There was a momentary possibility that Medicaid in the State of New York would cover sex reassignment surgery. That quickly disappeared. Now, there are a number of good reasons that such surgery should be covered. For one, it is medically necessary for transsexuals. Unfortunately, the surgery was mislabeled as "transgender" surgery, and the usual kooks and extremists came out of the wood work and started pushing for it.
The opens the door for conservatives to start in about how we should not be indulging these disturbed people, and how limited resources should not be wasted.
Now, the truth is, those pushing for such coverage would likely never take advantage of it. The overwhelming majority are life-time members of the "They Will Take My Penis When They Pry My Cold Dead Fingers From It" Club. Oh, they will whine about how they "would" have the surgery if only it was not so expensive, and how they wish it was covered, but let's be serious...they often have had numerous chances to have the surgery, and even when such people have it offered they rarely take advantage.
When San Francisco approved providing surgery for city workers, the number taking advantage was surprisingly low. The same thing was the result when the University of California made it part of their medical benefits. The truth is, transsexuals are actually very rare. Transgender people don't want to change their sex. That would spoil the fun.
But, they are quick to come out of the woodwork and scare authorities into declining to provide them with a benefit they demand, but will never use, thus denying it to those who really need it.