Possible Higher 

Spending Paths for 

Veterans’ Benefits

CONGRESS OF THE UNITED STATES

CONGRESSIONAL BUDGET OFFICE

December 2018
At a Glance

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. 

• 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. 

• Medical care spending grew from $27 billion in 2000 to $69 billion in 2017, an average annual 

increase of 5.7 percent. 

• 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.

• 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. 

• 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.

• 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.

www.cbo.gov/publication/54881
Contents

Summary 1

How Much Does VA Spend on Care for Veterans? 1

How Will the Recent Legislation Expanding Access to Medical Services Affect VA’s Spending? 2

How Might VA’s Spending Grow Over the Next Decade? 2

An Overview of VA’s Benefits 3

Disability Compensation 4

Medical Care 4

Education and Vocational Benefits 5

Long-Term Trends in VA’s Total Spending and Major Programs 5

Trends in Disability Compensation 6

Trends in Medical Care 8

Recent Trends in VA’s Spending 10

How Some Recent Legislative Changes Affect VA’s Medical Spending 10

Projected Spending for Veterans’ Benefits From 2018 to 2028 12

CBO’s Scenarios for VA’s Spending 12

Possible Spending Paths 16

Appendix: Possible Spending Paths for VA in Nominal Dollars 21

List of Tables and Figures 24

About This Document 25
Notes

Unless otherwise specified, all years referred to in this report are federal fiscal years, which 

run from October 1 to September 30 and are designated by the calendar year in which 

they end.

Unless otherwise specified, all spending amounts are reported in 2018 dollars. Amounts 

are adjusted to remove the effects of inflation using the gross domestic product price 

index, with values of that index for 2018 through 2028 projected by the Congressional 

Budget Office.

This report uses the term spending to refer to net outlays, which are outlays offset by 

payments such as deductibles or copayments. Net outlays may stem from obligations (a 

legal liability to disburse funds) incurred in a prior fiscal year or in the current year.

Unless otherwise specified, spending in a fiscal year is normalized to 12 monthly payments 

to veterans and their families. The number of payments in a fiscal year can vary depending 

on whether October 1 falls on a weekend, in which case certain payments scheduled for 

that date are made in September. 

Numbers in the text and tables may not add up to totals because of rounding.

On the cover: Government and military leaders and guests attend the National Veterans 

Day Observance at Arlington National Cemetery, Arlington, Virginia, on November 11, 

2018. Photo courtesy of the Department of Defense.
Possible Higher Spending Paths 

for Veterans’ Benefits

Summary

The Department of Veterans Affairs (VA) administers 

programs to aid former members of the armed forces 

and their families. By far the largest share of its budget 

is spent on two programs, one that pays compensation 

to veterans who have service-connected disabilities and 

one that provides medical care to veterans. VA’s spending 

(adjusted to remove the effects of inflation) has grown 

rapidly—from $64 billion, or 2.6 percent of all federal 

spending, in 2000 to $180 billion, or 4.4 percent of 

spending, in 2017.1 (The Congressional Budget Office 

estimates that spending was $187 billion in 2018; however, CBO’s analysis focused on 2017, because it lacked 

information required to provide a detailed analysis of 

VA’s 2018 spending.) That large increase has prompted 

concerns about the long-run affordability of VA benefits, 

particularly if their cost continues to increase at the same 

rate as in recent years.

To help policymakers assess the risks associated with 

increased costs, CBO has projected VA’s spending 

through 2028 under three different scenarios—a version 

of CBO’s baseline (modified to reflect the effects on 

mandatory spending of recent legislation) and two alternative scenarios involving more rapid growth.2

 CBO’s 

baseline budget projections are based on an assumption that current laws will generally remain in place. 

Under the rules for constructing the baseline, CBO 

assumes that VA’s spending for disability compensation 

will increase as needed to comply with laws governing 

the program and that appropriations for VA’s medical 

1. Unless otherwise specified, spending in a fiscal year is normalized 

to 12 monthly payments to veterans and their families. The 

number of payments in a fiscal year can vary depending on 

whether October 1 falls on a weekend, in which case certain 

payments scheduled for that date are made in September. Such 

timing shifts occurred in 2016, 2017, and 2018.

2. Mandatory spending is generally governed by provisions of 

permanent law, whereas discretionary spending is controlled by 

annual appropriation acts.

care will increase at the rate of inflation in the general 

economy. In the other two scenarios, CBO relaxes the 

constraints governing the baseline. Instead, CBO extends 

VA’s current policies for medical care, thereby assuming 

increases in discretionary appropriations that are greater 

than the rate of inflation; and in one of the scenarios, 

projects growth in both per-beneficiary medical care and 

disability compensation on the basis of VA’s experience 

from 2008 to 2017. CBO also incorporates into those 

two scenarios the effects of recent legislation on discretionary spending.

In the modified baseline, VA’s spending increases by 

nearly 20 percent (in 2018 dollars) from 2017 to 2028. 

