July 11, 2012
Iraq and Afghanistan
Jul 2012 - CBO projects that DoD’s plans will cost $123 billion, or 5 percent, more to execute through 2017 than DoD estimates. CBO also projects that the cost of DoD’s plans will exceed the limits established in the Budget Control Act.
The Veterans Health Administration's Treatment of PTSD and Traumatic Brain Injury Among Recent Combat Veterans
February 9, 2012
Through September 2011, about 740,000 veterans from overseas contingency operations in Iraq and Afghanistan had been treated by the Veterans Health Administration (VHA). That number is slightly more than half of all recent veterans eligible for care by VHA.
VHA spent about $2 billion in fiscal year 2010 to provide medical care to all recent combat veterans.
One in Four Recent Combat Veterans Treated at VHA from 2004 to 2009 Had a Diagnosis of PTSD; 7 Percent Had a Diagnosis of TBI
Using data for recent veterans treated by VHA from 2004 to 2009, CBO found that:
- 21 percent were diagnosed with post-traumatic stress disorder (PTSD) but not traumatic brain injury (TBI),
- 2 percent were diagnosed with TBI but not PTSD,
- An additional 5 percent had both PTSD and TBI, and
- The remaining 72 percent had neither diagnosis.
Treating Recent Combat Veterans Diagnosed with PTSD, TBI, or Both Was Much More Expensive Than Treating Other Recent Veterans
|Average Costs for |
First Year of Treatment
|With PTSD and TBI||$13,800|
|Recent Veterans with Neither Condition||$2,400|
Those amounts do not include initial care provided by the Department of Defense (DoD) or care by other providers outside of VHA. For comparison, VHA estimates that the average cost of care in 2011 for veterans of all eras will be $9,100.
VHA’s average costs for patients were highest during the first year of their care and declined and then stabilized in subsequent years. In the data CBO analyzed, VHA’s average costs for patients with TBI (including those with both TBI and PTSD) appear to increase in the third and fourth years. That result is probably generated by a policy change (occurring in the middle of the period CBO analyzed) related to screening for mild TBI. Without that change, costs for those patients would probably also have been highest during the first year of care and declined and stabilized thereafter.
Those results exclude about 500 patients with severe multiple injuries that received treatment in VHA's polytrauma centers; costs for those patients were significantly higher.
VHA’s Experience May Not Reflect the Rates of (or the Costs of Treating) PTSD or TBI in the Overall Population of Recent Combat Veterans
CBO’s study examines data from veterans who sought treatment at VHA. Those data may not be representative of the overall population of recent veterans. A great deal of uncertainty surrounds the prevalence of PTSD and TBI within the population that deployed to Iraq and Afghanistan.
Other researchers have estimated that:
- Between 5 percent and 25 percent of those deployed to Iraq and Afghanistan may have PTSD when screened for the disorder after returning from deployment, and
- Between 15 percent and 23 percent have experienced a TBI (the vast majority of which are mild TBIs, also known as concussions), though the proportion still symptomatic when screened after returning to the United States is much lower—between 4 percent and 9 percent—because most mild TBIs get better within a few months.
Long-Term Implications of the 2011 Future Years Defense Program
February 11, 2011
In most years, the Department of Defense (DoD) provides a five- or six-year plan, called the Future Years Defense Program (FYDP), associated with the budget that it submits to the Congress. Because decisions made in the near term can have consequences for the defense budget well beyond that period, the Congressional Budget Office (CBO) has examined the programs and plans contained in DoD's FYDP and projected their budgetary impact in subsequent years. For this analysis, CBO used the FYDP provided to the Congress in April 2010, which covers fiscal years 2011 through 2015—the most recent plan available when this analysis was conducted. CBO's projections span 2011 through 2028.
In February 2010, DoD requested an appropriation of $707 billion for 2011. Of that amount, $548 billion was to fund the "base" programs that constitute the department's normal activities, such as the development and procurement of weapon systems and day-to-day operations of the military and civilian workforce. The remaining $159 billion was requested to pay for overseas contingency operationsthe wars in Afghanistan and Iraq and other military activities elsewhere. CBO focused its analysis on the base budget because it reflects DoD's future plans for manning, training, and equipping the military.
CBO has projected the costs of DoD's plans for its base budget (reflected in the FYDP, along with other long-term plans released by the department) by using factors that are consistent with the department's recent experience. CBOs analysis yields these conclusions:
- To execute its base-budget plans for the period covered by the FYDP, DoD would need about $187 billion (or 7 percent) more over those five years than if funding was held at the 2010 level of $537 billion. Over the 10 years from 2012 to 2021, DoD would need a total of $680 billion (or 13 percent) more than if funding was held at the 2010 level.
