The Rand study estimated extending gender transition-related health care coverage to active duty transgender service members would increase health care costs "by between $2.4 million and $8.4 million annually, representing a 0.04- to 0.13-percent increase in active-component health care expenditures".
"The basis for this directive is very much our national security needs and things like military readiness, effectiveness, lethality, unit cohesion, etc", said the official, who spoke on a condition of anonymity to discuss the details of the policy.
President Donald Trump has directed the Pentagon to declare an indefinite ban on transgender individuals joining the military.
Trump also directed the departments of Defense and Homeland Security "to determine how to address transgender individuals now serving based on military effectiveness and lethality, unitary cohesion, budgetary constraints, applicable law, and all factors that may be relevant", a White House official told CNN.
That formal notification came in a presidential memorandum Trump signed Friday, the White House official said.
The order temporarily protects transgender people already serving in the military, directing that "no action may be taken against such individuals" until the secretary of Defense comes up with an implementation plan.
The official signaled that the administration was returning to the military's pre-2016 policy under which no transgender individuals were allowed to serve openly in the armed forces, but said Trump was giving the secretaries of defense and homeland security leeway to determine the policy on now serving transgender troops.
Their futures will now be decided by Secretary of Defense James Mattis.
Last month, Trump announced in a series of Tweets that he would be banning Transgender people from the military. there was a lot of outcry about the move and the fact that it was reversing part of legislation Obama had put into place.
The tweets came with little apparent coordination with the Pentagon, resulting in speculation about the fate of between 1,320 and 15,000 transgender personnel already serving. The new White House memo will extend the ban indefinitely until "such time that the defense secretary recommends against the contrary", the official said.
"A billion-dollar witch hunt targeting thousands of current service members will not save the taxpayers money or strengthen the military but will cause disruptions and undermine military readiness, just as the failed "don't ask, don't tell" policy did", said Aaron Belkin, director of the Palm Center.
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