New York Gov. Andrew Cuomo may be considering different ways to revamp the state's Medicaid system after a panel on Thursday proposed a possible change allowing coverage of sexual reassignment surgery for transgendered residents under the health care insurance program.

The program, where federal funds are used to pay half, 40 percent is paid by the state and 10 percent by localities, is geared to low-income residents' who seek health care coverage.

Earlier this year, Cuomo appointed a task force to overhaul the Medicaid system, which paid $53 billion for medical care in New York in 2010, and cut back on state expenses.

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, Ross Levi, executive director of the Empire State Pride Agenda, which advocates for gay and transgender rights, told the Associated Press.

Health care professionals examining disparities in coverage are expected to decide next week where the transgender proposal fits on its list of priorities.

The proposal says: Provide Medicaid coverage for transgender surgery/hormone replacement therapy and treatment.

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.

Currently, California and Minnesota provide Medicaid coverage for transgender surgery and hormone replacement therapy, which the American Medical Association supports.

The cost would be a tiny part of the Medicaid budget, a fraction of a percent, and overall could provide a net cost savings, Levi said.

(Associated Press)