On July 26, 2017, President Donald Trump tweeted that, “the United States government will not accept or allow transgender individuals to serve in any capacity in the U.S. Military.” According to the President, “Our military … cannot be burdened with the tremendous medical costs,” presumably referring to the cost of providing medically necessary transition-related health care to transgender personnel.
While commentators and scholars have addressed financial costs associated with the provision of such care, we are not aware of any analysis of the costs of discharging transgender personnel from the armed forces. If decisions concerning whether to allow transgender personnel to serve are based 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.
In this policy memo, we estimate that the financial cost of fully implementing President Trump’s ban on transgender service members would be $960 million. In addition, we compare the cost of fully implementing the ban to the cost of providing medically necessary transition-related 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 President Trump’s ban is more than 100 times greater than the annual cost of retaining transgender service members and providing for their health care needs.
Several standard methodological approaches can be used to estimate the cost of discharging service members, each with specific data needs and each well-documented in the research and policy literature. For this analysis, we use a replacement-cost method that assumes the military must pay to recruit and train one replacement service member for each individual who is discharged. To derive the estimate reported here, we multiply the number of service members who will be discharged by the cost of recruiting and training one replacement. In the next section of our report, we review several approaches for calculating implementation costs and explain why we utilize the replacement-cost approach. Read more via the Palm Center