Under the two higher-growth scenarios, VA’s spending is 

projected to increase by about 33 percent or by just over 

50 percent over that period. It could be higher or lower 

under other scenarios.

How Much Does VA Spend on Care for Veterans?

Of the $180 billion VA spent in 2017, the department 

paid disability compensation of $73 billion to 4.5 million veterans with service-connected disabilities. VA 

spent a little less, $69 billion, on medical care for more 

than 6 million veteran patients and medical research. 

Substantially less, $14 billion, was spent on the next 

largest set of programs, which provide education and 

vocational rehabilitation benefits for about 1 million 

veterans and their dependents, and the remainder paid 

for other programs and administrative costs.

Between 1970 and 2017, VA’s spending grew significantly faster than economywide inflation, even as the 

number of veterans waned. Growth was fastest in the 

years after 2000, averaging more than 6 percent annually 

above the rate of inflation. As a result, VA’s spending 

nearly tripled between 2000 and 2017.
2 Possible Higher Spending Paths for Veterans’ Benefits December 2018

How Will the Recent Legislation Expanding Access to 

Medical Services Affect VA’s Spending?

In June 2018, lawmakers enacted the VA MISSION Act, 

which among other things increases veterans’ access to 

VA’s medical services and expands support to veterans’ 

families. The law will affect discretionary and mandatory 

spending. CBO estimates that implementing the law 

will cost $46.5 billion (or $43.1 billion in 2018 dollars) 

through 2023 in discretionary spending, assuming that 

the Congress appropriates the necessary amounts each 

year. One provision expands veterans’ access to medical 

care at non-VA medical providers and facilities. That 

new community care program will cost $21.4 billion 

($19.9 billion in 2018 dollars) in discretionary funding 

over the next five years, CBO estimates.

The law also provided $5.2 billion in mandatory funding 

for the Veterans Choice Program, a separate community 

care program enacted in 2014 and set to expire after all 

of its funds have been used. (CBO’s cost estimate for the 

VA MISSION Act, H.R. 5674, which was enacted as 

S. 2372, provides details about the law’s provisions and 

projected spending required to implement them.)

How Might VA’s Spending Grow Over the Next Decade?

The scenarios CBO analyzes in this report capture some 

possible trajectories for VA’s future spending—CBO’s 

modified baseline and two alternative scenarios involving 

more rapid growth. 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 developments that could result in higher 

spending paths.

Although the growth in VA’s total 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.

Scenario 1. The first scenario is CBO’s baseline projection, which the agency constructs using rules specified 

in law, modified to incorporate the mandatory funding 

provided in the VA MISSION Act. For discretionary 

programs—such as those for most of VA’s medical 

spending—the baseline projects that future appropriations will equal the most recent appropriation, increasing 

only at the rate of inflation in the general economy. For 

mandatory spending—which includes disability compensation—CBO’s baseline projects that funding will 

be adequate to make all payments required by current 

laws. Therefore, to estimate mandatory spending, CBO 

uses detailed information on the eligibility and benefits established by those laws, the projected size of the 

veteran population, and other factors. For this scenario, 

CBO modified its most recently published baseline 

(from April 2018) to incorporate the mandatory funding 

for 2018 that was provided in the MISSION Act but did 

not incorporate its estimates of the discretionary costs of 

the law because the Congress did not provide any discretionary appropriations in the law.

Under Scenario 1, VA’s total spending would grow by 

19 percent, from $180 billion in 2017 to $215 billion 

in 2028 (in 2018 dollars; see Figure 1 and Table 1). The 

estimated average annual rate of growth of 1.6 percent 

over the 2017–2028 period would be substantially slower 

than the 5.5 percent rate that VA experienced between 

2010 and 2017.

Scenario 2. The baseline’s assumption that medical care 

appropriations would not grow faster than inflation 

does not accord with historical experience, suggesting 

a second scenario. Scenario 2 follows Scenario 1 except 

that VA’s medical spending rises on the basis of current policies governing its programs and services (such 

as eligibility for care). To that end, CBO uses detailed 

enrollment information, the projected per-capita growth 

in medical costs in the general economy, and other data 

to project the costs of providing medical care to veterans. 

Scenario 2 also incorporates the discretionary spending 

that CBO projects will be needed under the VA Mission 

Act from 2019 to 2023, as provided in CBO’s cost 

estimate for that legislation, and extends those estimates 

through 2028.

Under Scenario 2, VA’s spending would grow by about 

one-third, from $180 billion in 2017 to $238 billion in 

2028, an average annual increase of 2.6 percent above 

the rate of inflation. That rate is roughly 60 percent 

higher than that for Scenario 1 but a little less than half 

the rate of growth that VA experienced between 2010 

and 2017.

