A federal health board has ruled Friday that Medicare can pay for sex-change surgeries for transgender patients, the Associated Press said.

The Departmental Appeals Board at the Department of Health and Human Services overturned a 1981 ruling against reassignment surgeries that argued the procedures were potentially dangerous and called it "experimental." Part of the reasoning for the change was that the procedures have become safer and more consistent. It also lines up with President Barack Obama's LGBT-friendly policies.

Gender reassignment surgery is addressed under the National Coverage Determination (NCD) section number 140.3. The NCD lists nationwide determinations for what is covered under Medicare. The 1981 determination lists "transsexual surgery" as "the culmination of a series of procedures designed to change the anatomy of transsexuals to conform to their gender identity."

Under "Indications and Limitations of Coverage," the 1981 NCD ruling says "Transsexual surgery for sex reassignment of transsexuals is controversial. Because of the lack of well controlled, long term studies of the safety and effectiveness of the surgical procedures and attendant therapies for transsexualism, the treatment is considered experimental. Moreover, there is a high rate of serious complications for these surgical procedures. For these reasons, transsexual surgery is not covered."

Earlier this year the American Civil Liberties Union, Gay & Lesbian Advocates & Defenders and the National Center for Lesbian Rights challenged the ruling on behalf of 74-year-old Army veteran Denee Mallon who suffered from gender dysphoria, also known as gender identity disorder. Mallon's doctors recommended a sex-change operation and the issue was brought up to the Department of Health and Human Services.

The ruling could encourage private insurance providers to reassess their coverage for the surgeries.