World Professional Association for Transgender Health (WPATH) is an international association devoted to the understanding and treatment of individuals with gender identity disorders. Founded in 1979, and currently with over 600 physician, psychologist, social scientist, and legal professional members, all of whom are engaged in research and/or clinical practice that affects the lives of transgender and transsexual people, WPATH is the oldest interdisciplinary professional association in the world concerned with this specialty.
Gender Identity Disorder (GID), more commonly known as transsexualism, is a condition recognized in the Diagnostic and Statistical Manual of Mental Disorders, (DSM-IV, 1994, and DSM-IV-TR, 2000), published by the American Psychiatric Association. Transsexualism is also recognized in the ICD Classification of Mental and Behavioural Disorders, tenth revision, as endorsed by the Forty-third World Health Assembly in May 1990, and came into use in WHO Member States as of 1994.
The criteria listed for Gender Identity Disorders (GID) (at F.64) including transsexualism (at F.64.0) are descriptive of many people who experience dissonance between their sex as assigned at birth and their gender identity, which is developed in early childhood and understood to be firmly established by age 4, though for some transgender individuals, gender identity may remain somewhat fluid for many years. The ICD 10 descriptive criteria were developed to aid in diagnosis and treatment to alleviate the clinically significant distress and impairment known as gender dysphoria that is often associated with transsexualism.
The WPATH Standards of Care for Gender Identity Disorders were first issued in 1979, and articulate the "professional consensus about the psychiatric, psychological, medical and surgical management of GID." Periodically revised to reflect the latest clinical practice and scientific research, the Standards also unequivocally reflect this Association's conclusion that treatment is medically necessary. Medical necessity is a term common to health care coverage and insurance policies in the United States, and a common definition among insurers is:
"[H]ealth care services that a Physician, exercising prudent clinical judgment, would provide to a patient for the purpose of preventing, evaluating, diagnosing or treating an illness, injury, disease or its symptoms, and that are: (a) in accordance with generally accepted standards of medical practice; (b) clinically appropriate, in terms of type, frequency, extent, site and duration, and considered effective for the patient's illness, injury, or disease; and (c) not primarily for the convenience of the patient, physician, or other health care provider, and not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that patient's illness, injury or disease. 
"Generally accepted standards of medical practice means standards that are based on credible scientific evidence published in peer-reviewed medical literature generally recognized by the relevant medical community, Physician Specialty Society recommendations and the views of Physicians practicing in relevant clinical areas and any other relevant factors."
The current Board of Directors of the WPATH herewith expresses its conviction that sex (gender) reassignment, properly indicated and performed as provided by the Standards of Care, has proven to be beneficial and effective in the treatment of individuals with transsexualism, gender identity disorder, and/or gender dysphoria. Sex reassignment plays an undisputed role in contributing toward favorable outcomes, and comprises Real Life Experience, legal name and sex change on identity documents, as well as medically necessary hormone treatment, counseling, psychotherapy, and other medical procedures. Genital reconstruction is not required for social gender recognition, and such surgery should not be a prerequisite for document or record changes; the Real Life Experience component of the transition process is crucial to psychological adjustment, and is usually completed prior to any genital reconstruction, when appropriate for the patient, according to the WPATH Standards of Care. Changes to documentation are important aids to social functioning, and are a necessary component of the pre-surgical process; delay of document changes may have a deleterious impact on a patient's social integration and personal safety.
Medically necessary sex reassignment procedures also include complete hysterectomy, bilateral mastectomy, chest reconstruction or augmentation as appropriate to each patient (including breast prostheses if necessary), genital reconstruction (by various techniques which must be appropriate to each patient, including, for example, skin flap hair removal, penile and testicular prostheses, as necessary), facial hair removal, and certain facial plastic reconstruction as appropriate to the patient.
"Non-genital surgical procedures are routinely performed... notably, subcutaneous mastectomy in female-to-male transsexuals, and facial feminization surgery, and/or breast augmentation in male-to-female transsexuals. These surgical interventions are often of greater practical significance in the patient's daily life than reconstruction of the genitals." 