Scenario 3. Because policies for the disability compensation and medical care programs have not remained constant over the past several years, CBO considered a third 

scenario. Under Scenario 3, spending per beneficiary for 
December 2018 Possible Higher Spending Paths for Veterans’ Benefits 3

disability compensation and medical care would grow at 

rates that reflect VA’s experience over the past 10 years: 

growth that incorporates, in part, VA’s spending arising from government actions, changes in the economy, 

and world events. In effect, Scenario 3 reflects a path in 

which lawmakers, VA, or the courts take new actions—

or changes occur in the health insurance market or the 

economy—that boost VA’s spending and cause it to rise 

at the same rate as has occurred over the past 10 years. 

Any of those changes could occur in combination with 

others. For disability compensation, that historical rate 

of growth in spending per beneficiary is applied to each 

year of the projection period. For medical care, Scenario 

3 is the same as Scenario 2 while the MISSION Act is 

being implemented (over the 2019–2023 period); for 

years after 2023, CBO applied the historical rate of 

increase in spending per beneficiary.

Under Scenario 3, spending would grow by just over 

50 percent, from $180 billion in 2017 to $272 billion 

by 2028 (in 2018 dollars). That increase would represent 

an average annual rate of growth of 3.8 percent, which 

is nearly 2.5 times the average annual rate of growth in 

Scenario 1—yet it is about 30 percent lower than the 

annual growth that VA experienced from 2010 to 2017.

An Overview of VA’s Benefits

This report focuses on VA’s disability compensation and 

medical care programs, but VA also provides a variety 

of other benefits to aid veterans and their families.3

Among them, the department offers education and 

vocational rehabilitation assistance; provides pensions to 

low-income veterans and benefits for surviving spouses 

and dependent children; provides life insurance; guarantees home loans to veterans; and manages veterans’ 

3. Basic eligibility for VA’s benefits varies by program. Most 

programs set minimum active-duty requirements (such as length 

of active duty service and the nature of service). For example, 

to be eligible for VA medical care, veterans generally must have 

served 24 continuous months or the full period for which they 

were called to active duty, and left the military in any manner 

other than a dishonorable discharge. However, in addition to the 

basic eligibility rules, VA may also consider other factors, such 

as current income and time since discharge from the military, in 

providing specific benefits to veterans and their families. 

Figure 1.

Some Possible Higher Spending Paths for VA Through 2028

Billions of 2018 Dollars

Scenario 1: Modified Baseline Projection

Scenario 2: Extend Current Policies

Scenario 3: Extend Past Growth

Actual Projected

0

50

100

150

200

250

300

350

2010 2012 2014 2016 2018 2020 2022 2024 2026 2028

Source: Congressional Budget Office.

Spending reflects net outlays and is adjusted for the number of monthly benefit payments (which can vary from 11 to 13) in a fiscal year. Because 11 

payments were made in 2018, actual outlays for that year were about $8 billion less than shown above. 

CBO’s modified baseline budget projection is based on the April 2018 baseline, adjusted to include appropriated spending for the VA MISSION Act of 

2018. The baseline’s starting point includes advance appropriations for 2019 for VA’s discretionary medical care accounts and 2018 appropriations for 

VA’s other discretionary accounts.

VA = Department of Veterans Affairs.
4 Possible Higher Spending Paths for Veterans’ Benefits December 2018

cemeteries. (The Department of Defense offers additional benefits, primarily to veterans who retired from 

military service or left service because of a qualifying 

medical disability.)

Disability Compensation

Disability compensation, one of VA’s largest programs, 

provides payments to veterans with medical conditions 

or injuries that were incurred or aggravated during 

active-duty military service (service-connected disabilities). The conditions of veterans who receive such 

compensation vary widely, from tinnitus (ringing in the 

ears) to post-traumatic stress disorder, hypertension, or 

lost limbs. The amount of the base payment is linked 

to the composite disability rating that VA assigns the 

veteran. That rating is expressed from zero to 100 percent in increments of 10.4

 The rating for any individual 

condition is linked to the clinical severity of that veteran’s condition; higher composite ratings generally reflect 

a greater number of disabilities or more severe disabilities 

4. The composite rating is not created by adding up the disability 

ratings for each physical or mental condition that VA determines 

is service-connected but rather is a nonlinear combination of 

ratings.

and are compensated at higher rates.5 In calendar year 

2018, base payments ranged from about $135 per month 

for a 10 percent rating to about $2,975 per month for 

a 100 percent rating. Some veterans receive supplemental benefits in addition to the base payment. Unlike 

some federal and private-sector disability programs, the 

employment status, earnings, ability to work, and age of 

the veteran are not factored into the disability rating and 

subsequent base payment. Payments usually continue for 

the duration of the veteran’s life. 

Medical Care

Medical care, the other major component of VA’s 

services, includes hospital care, outpatient primary and 

specialty care, counseling services, rehabilitation and 

prosthetic care, diagnostic tests, prescriptions, and assistive devices such as prescription glasses, hearing aids and 

5. A rating of zero (not generally compensated) may be assigned for 

a condition that is not considered disabling, such as a small scar 

or minor limitation in the motion of a thumb. Impairments rated 

at 60 percent are considered significant; a rating of 100 percent 

is assigned to conditions that VA considers completely disabling, 

such as multiple amputations or chronic congestive heart 

failure. The same medical condition may be rated differently 

depending on its severity. For example, diabetes may be rated 

from 10 percent (controlled by diet) to 100 percent (multiple 

hospitalizations and other complications).