- From 2011 to 2015, DoD's base budget would grow at an average annual rate of 2.3 percent, after an adjustment for inflation. Beyond the FYDP period, from 2016 to 2028, average annual growth in the costs of DoD's base-budget plans would be 0.8 percent after an adjustment for inflation. At those rates, DoD's base budget would rise from $548 billion in 2011 to $601 billion in 2015 and to $665 billion in 2028.
- The primary cause of long-term growth in DoD's budget from 2011 through 2028 would be increasing costs for operation and support, which would account for nearly all of the increase. In particular, CBO projects that there would be significant increases in the costs for military and civilian compensation, military medical care, and various operation and maintenance activities.
- That large contribution of operation and support costs to budget growth is a change from earlier projections, in which sharp growth in anticipated requirements to replace and modernize weapon systems (the so-called bow wave) was the primary factor underlying budget growth beyond the years covered by the FYDP. In the current projections, acquisition costs would steadily grow from $189 billion in 2011 to a peak of $218 billion in 2017 (an increase of about 15 percent) before decreasing and leveling off—albeit with year-to-year variations—at an average of about $200 billion per year thereafter.
Comparison With Projections Incorporating DoD's Estimates
CBO compared its projection (labeled in this study "the CBO projection") with DoD's estimate of the costs of the FYDP (for the 20112015 period) and with "an extension of the FYDP" (for the 20162028 period). The latter is a projection based on DoD's estimates of costs, where they are available for years beyond 2015 (for some weapon systems, for instance), and on costs consistent with the broader U.S. economy, where estimates from the department are not available (for pay and medical costs, for instance).
CBO's projection of the total cost of the FYDP through 2015—at $2,874 billion—is $41 billion (or about 1 percent) higher than the department's estimate. Much of the difference derives from an assumption that recent trends in the costs of weapon systems, medical care, and other support activities persist.
By DoD's estimates, executing its plans for 2011 through 2015 would require real (inflation-adjusted) increases in spending of about 1.5 percent annually (excluding emergency and supplemental funding for overseas contingency operations). Over the five-year period, that growth rate would result in costs that were $146 billion (or 5 percent) greater than the amount of DoD's budget if it was held at the 2010 level.
By 2015, the end of the FYDP period, annual costs under the CBO projection would be about $18 billion (or 3 percent) higher than the estimate in the FYDP; at the end of 10 years, in 2021, annual costs under the CBO projection would be $34 billion (or 6 percent) higher than the extension of the FYDP; and similarly, by 2028, the end of the projection period, annual costs under the CBO projection would be about $37 billion (or 6 percent) more than the estimate for the extension of the FYDP.
The degree to which the plans laid out by DoD are executed in the future will depend on the amount of funding that will be provided in an era of increasing pressure on the federal budget as a whole and on the success of ongoing efforts to curb cost growth in areas such as medical care and advanced weapon systems. Indeed, Secretary of Defense Gates announced on January 5, 2011, that DoD will trim its plans by a total of $78 billion (or about 3 percent) from 2012 to 2016 in recognition of the fiscal environment. Because many details of those revisions to plans have not yet been released, an analysis of the possible effects if they were adopted is not possible and is not included in this study.
Potential Costs of Veterans' Health Care
October 7, 2010
Potential Costs of Veterans’ Health Care
The Department of Veterans Affairs (VA) provides health care at little or no charge to more than 5 million veterans annually. Medical services are provided through the inpatient and outpatient facilities run by the Veterans Health Administration. Those services include routine health assessments, readjustment counseling, surgery, hospitalization, and nursing home care.
The Congressional Budget Office (CBO) projects that the future costs for VA to treat enrolled veterans will be substantially higher (in inflation-adjusted dollars) than recent appropriations for that purpose, partly because more veterans are likely to seek care in the VA system but mostly because health care costs per enrolled veteran are projected to increase faster than the overall price level. Under two scenarios that CBO examined, the total real resources (in 2010 dollars) necessary to provide health care services to all veterans who seek treatment at VA would range from $69 billion to $85 billion in 2020, representing cumulative increases of roughly 45 percent to 75 percent since 2010.
Although veterans from recent conflicts will represent a fast-growing share of enrollments in VA health care over the next decade, the share of VA’s resources devoted to the care of those veterans is projected to remain small through 2020, in part because they are younger and healthier than other veterans served by VA.
To provide health care services, VA depends on discretionary funding that the Congress provides in annual appropriation acts. Although eligibility for VA health care is based primarily on veterans’ military service, VA may, and does, adjust enrollment according to the resources available to it.
