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Possible higher spending paths for veterans' benefits

Contributor(s):
United States. Congressional Budget Office, issuing body.
Publication:
Washington, D.C. : Congressional Budget Office, December 2018
Language(s):
English
Format:
Text
Subject(s):
Budgets -- trends
Health Expenditures -- trends
Insurance Benefits -- economics
Insurance Benefits -- trends
Insurance, Disability -- economics
Insurance, Disability -- trends
Veterans -- statistics & numerical data
Veterans Health -- economics
Veterans Health -- trends
Forecasting
Veterans Disability Claims -- economics
Veterans Disability Claims -- trends
Vocational Education -- economics
Humans
United States
Genre(s):
Technical Report
Abstract:
The Department of Veterans Affairs (VA) administers a variety of programs for veterans and their families. VA spent $180 billion on those benefits in 2017, nearly triple what it spent in 2000 after removing the effects of inflation. (Spending was higher in 2018; however, the Congressional Budget Office's analysis focused on 2017, because it lacked information to provide a detailed breakdown of VA's 2018 spending.) The two largest programs, VA's disability compensation and medical care programs, accounted for most of that growth. CBO briefly examined VA's past growth in spending and projected VA's spending through 2028 under three scenarios. (All spending amounts discussed here are in 2018 dollars.) Past Growth in Spending. Between 1970 and 2017, VA's spending grew significantly faster than inflation; growth accelerated after 2000, averaging more than 6 percent annually above the rate of inflation through 2017. (1) Spending on disability compensation to veterans grew from $22 billion in 2000 to $73 billion in 2017, an average annual increase of 7.5 percent. (2) Medical care spending grew from $27 billion in 2000 to $69 billion in 2017, an average annual increase of 5.7 percent. (3)The number of beneficiaries and the spending per beneficiary grew substantially for both programs after 2000, despite an overall decline in the number of veterans. Possible Future Growth in Spending. The scenarios CBO analyzes in this report capture some possible trajectories for VA's future spending--a modified version of CBO's baseline projection and two scenarios that could result in more spending. (VA's spending could also be less than projected in the modified baseline; however, because of Congressional concern about budgetary risks, this report focuses on possible higher spending paths.) Although the growth in VA's spending would exceed the rate of inflation under all three scenarios, the growth in total spending would still be slower than VA has experienced in recent years--in part because the number of beneficiaries for the largest programs is projected to stay about the same or rise more slowly than in the past. (1) Scenario 1 matches CBO's baseline projection for VA, modified to incorporate additional appropriations provided in the 2018 VA MISSION Act, which was enacted after the baseline was completed. Spending would grow by nearly 20 percent from 2017 to 2028, from $180 billion to $215 billion--an annual increase 1.6 percent above the rate of inflation. (2) Scenario 2 is the same as Scenario 1 except that it assumes larger appropriations for medical care--extending VA's current policies for medical care spending and incorporating the projected spending required to implement the VA MISSION Act. It accounts for changes in enrollment, medical care spending, and other factors. Under Scenario 2, VA's spending could grow by about one-third, to $238 billion in 2028--an average annual rate of 2.6 percent. (3) Under Scenario 3, spending per beneficiary for the disability compensation and medical care programs would be greater than that in Scenario 2, growing at rates similar to those experienced over the past decade. In total, VA's spending would grow by just over 50 percent over the 2017-2028 period, to $272 billion in 2028. That increase represents the highest growth of the scenarios considered here, an average annual rate of 3.8 percent.
Copyright:
The National Library of Medicine believes this item to be in the public domain. (More information)
Extent:
1 online resource (1 PDF file (23 pages, 2 unnumbered pages))
Illustrations:
Illustrations
NLM Unique ID:
101738999 (See catalog record)
Contributor(s):
United States. Congressional Budget Office, issuing body.
Publication:
Washington, D.C. : Congressional Budget Office, December 2018
Language(s):
English
Format:
Text
Subject(s):
Budgets -- trends
Health Expenditures -- trends
Insurance Benefits -- economics
Insurance Benefits -- trends
Insurance, Disability -- economics
Insurance, Disability -- trends
Veterans -- statistics & numerical data
Veterans Health -- economics
Veterans Health -- trends
Forecasting
Veterans Disability Claims -- economics
Veterans Disability Claims -- trends
Vocational Education -- economics
Humans
United States
Genre(s):
Technical Report
Abstract:
The Department of Veterans Affairs (VA) administers a variety of programs for veterans and their families. VA spent $180 billion on those benefits in 2017, nearly triple what it spent in 2000 after removing the effects of inflation. (Spending was higher in 2018; however, the Congressional Budget Office's analysis focused on 2017, because it lacked information to provide a detailed breakdown of VA's 2018 spending.) The two largest programs, VA's disability compensation and medical care programs, accounted for most of that growth. CBO briefly examined VA's past growth in spending and projected VA's spending through 2028 under three scenarios. (All spending amounts discussed here are in 2018 dollars.) Past Growth in Spending. Between 1970 and 2017, VA's spending grew significantly faster than inflation; growth accelerated after 2000, averaging more than 6 percent annually above the rate of inflation through 2017. (1) Spending on disability compensation to veterans grew from $22 billion in 2000 to $73 billion in 2017, an average annual increase of 7.5 percent. (2) Medical care spending grew from $27 billion in 2000 to $69 billion in 2017, an average annual increase of 5.7 percent. (3)The number of beneficiaries and the spending per beneficiary grew substantially for both programs after 2000, despite an overall decline in the number of veterans. Possible Future Growth in Spending. The scenarios CBO analyzes in this report capture some possible trajectories for VA's future spending--a modified version of CBO's baseline projection and two scenarios that could result in more spending. (VA's spending could also be less than projected in the modified baseline; however, because of Congressional concern about budgetary risks, this report focuses on possible higher spending paths.) Although the growth in VA's spending would exceed the rate of inflation under all three scenarios, the growth in total spending would still be slower than VA has experienced in recent years--in part because the number of beneficiaries for the largest programs is projected to stay about the same or rise more slowly than in the past. (1) Scenario 1 matches CBO's baseline projection for VA, modified to incorporate additional appropriations provided in the 2018 VA MISSION Act, which was enacted after the baseline was completed. Spending would grow by nearly 20 percent from 2017 to 2028, from $180 billion to $215 billion--an annual increase 1.6 percent above the rate of inflation. (2) Scenario 2 is the same as Scenario 1 except that it assumes larger appropriations for medical care--extending VA's current policies for medical care spending and incorporating the projected spending required to implement the VA MISSION Act. It accounts for changes in enrollment, medical care spending, and other factors. Under Scenario 2, VA's spending could grow by about one-third, to $238 billion in 2028--an average annual rate of 2.6 percent. (3) Under Scenario 3, spending per beneficiary for the disability compensation and medical care programs would be greater than that in Scenario 2, growing at rates similar to those experienced over the past decade. In total, VA's spending would grow by just over 50 percent over the 2017-2028 period, to $272 billion in 2028. That increase represents the highest growth of the scenarios considered here, an average annual rate of 3.8 percent.
Copyright:
The National Library of Medicine believes this item to be in the public domain. (More information)
Extent:
1 online resource (1 PDF file (23 pages, 2 unnumbered pages))
Illustrations:
Illustrations
NLM Unique ID:
101738999 (See catalog record)