Table 1.

VA’s Spending in 2028 Under Alternative Scenarios

Billions of 2018 Dollars

Scenario 1: 

Modified Baseline Projection

Scenario 2: 

Extend Current Policies

Scenario 3: 

Extend Past Growth

Disability Compensation 92 92 122

Medical Care 78 102 105

Education and Vocational Programsa 17 17 17

Other Spending 28 28 28

Total VA Spending 215 238 272

Memorandum:

Percentage Change, 2017–2028 19 33 51

Source: Congressional Budget Office.

Spending reflects net outlays and is adjusted for the number of monthly benefit payments (which can vary from 11 to 13) in a fiscal year. Because 11 

payments were made in 2018, actual outlays for that year were about $8 billion less than shown above. 

CBO’s modified baseline budget projection is based on the April 2018 baseline, adjusted to include appropriated spending for the VA MISSION Act of 

2018. The baseline’s starting point includes advance appropriations for 2019 for VA’s discretionary medical care accounts and 2018 appropriations for 

VA’s other discretionary accounts.

VA = Department of Veterans Affairs.

a. Scenarios 2 and 3 incorporate the baseline projection for spending on education and other programs.
December 2018 Possible Higher Spending Paths for Veterans’ Benefits 5

supplies, and mobility assistance. Most of those services 

or products are delivered at VA’s facilities at little or no 

cost to the veterans. VA operates a network of about 

170 medical centers as well as more than 1,000 outpatient clinics, rehabilitation facilities, and nursing homes. 

To facilitate access to medical care, some veterans receive 

reimbursement for travel to VA facilities; others receive 

care from private medical professionals in their communities that is paid for by VA. (The MISSION Act is 

expected to increase the amount of such care.) Beyond 

medical services, VA’s medical care funding supports services and stipends for veterans’ caregivers and initiatives 

such as efforts to reduce homelessness among veterans.

Most veterans are eligible for VA’s medical care but must 

enroll to receive treatment. Veterans are assigned to one 

of eight priority groups based on their service-connected 

disabilities, income, combat status, and other factors 

when they apply.6 VA determines how many priority 

groups it can serve with the funding approved by the 

Congress. Veterans in the lowest-priority groups would 

be the first to be denied service. Currently, new enrollment in priority group 8, which includes higher-income 

veterans without compensable service-connected disabilities, is restricted, and as a result some veterans 

who would be assigned to that group are not eligible to 

enroll. Although most veterans are neither disabled nor 

lower-income (as determined by VA), roughly two-thirds 

of VA’s enrollees are assigned to priority groups that 

include service-connected disabled veterans (priority 

groups 1 through 3) or lower-income veterans (priority 

group 5).

Education and Vocational Benefits

VA also offers a number of education and vocational 

rehabilitation or training benefits to veterans. Those 

benefits are often referred to as readjustment benefits 

because they are intended to ease the transition from 

military to civilian employment. Education is the 

6. The highest priority groups, priority groups 1 to 3, primarily 

include veterans who have service-connected disabilities. Priority 

group 4 consists of veterans who receive aid and attendance 

benefits, are housebound, or are catastrophically disabled. 

Priority group 5 contains lower-income veterans. Priority group 

6 includes special populations of veterans, including most Gulf 

War II veterans when they first enroll. The lowest priority groups, 

7 and 8, include higher-income veterans without compensable 

service-connected disabilities. For a fuller description of the 

enrollment groups and criteria, see Department of Veterans 

Affairs, “VA Health Care Enrollment and Eligibility” (Accessed 

April 2, 2018), https://go.usa.gov/xPktT.

largest readjustment benefit. Today, most veterans who 

use education benefits do so through the Post-9/11 GI 

Bill, which went into effect August 1, 2009. The Post9/11 GI Bill provides education and related benefits to 

veterans who served on or after September 11, 2001, as 

well as to certain service members and qualifying spouses 

and dependents. Generally, to be eligible for full benefits, an individual must have served on active duty for 

three years; veterans may be eligible for partial benefits 

sooner. VA pays tuition and fees for up to four years at 

public colleges and universities at the in-state rate, or 

up to about $23,000 in the 2017–2018 academic year 

for a private school. For students enrolled more than 

half time, a monthly housing allowance may also be 

provided. (Veterans also use other education programs, 

including the usually less-generous Montgomery GI Bill; 

their eligibility for a specific program depends in part on 

the date and length of their previous active-duty service.) 

VA also offers job counseling, training, and adaptive 

aids or grants to certain veterans with service-connected 

disabilities.

Long-Term Trends in VA’s Total Spending 

and Major Programs

Between 1970 and 2017, VA’s total spending grew significantly faster than the rate of inflation (see Figure 2). 

