A new study by a transgender advocacy group says providing transgender sex-change surgery at the Veterans Affairs Department would cost no more than about $21 million a year -- about one one-hundredth of one percent of the VA's annual budget.

"Absent some extraordinary expense, we don't make veterans fight among each other about who deserves medically necessary care," Aaron Belkin, who directors the Palm Center, which advocates for transgender rights, said in a statement.

A previously proposed new VA rule would have allowed sex-change surgeries for veterans. But the policy was scrapped over questions of how to pay for it, and removed from the biannual publication of proposed federal rules.

A 2011 Obama Administration executive order requires all proposed rules to also include details on how the agency will fund the change. When the VA did not provide that with their policy proposal, the Office of Management and Budget rejected the submissions, VA officials said.

The Palm Center produced the report, which was released Thursday. The report estimates that about 687 veterans would seek the surgery, at a cost of $20.6 million for gender transition related care. The center based their estimate on VA’s 2015 budget, which was $153.8 billion. The VA’s budget for 2017 is $176.9 billion.

Palm Center officials said the VA should not need to come up with special funding to provide the sex-change operations. The department, they said, already pays for transgender hormone therapy, mental health counseling and long-term post-sex change care. And the system also covers for other veterans many of the surgeries transgender veterans need for their sex-change surgeries, Belkin said.

"The VA offers many of the surgeries that transgender veterans needs, such as hysterectomies, to non-transgender veterans, so it is unfounded to claim that congressional approval is required to provide specific procedures," he said.

Officials with the VA, speaking on background, said they respect the study, but cannot substantiate the cost estimate at this time.

Increasing transgender care at the VA is seen as an urgent issue by the LGBT military community as a new presidential administration steps into office. Although incoming president Donald Trump, a republican, has not specifically laid out a transgender plan, his past statements on the subject have been seen as inconsistent and sometimes negative.

Kristen Beck, a transgender former Navy SEAL, said she sees the VA decision to pull the rule as "stonewalling."

"I can't believe they're making more issues out of something to stonewall it -- it's just a stonewalling tactic," she said. "It's a little upsetting."

Beck fears that rehashing the transgender surgery issue on a veterans benefits level will just resurrect other controversial transgender topics, like which bathroom transgender people are permitted to use.

"It starts dragging us through the mud," she said. "I fought for life, liberty and happiness -- and I'm not allowed to have it myself."

-- Amy Bushatz can be reached at amy.bushatz@military.com. Follow her on Twitter at @amybushatz.