A US public consultation on whether Medicare and Medicaid should cover gender reassignment surgery has been put on hold, with the Department of Health and Human Services saying they must first consider a challenge to Medicare’s definition of the surgery as “experimental”.

Neither Medicare, a government social insurance programme covering medical costs for groups such as the over-65s and young disabled people, nor Medicaid, a means-tested healthcare support programme, currently cover gender reassignment surgery.

The Centers for Medicare and Medicaid Services proposed to change this, and launched a public consultation on 29 March.

However, the consultation was put on hold later the same day, after an administrative challenge to the programmes’ current policy on gender reassignment was filed.

The policy, which dates back to 1981, states that Medicare will not cover gender reassignment, and calls it “experimental” surgery.

Supporters of changes to the policy say that gender reassignment surgery has been proven beneficial to trans people, and as such can no longer be considered experimental.

According to US political magazine The Hill, the proposal “was sure to attract criticism from Congress”, who were predicted to see it as a “controversial” use of taxpayer money.

A spokesperson for the Department of Health and Human Services said on Friday: “An administrative challenge to our 1981 Medicare national coverage determination concerning sex reassignment surgery was just filed.This administrative challenge is being considered and working its way through the proper administrative channels. In light of the challenge, we are no longer re-opening the national coverage determination for reconsideration.”

In August 2012 a senior official with the Department of Health and Human Services stated that federal health programmes and companies receiving federal dollars are barred from discriminating against trans people.