VA spent about $180 billion, or more than 4 percent 

of total federal outlays, in 2017. That is more than four 

times as much as the $45 billion VA spent in 1970. 

(All amounts are in 2018 dollars.) Spending increased 

by about 40 percent, to $64 billion, in 2000 and then 

accelerated—nearly tripling between 2000 and 2017. 

Over that period, annual increases averaged more than 

6 percent above the rate of inflation. The growth of 

VA spending has slowed somewhat since 2010 but 

remains substantially higher than inflation in the general 

economy.

The increase in VA’s spending is particularly noteworthy 

because the number of veterans, which grew from about 

28 million in 1970 to 30 million in 1980, has declined 

in the decades since then to about 21 million in 2017. In 

short, VA is spending more to provide benefits for each 

veteran. Moreover, that growth has accelerated in recent 

decades. The agency’s total spending per veteran (in 

2018 dollars) rose from about $1,600 in 1970 to about 

$2,400 in 2000, an increase of about 50 percent over 

30 years. That figure tripled over the following 17 years, 

reaching about $8,800 in 2017. The higher cost of those 

veterans’ benefits can be partly explained by the fact that 
6 Possible Higher Spending Paths for Veterans’ Benefits December 2018

veterans, on average, are growing older—and health 

generally deteriorates as people age. The average age of 

veterans increased from 44 in 1970 to 60 in 2017 as the 

veterans of previous major wars aged—most Vietnam 

veterans are now older than 65—and the size of the 

military forces declined.

Because the disability compensation and medical care 

programs comprise the bulk of VA’s budget, growth in 

those programs has had the largest effects on the agency’s 

spending. Since 1970, those programs have experienced 

considerable growth, which has accelerated over the past 

two decades (see Figure 3). The costs per beneficiary 

and the number of beneficiaries have increased substantially for both programs despite the shrinking pool of 

veterans.7

Trends in Disability Compensation

From 2000 through 2017, total payments to veterans 

for service-connected disabilities more than tripled. 

Measured in 2018 dollars, spending increased from 

$22 billion in 2000 to $73 billion in 2017 (see Table 2).8

7. For the disability compensation program, beneficiary refers to 

a veteran who receives payments for VA-determined serviceconnected disabilities; for the medical care program, beneficiary 

refers to a veteran who is enrolled in the program, whether or not 

he or she receives care in a given year.

8. In this report, spending on service-connected disabilities includes 

recurring and nonrecurring payments from VA to veterans for 

Number of Beneficiaries. In 2017, some 4.5 million veterans received disability compensation, about twice the 

number of beneficiaries in 2000. That rise was caused by 

annual increases in the number of new veterans receiving 

compensation. In 2000, new recipients totaled 85,000. 

The figure peaked at 315,000 in 2015 and has since 

receded slightly to 295,000 in 2017. The share of veterans who receive disability payments grew from 9 percent 

of the veteran population in 2000 to 22 percent in 2017.

The increase in disability recipients is concentrated among veterans who left military service after 

September 11, 2001 (often referred to as veterans of the 

Gulf War II era). Of the 4 million Gulf War II veterans, 

CBO estimates that roughly 1.5 million received disability payments in 2017—about 35 percent of that group’s 

total population, which is a much higher rate of receipt 

than that observed in previous eras. Combat veterans 

are fueling that rise, but non-combat veterans also have 

higher rates of service-connected disability than were 

seen in previous generations.

those disabilities. It excludes administrative costs and spending 

on information technology systems (IT). In 2017, general 

operating expenses for the Veterans Benefits Administration 

(VBA), which primarily administers VA’s financial programs, 

were $3 billion; for all of VA, more than $4 billion was spent 

on IT. In 2005, IT spending was consolidated from individual 

program accounts, including medical care accounts. 

Figure 2.

Spending on Veterans’ Benefits Compared With the Number of Veterans, 1970 to 2017

0

5

10

15

20

25

30

35

0

40

80

120

160

200

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Billions of 2018 Dollars Millions

Total Spending (left scale)

Number of Veterans (right scale)

Source: Congressional Budget Office, using data from the Department of Veterans Affairs and the Current Population Survey.

Spending reflects net outlays. Data for 1970 to 1999 are not adjusted for the number of monthly payments in a fiscal year (which can vary from 11 to 13). 

Thereafter, data are adjusted for the timing of payments.

VA = Department of Veterans Affairs.
December 2018 Possible Higher Spending Paths for Veterans’ Benefits 7

Moreover, the number of veterans of previous eras who 

receive disability compensation has increased, particularly among Vietnam veterans. In 2017, they accounted 

for 1.4 million recipients—an additional 650,000 people, or 90 percent increase, since 2000. About 20 percent 

of all Vietnam veterans received disability payments in 

2017, compared with about 10 percent in 2000.

The aging of the covered population and corresponding increase in their health needs are only some of the 

reasons the number of disability recipients has grown. 

