Congressional Budget Office

Approaches to Reducing Federal Spending on Military Health Care Congressional Budget Office

Publisher Marketing: The cost of providing that care has increased rapidly as a share of the defense budget over the past decade, outpacing growth in the economy, growth in per capita health care spending in the United States, and growth in funding for DoD's base budget (which finances the department's routine activities but has excluded funding for operations in Iraq and Afghanistan). Between 2000 and 2012, funding for military health care increased by 130 percent, over and above the effects of overall inflation in the economy. In 2000, funding for health care accounted for about 6 percent of DoD's base budget; by 2012, that share had reached nearly 10 percent. By 2028, health care would claim 11 percent of the cost of implementing DoD's plans, the Congressional Budget Office (CBO) estimates (see Summary Figure 1). The Budget Control Act of 2011 (as modified by subsequent legislation) capped funding for national defense between 2014 and 2021 at about 10 percent below CBO's projection of the cost of DoD's plans as of November 2013, using DoD's estimates of prices.1 The share of health care costs in future budgets will depend on how DoD adjusts its plans to comply with those caps. For example, if the growth in health care costs is unconstrained by new policies and cuts are made in funding for other defense activities (such as the development and procurement of weapon systems), then health care costs could account for an even larger percentage of the department's future spending.