The Obama administration has overturned a three-decade policy that has denied Medicare coverage to those seeking sex-change surgery, a move hailed by transgender rights organizations.

The independent appeals board of the Department of Health and Human Services issued its decision in a suit brought in 2013 by 74-year-old Denee Mallon of Albuquerque, a transgender woman and army veteran who had asked Medicare to cover the procedure.

The ban on Medicare coverage for gender reassignment surgery dates to 1981 when the procedures were classified as experimental, but most medical authorities now consider it an appropriate option for sufferers of gender dysphoria.

Gender dysphoria is officially defined as an "incongruence," or intense discomfort, with one's birth sex.

The ban on Medicare coverage is "no longer reasonable," the appeals board ruled, citing current medical opinion that the procedure is both effective and safe and should no longer be thought of as experimental.

Mallon says she was pleased by the board's decision.

"This is a big, big decision; I've wanted the operation since I was probably 11 years old and knew about it," says Mallon, born as a male but who has lived many years as a woman, emphasizing she identifies herself as a woman.

After a request for the surgery was rejected, Mallon went to court to challenge the exclusion policy in Medicare coverage, with the Transgender Rights Project of Gay and Lesbian Advocates and Defenders filing the suit on Mallon's behalf.

Project director Jennifer Levi applauded the board's ruling.

"The decision brings federal Medicare policy up to 21st-century standards for transgender people, and acknowledges that there's no scientific or medical basis for categorically excluding coverage of sex reassignment surgery for people who need it," she said.

While Medicare coverage involves just people 65 years of age and up, and transgender people account for only 0.3 percent of the adult U.S. population, the board's decision is likely to have a wide impact as private insurance provides often follow the lead of Medicare in what health procedures should be covered.

An increasing number of large companies, including some well-known Fortune 500 firms, have begun covering sex-reassignment services.

As for Mallon, she says she's looking forward to the surgery to have her genitalia changed to be in alignment with her own gender identification.

"I expect a certain amount of criticism because of my age -- generally you're considered over the hill at 70, why have an operation -- but it's a medical decision, and I want congruence between what I am as a human and my body," she says.

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