A proposed rule change that would have allowed sex-change surgeries for transgender veterans through the Department of Veterans Affairs has been scrapped amid questions over how to pay for it.

"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 appropriated funding is available," according to a statement from the department to Military.com. "Therefore, this regulation will be withdrawn from the Fall 2016 Unified Agenda."

The department currently covers hormone therapy, mental health care, preoperative evaluation and long-term care after a sex reassignment surgery for qualified veterans, officials said. The change would have added gender reassignment surgery to that list.

The so-called Unified Agenda, a bi-annual publication of proposed regulation changes, is due Monday. But the sex-change surgery rule that was set to be included was kicked back by the Office of Management and Budget because the VA did not include a plan for how they would fund the change, a senior department official said.

A 2011 executive order issued by President Barack Obama requires agencies to take costs into account when proposing rule changes. The sex-change operation rule's rejection by the OMB doesn't mean they don't support the change, the official said -- just that the office needs to see funding plans for it.

VA officials notified members of Congress of their decision to exclude the change in a letter sent on Monday. The VA first proposed the rule change in June in the Federal Register. Its removal from agenda release could leave the change in jeopardy as Obama officials and Democrat political appointees with the VA prepare for a hand-off to President-elect Donald Trump, a Republican.

Trump has not yet spelled-out his stance on transgender medical treatment within the military or VA. In the past his stance has been seen as contradictory. He has both said he would repeal an Obama administration directive for schools nationwide to allow transgender students to use the bathroom of their choice and protect transgender people under the law.

A ban on openly serving transgender troops was lifted in June when the Defense Department announced that it would pay for sex-change operations for qualifying transgender troops. Tricare does not cover sex-change operations for military family members or retirees.

Leila Ireland, a transgender former soldier who served in the Army as a male and was medically retired last year, said the decision is frustrating but not surprising given the results of the election.

"It's very frustrating to even see or hear that they are doing that because of all the work that many people before me have done," she said. "But it's important to remember that even though they are changing their minds right now, there's going to be a way and we're going to find that way. Everything happens for a reason and we're not going to be set back."

Other military family advocates said they hope the military community will continue to fight for transgender benefits.

"All of our nation's veterans, regardless of their gender identity, deserve access to the medical care they earned serving our nation. This is a deeply disappointing setback in making sure an often medically necessary procedure is part of that care," Ashley Broadway, president of the American Military Partners Association, which advocates for gay, lesbian, bi-sexual and transgender troops and families, said in a statement.

"We implore fair-minded Americans to stand united in holding our new administration officials accountable by insisting this be fixed," she said.

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