Here's the pdf of VA Directive 2013:
http://www.va.gov/vhapublications/ViewPublication.asp?pub_ID=2863Not really a gray area:
6. Will VA provide sex reassignment surgery and plastic reconstructive surgery if needed?
VA does not provide sex reassignment surgery in VA facilities or through non VA care. In
addition, VA does not provide plastic reconstructive surgery for strictly cosmetic purposes in VA
facilities or through non VA care. However, patients with GID or other gender dysphoria conditions
may elect to have one or more medical or surgical procedures over their lifetime to bring their bodies in
to a closer alignment with their perceived gender.
NOTE:
Only a minority of transgender Veterans will undergo sex reassignment surgery, as their symptoms may often be
adequately treated with other therapeutic interventions. Some Veterans receiving care at the VA
may have had sex reassignment surgery somewhere else. The VA does provide health care to
pre- and post-operative transsexual Veterans, including treatment of surgical complications.