The Department of Veterans Affairs (VA) has withdrawn a proposed rule change that would have allowed transgender veterans to receive sex reassignment surgeries through the VA.

According to, the proposed rule change was scrapped over lack of funding.

“VA has been and will continue to explore a regulatory change that would allow VA to perform gender alteration surgery and a change in the medical benefits package, when appropriate funding is available,” the department said in a statement given to “Therefore, this regulation will be withdrawn from the Fall 2016 Unified Agenda.”

Officials said that the department would continue covering hormone therapy, mental health care and pre- and post sex reassignment surgery care for transgender veterans.

The Department of Defense in June lifted its ban on transgender troops serving openly.

Ashley Broadway-Mack, president of The American Military Partner Association (AMPA), called the news “a deeply disappointing setback in making sure an often medically necessary procedure for transgender veterans is part of that care.”

“All of our nation's veterans, regardless of their gender identity, deserve access to the medical care they earned serving our nation,” she added.