An increase in combat-related medical conditions is 

another factor. However, policy changes since 2000 have 

probably also had a substantial impact on VA’s spending 

growth. Those policy changes include more outreach 

by VA to inform veterans of their postmilitary benefits; 

a streamlined application process for service members 

leaving the military that has probably resulted in more 

veterans receiving benefits sooner; and the designation 

of several medical conditions, primarily certain health 

problems related to the use of Agent Orange defoliant, 

as presumptive for certain Vietnam veterans (that is, VA 

presumes those conditions were caused by veterans’ military service, so veterans with any of the conditions need 

not prove the condition is attributable to their service).

Spending per Beneficiary. Not only has the number 

of veterans receiving disability compensation nearly 

Figure 3.

VA’s Spending on Major Programs Compared With the Number of Veterans, 1970 to 2017

0

5

10

15

20

25

30

35

0

25

50

75

100

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Billions of 2018 Dollars Millions

Medical Care

Disability Compensation

Education and Vocational 

Programs

Number of Veterans (right scale)

Source: Congressional Budget Office, using data from the Department of Veterans Affairs, Census Bureau, and Bureau of Labor Statistics.

Spending reflects net outlays. Data for 1970 to 1999 are not adjusted for the number of monthly payments in a fiscal year (which can vary from 11 to 

13). Thereafter, data are adjusted for the timing of payments.

Spending on disability compensation includes recurring and nonrecurring payments from VA to veterans for those disabilities. It excludes administrative 

costs and information technology (IT) spending. In 2017, VA’s Veterans Benefits Administration spent about $3 billion on general operating expenses; 

across all of VA, IT spending comprised more than $4 billion.

Spending on medical care includes outlays from discretionary medical care accounts (medical support and compliance, medical services, medical 

facilities, and medical community care) and the medical and prosthetic research account. That spending is offset by reimbursements to VA from third 

parties for medical care, which totaled about $3.5 billion in 2017. Also included are care for nonveterans, which cost VA about $2 billion in 2017 and 

outlays from mandatory funding provided in the VA Choice Act and in subsequent legislation that extended the Veterans’ Choice Program. Spending to 

build VA medical facilities is not included.

Spending on education and vocational programs includes payments to beneficiaries—veterans, their family members, and some active-duty service 

members. It includes offsets to those accounts from contributions made by current service members ($150 million in 2017), but not intragovernmental 

transfers, administrative costs, or IT spending associated with the programs.

Other spending (not shown) includes programs such as pensions, housing guarantees and life insurance, contributions from the Department of 

Defense, service members, and others for various benefit programs, and departmentwide expenses such as IT. In 2006, VA recategorized spending on 

IT from the medical care and other accounts into its own separate account.

VA = Department of Veterans Affairs.
8 Possible Higher Spending Paths for Veterans’ Benefits December 2018

doubled since 2000, but the average cost of disability 

compensation per beneficiary has also increased by 

about 75 percent after adjusting for inflation. That 

represents an average increase of 3.4 percent annually, 

from $9,400 in 2000 to $16,500 in 2017. (All costs 

are expressed in 2018 dollars and rates of growth are 

calculated after removing the effects of inflation.) That 

increase is partly attributable to the growing number 

of service-connected conditions per veteran (which 

climbed, on average, from 2.5 in 2000 to 5.1 in 2017) 

and the resulting rise in the average disability rating 

(from 33 percent in 2000 to 51 percent in 2017). 

Although both the average rating and the average benefit 

have increased for veterans of all eras, a disproportionate 

share is caused by the influx of Gulf War II veterans, 

particularly combat veterans. (In 2017, those combat 

veterans had an average of 7.6 disabilities and an average 

disability rating of 59 percent.) As a result, the average 

payment to Gulf War II veterans is higher than the average payments to Korean War and World War II veterans, 

and those Gulf War II payments are rising faster than the 

other payments as well. 

For veterans of all eras, spending per beneficiary grew 

for some of the same reasons that the number of beneficiaries increased: The population has aged and some 

policy changes have made it easier to both navigate 

the system and receive benefits. For instance, Vietnam 

veterans’ medical conditions probably worsened or new 

conditions developed as they entered their 50s and 

60s. Consequently, many of those veterans requested 

reevaluations of their disability rating. In 2017, VA 

increased the disability ratings of about 290,000 veterans 

(or 6.5 percent of compensated beneficiaries). 

Trends in Medical Care

From 2000 through 2017, VA’s net spending on 

medical care (measured in 2018 dollars) more than 

Table 2.

VA’s Spending per Recipient for Major Programs, 2000 to 2017

Average Annual Rate of Growth 

(Percent)

2000 2010 2017 2000–2010 2010–2017

Disability Compensation

Total spending (Billions of 2018 dollars) 22 43 73 7.2 7.8

Recipients (Millions) 2.3 3.1 4.5 3.2 5.1

Spending per beneficiary (2018 dollars) 9,400 13,800 16,500 3.9 2.6

Medical Care

Total spending (Billions of 2018 dollars) 27 50 69 6.4 4.7

Recipients (Millions) 5.1 8.2 9.1 4.8 1.6

Spending per beneficiary (2018 dollars) 5,300 6,200 7,600 1.5 3.1

Education and Vocational Programs

Total spending (Billions of 2018 dollars) 2 10 14 16.8 4.8

Recipients (Millions) 0.5 0.9 1.1 7.1 2.8

Spending per beneficiary (2018 dollars) 4,600 10,900 12,600 9.1 2.1

Memorandum:

Total VA Spending (Billions of 2018 dollars)a 64 124 180 6.9 5.5

Source: Congressional Budget Office. 