The Veterans’ Health Care Eligibility Reform Act of 1996 (Public Law 104-262, 110 Stat. 3177) mandated that VA deliver services to veterans who have service-connected conditions, to veterans unable to pay for necessary medical care, and to specific groups of veterans, such as former prisoners of war. The legislation permitted VA to offer services to all other veterans to the extent that resources and facilities were available; it also required VA to develop and implement an enrollment system to facilitate the management and delivery of health care services.
VA’s enrollment system includes eight categories that determine veterans’ eligibility and priority for access to health care. The highest priority is given to veterans who have service-connected disabilities (priority groups 1 through 3, or P1 through P3); the lowest priority is given to higher-income veterans who have no compensable service-connected disabilities, that is, no conditions that are disabling to the degree that VA provides compensation (P8).
The number of veterans treated by VA climbed rapidly following the enactment of the 1996 law, increasing from 2.9 million in fiscal year 1995 to 4.5 million in 2003. By 2003, VA no longer had the capacity to adequately serve all current enrollees, prompting the Secretary of Veterans Affairs to suspend further enrollment of some higher-income veterans (those in P8); VA eased that restriction in 2009 to allow some of those veterans to enroll. (Enrolled veterans typically have more than one source of health care available to them and choose to use VA for only a small portion of their health care, relying on other sources such as Medicare, employer-sponsored insurance, or the Department of Defense’s TRICARE program.)
A total of $44 billion was appropriated to VA for 2009 to provide medical services to veterans and to conduct medical research. That amount was increased by 8 percent, to $48 billion, for 2010. VA has requested an appropriation of $52 billion, an additional 8 percent, for 2011. The average annual increase was more than 9 percent from 2004 through 2009.
One group of veterans—those who have deployed or will deploy to overseas contingency operations (OCO), which include Operation Iraqi Freedom, Operation New Dawn, and Operation Enduring Freedom in Afghanistan and related activities—are of particular interest as policymakers and others attempt to determine the extent of the war-related medical conditions of those veterans and the resources required to treat them. Those veterans accounted for only about 6 percent of all patients in 2009 and 3 percent of the total dollars obligated for veterans’ health care in that year. Of the $43 billion obligated in 2009, VA estimates that it obligated $1.5 billion to care for OCO veterans. VA further estimates that those obligations will rise to $2.0 billion in 2010, $2.6 billion in 2011, and $3.3 billion in 2012.
Projecting Future Costs
This CBO report examines prospective demands on VA and projects the resources the agency would need to provide medical care to all enrolled veterans during the next 10 years, 2011–2020. (The report does not attempt to predict appropriations for VA.) Although the focus of this report is on the resources VA would need to treat all enrolled veterans, CBO has also separately projected the portion of those resources that would be needed to treat the veterans of the ongoing overseas contingency operations.
The recent increases in VA’s medical budget have reflected factors that will probably affect future resource requirements. First, as is true for all U.S. health care, VA’s medical expenditures per enrollee have grown more rapidly than has the overall price level. Second, the ongoing deployments to combat operations in Iraq and Afghanistan have increased the number of veterans seeking care from VA. Third, VA has been easing restrictions on enrolling higher-income veterans (those in P8), in part because of concerns expressed by policymakers and others who believe that restrictions on enrollment have caused some veterans to be denied benefits that they deserve.
To account for some possible policy changes and for uncertainty about the number of veterans who will be enrolled and the growth of medical expenditures per enrollee, CBO presents two scenarios to capture some of the range of possible outcomes. The scenarios differ in their assumptions about the number of enrollees in the VA health care system and the costs of providing medical services. CBO also assumes that there will be no major changes in VA’s policies (except for a possible change in eligibility criteria) and that the enrollment of non-OCO veterans (except for higher-income veterans) and the percentage of total health care that veterans receive from VA as opposed to other sources, referred to as their "reliance on VA," follow current trends.
Scenario 1. The first scenario was crafted using assumptions about enrollment and medical expenditures per enrollee that generate lower resource requirements than Scenario 2. The assumptions about factors affecting enrollment include the following:
- VA’s eligibility, cost-sharing, and other policies are those in effect at the beginning of 2010. Those policies include the easing of enrollment restrictions that began in 2009 for veterans in priority group 8 who have no compensable service-connected disabilities and whose income is 10 percent or less above VA’s income thresholds.
- The number of troops deployed to overseas contingency operations, which currently include the military operations in Iraq and Afghanistan and related activities, drops to 30,000 by 2013 and remains at that number throughout the decade.
- VA’s medical expenditures per enrollee for each priority group grow in nominal terms at slightly more than 5 percent per year, about the same rate as that anticipated in the general population over the decade.