Furthermore, not every patient will have a medical need for identical procedures; clinically appropriate treatments must be determined on an individualized basis with the patient's physician.
The medical procedures attendant to sex reassignment are not "cosmetic" or "elective" or for the mere convenience of the patient. These reconstructive procedures are not optional in any meaningful sense, but are understood to be medically necessary for the treatment of the diagnosed condition.  Further, the WPATH Standards consider it unethical to deny eligibility for sex reassignment surgeries or hormonal therapies solely on the basis of blood seropositivity for infections such as HIV or hepatitis.
These medical procedures and treatment protocols are not experimental: decades of both clinical experience and medical research show they are essential to achieving well-being for the transsexual patient. For example, a recent study of female-to-male transsexuals found significantly improved quality of life following cross-gender hormonal therapy. Moreover, those who had also undergone chest reconstruction had significantly higher scores for general health, social functioning, as well as mental health. 
"In over 80 qualitatively different case studies and reviews from 12 countries, it has been demonstrated during the last 30 years that the treatment that includes the whole process of gender reassignment is effective." 
Available routinely in Europe and in many other countries, these treatments are cost effective rather than cost prohibitive. In Europe, , numerous state health service providershave negotiated contracts with their insurance carriers to enable medically necessary treatment for transsexualism and/or GID to be provided to covered individuals. The European Court has also upheld gender reassignment as a valid health treatment to be provided by European States (L v Lithuania  ECHR (case no. 27527/03)). All states in Europe now provide treatment routeways for transsexual people. Increasingly, insurers are being obliged to realize the validity and effectiveness of treatment , and coverage is being offered, increasingly at no additional premium cost.
"Professionals who provide services to patients with gender conditions understand the necessity of SRS, and concur that it is reconstructive, and as such should be reimbursed, as would any other medically necessary treatment." 
The WPATH Board of Directors urges state healthcare providers and insurers throughout the worldto eliminate transgender or trans-sex exclusions and to provide coverage for transgender patients including the medically prescribed sex reassignment services necessary for their treatment and well-being, and to ensure that their ongoing healthcare (both routine and specialized) is readily accessible.
This clarification constitutes the professional opinion of the signatories below, comprised of all members of the WPATH Board of Directors and Executive Officers as of this date, June 17, 2008.
Stephen Whittle, Ph.D., O.B.E. (UK) President
Walter Bockting, Ph.D. (USA) President Elect
Stan Monstrey, M.D. (Belgium) Past President
George Brown, M.D. (USA) Secretary-Treasurer
Michael Brownstein, M.D. (USA)
Griet DeCuypere, M.D. (Belgium)
Randi Ettner, Ph.D. (USA)
Lin Fraser, Ed.D., MFT (USA)
Jamison Green, MFA (USA)
Katherine Rachlin, Ph.D. (USA)
Beatrice "Bean" E. Robinson, Ph.D. (USA) Executive Director
 American Academy of Pediatrics, 1999
 Definition taken from 2007 Blue Cross Blue Shield Settlement available at www.hmosettlements.com
 Monstrey S, De Cuypere G, Ettner R,.(2007) . Surgery: General Principles. In Ettner R et al (eds) Principles of Transgender Medicine and Surgery. New York:Haworth Press:2007.p.90.
 Victoria L. Davidson v. Aetna Life & Casualty Insurance Co. 101 Misc.2d 1, 420 N.Y.S.2d 450 (Sup. Ct., 1979). Judges found that "...the treatment and surgery...is of a medical nature and is feasible and required for the health and well-being of the patient."
 Newfield E, et al (2006). Female-to-male quality of life. In Quality of Life Research. Springer.
 Pfäfflin F, Junge A. (1998). Sex Reassignment. Thirty Years of International Follow-up Studies After Sex Reassignment Surgery: A Comprehensive Review, 1961-1991 (quotation from the Final Remarks section). (Translated from German into American English by Roberta B. Jacobson and Alf B. Meier).
 Monstrey S, De Cuypere G, Ettner R,.(2007) . Surgery: General Principles. In Ettner R et al (eds) Principles of Transgender Medicine and Surgery. New York: Haworth Press:2007.p.94.