Spending reflects net outlays and is adjusted for the number of monthly benefit payments (which can vary from 11 to 13) in a fiscal year. Because 13 

payments were made in 2000, actual outlays for that year were about $3 billion more than shown above.

Spending for medical care includes outlays from mandatory funding provided in the VA Choice Act of 2014 and in subsequent legislation that extended 

the Veterans’ Choice Program.

VA = Department of Veterans Affairs.

a. Includes spending on other programs not listed here.
December 2018 Possible Higher Spending Paths for Veterans’ Benefits 9

doubled—rising from $27 billion to $69 billion (see 

Table 2).9 Net outlays for that care increased at an average annual rate of 6.4 percent between 2000 and 2010, 

after removing the effects of inflation. Since then, the 

pace of growth has slowed to an average of 4.7 percent 

annually. A continued rise in costs is a potential challenge for future federal budgets, particularly since current 

spending reflects only a fraction of the potential costs the 

agency could incur if all eligible veterans enrolled and 

sought all of their care from VA.

Number of Beneficiaries. In 1996, VA received statutory authority to offer medical care to all veterans to the 

extent that resources and facilities were available. VA also 

rapidly moved to increase outpatient services by adding 

outpatient facilities as well as new types of services. As 

a result, enrollment grew quickly. In 2000 (the year in 

which VA’s enrollment system became fully operational), 

enrollment stood at 5.1 million. It reached 7.0 million 

in 2003, an average annual rate of growth of 11 percent over that three-year period. However, VA lacked 

the funding to treat more patients at that point, so it 

restricted the ability of higher-income veterans to enroll 

in VA’s system. Enrollment grew at a slower pace thereafter, rising to 9.1 million by 2017. The share of veterans 

who enrolled in the VA system also grew sharply, from 

20 percent to 46 percent between 2000 and 2017. The 

number of enrolled veterans who sought treatment grew 

at a similar pace: 3.5 million veterans were treated in 

2000, 4.5 million in 2003, and 6.1 million in 2017. (In 

any year, the number of enrollees is larger than the number of patients: About one-third of enrollees do not seek 

treatment from VA in a given year.)

9. In this report, spending on medical care includes outlays from 

the four discretionary medical care accounts (medical support 

and compliance, medical services, medical facilities, and medical 

community care) and the medical and prosthetic research 

account. It also nets out payments that offset spending, such as 

reimbursements to VA from third parties for medical care, which 

totaled about $3.5 billion in 2017. Spending on nonveterans, 

which equaled about $2 billion in 2017, is also included. VA 

medical care spending also includes outlays from mandatory 

funding provided in the VA Choice Act, and from subsequent 

legislation that extended the Veterans’ Choice Program, for 

which spending equaled $6 billion in 2017. However, it excludes 

funding for the construction of VA medical facilities.

Between 2000 and 2017, enrollment grew in most of 

the VA’s priority groups.10 The number of veterans with 

service-connected disabilities (priority groups 1 to 3) 

more than doubled, from 1.8 million in 2000 to 4.4 million in 2017. The number of those rated 50 percent disabled or higher (priority group 1) tripled. The number of 

enrolled veterans with higher incomes (priority group 8) 

nearly doubled to about 1.7 million, partly because some 

new applicants from that group enrolled, primarily in 

the early 2000s, and partly because some eligible veterans 

from other priority groups were reassigned to group 8 

(for example, because their income increased). 

Gulf War II combat veterans enrolled at higher rates 

than veterans of other eras: About 1.6 million of those 

Gulf War II combat veterans signed up, more than half 

of that population. (More than 600,000 of those veterans are rated at least 50 percent disabled, thus contributing to the enrollment growth in priority group 1.) The 

higher enrollment of Gulf War II veterans is explained 

in part because VA expanded its outreach programs to 

service members leaving the military, and also because 

special eligibility was extended to those veterans. The 

aging of the Vietnam-era population also contributed to 

the rise in overall enrollment, because the health of those 

enrollees probably deteriorated when they entered their 

50s and 60s. Some of those veterans had been eligible 

but had not previously enrolled with VA. Others became 

newly eligible for VA medical care once they began 

receiving disability compensation, possibly because of 

VA’s declaration of new presumptive conditions associated with service in Vietnam.