Scenario 2. CBO crafted the second scenario to illustrate potential policy changes and other outcomes that may result in higher resource needs for VA’s health care services. The assumptions for that scenario are as follows:
- VA changes its eligibility rules to allow veterans who have no compensable service-connected disabilities and whose income is 30 percent or less above VA’s income thresholds to enroll. Other than that change, all policies relating to eligibility, cost sharing, and other factors are those in effect at the beginning of 2010.
- The number of troops deployed to overseas contingency operations declines more slowly than in Scenario 1, dropping to 60,000 by 2015 and remaining at that number through the rest of the decade.
- VA’s medical expenditures per enrollee for each priority group grow initially at the rate VA assumed in preparing the Administration’s 2011 budget request that was transmitted in February 2010 and, in subsequent years, at an annual rate that is about 30 percent higher than that anticipated in the general population—a rate that exceeds the average rate experienced by VA from 2003 through 2007, before significant numbers of veterans from the ongoing conflicts had enrolled.
Potential Costs to Treat All VA Enrollees
Under Scenario 1, CBO estimates that total enrollment would grow from 8.0 million in 2009 to more than 8.8 million by 2016—an increase of about 10 percent—but would edge down to 8.7 million in 2020. The resources required to treat all enrolled veterans would be about $69 billion in 2020, nearly 45 percent higher than the $48 billion that has been provided for 2010.
Under Scenario 2, enrollment would be 620,000 higher in 2020 than in Scenario 1, with 340,000 new enrollees resulting from VA’s further relaxation of the restrictions on enrollment and 280,000 from the higher troop deployments. The resources required to treat all enrolled veterans would reach nearly $85 billion in 2020, or 22 percent more than under Scenario 1 and about 75 percent more than the amount provided for 2010.
What factors explain the difference of roughly $15 billion in the potential costs of the two scenarios in 2020? The disparity between the growth rates of medical expenditures per enrollee in the two scenarios accounts for the lion’s share of the difference—$13 billion. Extending eligibility to additional higher-income veterans who have no compensable service-connected disabilities would add just $1 billion to the costs under Scenario 1; because those new enrollees are drawn from a group that historically has cost less to treat than most other veterans, the additional resources VA would require would be relatively small. The higher troop levels for contingency operations under Scenario 2 would also add $1 billion; the increase in the number of enrollees would be small—only about 3 percent—and they too would use fewer resources than the average enrollee.
The projections for both scenarios exceed the baseline projections that CBO constructs in accordance with the provisions set forth in the (now expired) Balanced Budget and Emergency Deficit Control Act of 1985. The baseline projections reflect the assumption that appropriations increase at the same rate as the employment cost index for the wage and salary component of VA’s budget and at the same rate as the gross domestic product price index for all other components.
In making its projections, CBO did not explicitly account for recently enacted health care legislation—in particular, the Patient Protection and Affordable Care Act (P.L. 111-148) and the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152). Although there is considerable uncertainty regarding how the new legislation will be implemented, CBO conducted a preliminary analysis of how it might affect VA’s resource requirements. That analysis indicates that the new laws may either increase or decrease the number of enrollees—and therefore VA’s resource requirements—but in either case probably by only a small amount. On the one hand, the costs of obtaining health insurance will be lower for some veterans in the latter part of the coming decade, leading some of them to seek less care from VA than they would have without the recent legislation. On the other hand, to avoid financial penalties that may be assessed on people who do not have a required level of health insurance, some veterans who would otherwise neither enroll in VA’s program nor obtain other insurance might choose to enroll with VA. Neither of those effects is likely to be large enough to significantly affect the projections in this report.
Potential Costs to Treat Veterans of Overseas Contingency Operations
As part of its projections for the resources needed to treat all enrolled veterans, CBO separately estimated the portion of resources that would be required to treat veterans of overseas contingency operations. CBO estimates that between the time hostilities began and the end of 2020, VA would enroll a total of 1.4 million or 1.7 million OCO veterans under Scenarios 1 and 2, respectively. The annual resources (in 2010 dollars) required to treat OCO veterans would increase from an estimated $2.0 billion in 2010 to $5.4 billion in 2020 under Scenario 1 and to $8.3 billion under Scenario 2. Because OCO veterans are typically younger and healthier than the average VA enrollee, they are less expensive to treat. Accordingly, the resources devoted to OCO veterans would be a small share of outlays, consuming 8 percent and 10 percent of VA’s resources for health care services in 2020 under Scenario 1 and Scenario 2, respectively. As the OCO veterans age, however, CBO expects that their costs will be similar to those of other older veterans who use VA’s health care services.