i think the stance that the alberta government took on this issue is pretty damn close to perfect. they obviously look at it as a light necessity that can be cancelled when money gets tight, but if circumstances allow it would be granted.

it's definitely a psychological issue in the sense that the person will not die if they don't have the surgery, but that doesn't rule out it being "necessary". The more refined a person is the more refined his/her sensitivities become. A hungry "man-trapped-in-a-woman's-body" would certainly feel its more important to eat than have a transgender operation. However, if all the basic needs are met then i can definitely see how this would be an important issue to him/her which would make it a "necessity".