A federal board ruled Friday in favor of a 74-year-old veteran seeking to have Medicare cover the costs of her gender reassignment surgery, a landmark decision that recognizes it as a necessary medical procedure.

The decision by the Department of Health and Human Services overturns a longstanding rule preventing the government health insurance program from covering such procedures and opens the doors for other Medicare enrollees to make similar requests. It comes at a time when states are beginning to prohibit insurance companies from including specific exclusions for treatments related to gender transitions. So far, five states—California, Vermont, Oregon, Connecticut and Colorado, as well as Washington, D.C.—have prohibited such exclusions. Organizations like the Oakland, Calif.-based Transgender Law Center are fighting for more states to follow suit.

Though numbers are far from concrete, studies estimate that that 0.5% of the U.S. population is transgender, meaning that they identify with a gender other than the sex they were assigned at birth. Not all of the country’s estimated 1.5 million transgender citizens desire reassignment surgery, a serious procedure that alters a person’s sexual characteristics. That decision may depend on the desire to have children or physical preference, fear of surgery or having other health conditions that would make such surgery risky, as well as the cost of surgery.

(MORE: The Transgender Tipping Point)

The National Transgender Discrimination Survey, a 2011 report that is the most comprehensive source for data on transgender-related issues, found that the majority of its 6,500 respondents desired surgery of some kind. However, many couldn’t afford to undergo such procedures.

“The high costs of gender-related surgeries and their exclusion from most health insurance plans render these life-changing … and medically necessary procedures inaccessible to most transgender people,” the report concluded.

Transgender people who desire surgery will likely be diagnosed with severe gender dysphoria, a diagnosis recognized by the American Psychiatric Association. Jamison Green, president of the World Professional Association of Transgender Health, describes gender dysphoria as discomfort with the gender in which one is living or expected to live in.

“We’re very excited about it,” Green tells TIME of the ruling. “Now there is considerable evidence that shows that this is a valid condition, that the treatment is effective … it can be disabling if it’s not treated.”

Write to Katy Steinmetz at katy.steinmetz@time.com.