Discharging Transgender Troops Would Cost $960 Million

On July 26, 2017, President Donald J. Trump stated his intention to prohibit transgender persons from serving “in any capacity” in the U.S. military. This would include those who might apply to join the armed forces as well as those who are currently serving. According to the President, “Our military . . . cannot be burdened with the tremendous medical costs,” presumably referring to the cost of medically necessary, transition-related health care for transgender personnel. Commentators and scholars have addressed the financial costs associated with providing such care, but no previous analysis thus far has estimated the costs of discharging transgender personnel from the armed forces. If a decision to discharge currently serving transgender personnel is based largely on financial considerations, then policymakers should take into account the costs of discharging the service members, not just the costs of retaining them under a policy of equal treatment. The present study employs a “replacement-cost method” to calculate the overall cost of removing transgender personnel. Assuming the military must recruit and train a replacement for each service member discharged, the total price of a complete ban is derived by multiplying the number of service members who will be discharged by the cost of recruiting and training a replacement. The authors use a conservative estimate of the number of transgender personnel currently serving, drawn from research published in the New England Journal of Medicine. The cost of health care is an upper-bound estimate calculated by analysts at the RAND Corporation. The study does not include administrative costs and lost time for military personnel tasked with identifying transgender members and overseeing their separation, or government costs associated with legal challenges by those targeted for separation. The authors estimate that the financial cost of fully implementing a ban on transgender service members, as initially proposed by the President, would be $960 million. In addition, the authors compare the cost of fully implementing the ban to the cost of providing medically necessary health care to transgender personnel. Given that the total annual cost of providing such care is, at most, $8.4 million, the $960 million price tag of fully implementing the President’s proposed ban is more than 100 times greater than the annual cost of retaining transgender service members and providing for their health care needs