To be clear, I am not endorsing the decision or criticising, I merely sought to state the fact of the change.

I believe it is important to be clear and factual when reporting and discussing such changes to avoid causing unnecessary panic, alarm and outrage. While the actual change is provided in an article linked from the one in the OP it isn't directly stated in this article.

The language used in the article makes this sound like a much more impactful change than I suspect it is.

“Section 708.” This clause would prohibit TRICARE from covering any medical treatments for gender dysphoria in transgender youth under 18 that “could result in sterilization.”

To address your points

But WHY do we need this?

It could be argued that those under 18, as minors and not adults, can not consent to sterilization. We know that human brains are still developing until around 26 years old, so allowing someone under 18 to make such an enormous life altering decision may be irresponsible of society. Again, I am not aiming to endorse this decision, merely trying to understand the possible logic behind it.

If this was never something that cost money why are we spending the time of our most expensive politicians in this?

Cost is hardly the only factor that should be considered when politicians are making decisions, ethical and moral factors should also apply, though I doubt many politicians are aware things such as morals exist.

idiotic meddling of politics in medicine

For better or worse healthcare for is political for everyone, even in countries with universal healthcare. Healthcare is an enormous part of the social fabric of nations, of their economy, and impacts everyone. Healthcare professionals can hardly be trusted to always act in the best interest of people (see the Tuskege experiments, lobotomies and more) and so laws must be passed and enforced.