Michael Virtanen, AP

A panel advising Governor Andrew Cuomo on ways to revamp Medicaid has proposed that the program that pays for low-income residents' healthcare cover surgery and therapy for transgender New Yorkers. Cuomo earlier this year appointed a task force to overhaul the Medicaid system, which paid $53 billion for medical care in New York last year, and cut costs. A group of healthcare professionals examining disparities in coverage is expected to decide next week where the transgender proposal fits on its list of priorities.

Advocates say there's limited data on the state's transgender population, but the change could affect thousands of New Yorkers and help cut Medicaid costs for their mental health and drug abuse treatment. California and Minnesota already provide Medicaid coverage for transgender surgery and hormone replacement therapy, which the American Medical Association supports.

"The reason the AMA said this is medically necessary is if the transgender can't get services they need to live in the gender they are it leads to depression, suicide attempts, substance abuse," said Ross Levi, executive director of the Empire State Pride Agenda, which advocates for gay and transgender rights. The cost would be a tiny part of the Medicaid budget, a fraction of a percent, and overall could provide a net cost savings, he said.

Cuomo will consider task force recommendations in his budget, Health Department spokesman Peter Constantakes said. Legislators, who will vote on next year's spending plan, will also have a say. Spokesman Josh Vlasto said the governor's office has not yet reviewed the transgender proposal, and the panels' recommendations have not actually been made yet. "It doesn't seem to be appropriate," Republican Senate Health Committee Chairman Kemp Hannon told the New York Post, which first reported the transgender proposal Thursday.

Other issues Cuomo's task force is examining are basic benefits, behavioral health, long-term care, payment overhaul and systems design. Other proposals to address healthcare disparities include better data collection, ensuring effective contraception for all women of reproductive age, ensuring healthcare for low-income immigrant adults and covering obesity counseling and diabetes prevention.

Federal funds pay half of New York's Medicaid program, with the state paying 40 percent and localities 10 percent. The state already pays for hormone treatments for prisoners seeking to change their gender, if the therapy began before they were incarcerated. However, the state won't pay for the surgery.