Mandatory Spending
Function 700 - Veterans' Benefits and Services
Narrow Eligibility for Veterans’ Disability Compensation by Excluding Certain Disabilities Unrelated to Military Duties
CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.
| Billions of Dollars | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2019- 2023 |
2019- 2028 |
|
| Change in Outlays | |||||||||||||
| Exclude certain disabilities from veterans' disability compensation | 0 | -2.4 | -3.3 | -3.5 | -3.6 | -3.7 | -3.9 | -4.0 | -4.2 | -4.4 | -12.7 | -33.0 | |
| Exclude certain disabilities from veterans' disability compensation for new applicants | 0 | * | -0.1 | -0.2 | -0.3 | -0.4 | -0.5 | -0.6 | -0.7 | -0.8 | -0.7 | -3. 6 | |
This option would take effect in January 2020.
* = between -$50 million and zero
Background
Veterans may receive disability compensation from the Department of Veterans Affairs (VA) for medical conditions or injuries that occurred or worsened during active-duty military service. Such service-connected disabilities range widely in severity and type, from migraines and treatable hypertension to the loss of limbs. VA also provides dependency and indemnity compensation (DIC)—payments to surviving spouses or children of a veteran who died from a service-related injury or disease. The Department of Defense (DoD) has a separate compensation system for service members who can no longer fulfill their military duties because of a disability.
Not all service-connected medical conditions and injuries are incurred or exacerbated in the performance of military duties. For example, a qualifying injury could occur when a service member was at home or on leave, and a qualifying medical condition, such as Parkinson's disease, could develop independently of a service member's military duties. In 2017, VA paid a total of $2.7 billion, the Congressional Budget Office (CBO) estimates, to compensate for seven medical conditions that, according to the Government Accountability Office (GAO), military service is unlikely to cause or aggravate. Those conditions are arteriosclerotic heart disease, chronic obstructive pulmonary disease, Crohn's disease, hemorrhoids, multiple sclerosis, osteoarthritis, and uterine fibroids. There were 758,085 instances of those conditions in 2017.
Option
Beginning in January 2020, this option would cease veterans' disability compensation for the seven medical conditions GAO identified. Under the option's first alternative, veterans now receiving compensation for those conditions would have their compensation reduced or eliminated, and veterans who applied for compensation for those conditions in the future would not be eligible for it. The second alternative would affect only new applicants for disability compensation. The option would not alter DoD's disability compensation system.
Effects on the Budget
By CBO's estimates, the savings from the first alternative, in which VA would no longer make payments to all veterans for the seven medical conditions, would be $33 billion between 2020 and 2028. Most of the savings would result from curtailing payments to current recipients of disability compensation. In 2020, VA would no longer provide compensation for about 846,000 cases of those seven conditions, CBO estimates. That number would rise to 976,000 cases in 2028. (The number of veterans affected by the option would be fewer than the number of cases because some veterans would have more than one of the seven conditions.) In addition, CBO estimates that veterans' loss of eligibility for the seven conditions would result in fewer cases of DIC. The option would result in about 1,200 fewer of those cases in 2028, CBO estimates.
Savings from the second alternative, in which only new applicants for disability compensation would be ineligible to receive payments for the seven conditions, would be about $4 billion over the 2020-2028 period, CBO estimates. The number of cases for which VA would not provide compensation would increase from 15,000 in 2020 to approximately 225,000 by 2028.
The largest source of uncertainty in estimating the savings from this option is the estimate of the population receiving benefit payments for each of the seven conditions. CBO projects the number of veterans receiving payments for those conditions on the basis of historical information on the number of veterans receiving a disability rating for such conditions, the growth of the overall disability compensation program, the mortality rate of the disability compensation population, and other factors. Savings per veteran are estimated by calculating the average rating and payment for each of the seven conditions and reducing the veteran's payment by a corresponding amount.
Other Effects
An argument in support of this option is that it would make the disability compensation system for military veterans more comparable to civilian systems. Few civilian employers offer long-term disability benefits, and among those that do, benefits do not typically compensate individuals for all medical problems that developed during employment.
An argument against this option is that veterans' compensation could be viewed as a lifetime indemnification the federal government owes to people who become disabled to any degree during service in the armed forces.