Spending per Beneficiary. Since 2000, medical spending 

per enrollee has increased substantially, from $5,300 in 

2000 to $7,600 in 2017 (in 2018 dollars). Between 2000 

and 2010, average annual spending per enrollee grew by 

1.5 percent more than the rate of inflation. Thereafter, 

that difference doubled to 3.1 percent. However, the 

increase was uneven. Expenditures per enrollee fell 

briefly after 2000 (by about 15 percent through 2003), 

as healthier veterans enrolled and used more of the newly 

available outpatient services rather than inpatient care. 

After 2003, spending per enrollee began to rise again, in 

part because the mix of enrollees shifted to higher-cost 

priority groups. Rising costs for health care in the general 

10. Enrollment declined over the 2000–2017 period among just one 

group: veterans who were housebound or catastrophically disabled 

from non-service-connected conditions (priority group 4).
10 Possible Higher Spending Paths for Veterans’ Benefits December 2018

economy probably also affected VA’s medical spending because the agency is subject to many of the same 

pressures as the private sector, such as higher prices for 

supplies and increased compensation costs for medical 

practitioners.

Another factor that may have increased VA’s per-enrollee 

costs is a possible increase in the amount of care enrollees sought from VA as opposed to other sources of 

care—a ratio known as the rate of reliance. Taken as a 

group, enrollees rely on VA for about 35 percent of their 

medical care. (About 80 percent of enrollees have other 

medical care available to them.) The share that relies on 

VA is higher for veterans under age 65 and lower for 

older veterans who become eligible for Medicare. Some 

limited evidence suggests that the overall rate of reliance 

has increased over the past 10 years for both groups.

Although veterans in all priority groups have increased 

their enrollment in the VA system, spending per enrollee 

and spending growth per enrollee vary widely by priority 

group. In 2017, average annual expenditures per enrollee 

ranged from about $5,500 for the higher-income veterans (priority group 8) to $32,900 for veterans who were 

housebound or had catastrophic non-service-connected 

disabilities (priority group 4). Contrary to public perception, the average cost to care for Gulf War II combat 

veterans is relatively low—less than one-half the average 

amount spent per enrollee—and it has not been a major 

driver in spending growth. That may change, however, as 

those veterans age and their health declines.

Recent Trends in VA’s Spending 

Although the rate of VA’s spending growth has slowed 

somewhat in recent years, annual growth is still substantial. Federal spending (net outlays) in 2017 for VA 

totaled $180 billion in 2018 dollars, nearly 4 percent 

higher than the $173 billion spent in 2016 (see Table 3). 

CBO estimates that VA spent about $187 billion in 

2018, about 4 percent more than in 2017, although that 

amount is based on preliminary data and could change.11

11. Spending in 2016 and 2018 is normalized to 12 monthly 

payments for recipients of disability compensation and pensions 

and for beneficiaries of education programs to enable comparison 

across years. Because 13 payments were made in 2016, total 

net outlays for VA were nearly $8 billion higher than stated 

above. Fiscal year 2018 had only 11 payments; if they were not 

normalized, total net outlays for VA would be about $8 billion 

less than the adjusted spending cited in the text. 

Spending for disability compensation, VA’s biggest 

expense in 2017, was $73 billion, an increase of 6 percent from 2016. CBO estimates that net outlays for disability compensation totaled about $78 billion in 2018, 

based on preliminary data, about 6 percent higher than 

net outlays in 2017. 

Medical care, VA’s second biggest expense in 2017, 

accounted for $69 billion in net outlays, more than 

6 percent higher than in the previous year. Of that total, 

about $6 billion in discretionary spending was used to 

provide community care through its long-established 

programs and another $5 billion in mandatory spending went to a newer, temporary program, the Veterans 

Choice Program. (Those figures reflect net outlays; VA 

spending was offset in part by $3.5 billion in payments 

that it received for medical care from veterans and third 

parties.) CBO estimates that medical care accounted for 

$72 billion of VA’s spending in 2018. 

After disability compensation and medical care, VA’s 

third largest expenditures are for education and vocational programs. They accounted for $14 billion of VA’s 

spending in 2017, a decline of 4 percent compared with 

the amount in the previous year.12 The vast majority of 

that spending, $11 billion, goes for education benefits 

provided by the Post-9/11 GI Bill. VA spent less on those 

benefits in 2017, primarily because fewer people used the 

Post-9/11 GI Bill benefits. The remainder of VA’s spending—which includes survivor benefits, pensions, housing 

programs, life insurance, information technology (IT) 

systems and administrative costs for VBA—totaled about 

$24 billion, or 13 percent of the agency’s spending in 

2017.

How Some Recent Legislative Changes Affect 

VA’s Medical Spending

Since 2014, lawmakers have provided funding to expand 

veterans’ access to community care—medical care provided by medical practitioners outside of VA facilities 

but paid for by VA. Those changes have increased VA’s 

spending on medical care and will affect future spending.

12. In this report, spending on education and vocational programs 

includes VA’s payments to beneficiaries including veterans, 

their family members, and some active-duty service members. 

Spending is net of offsets such as contributions from service 

members ($150 million in 2017). However, it does not include 

intragovernmental transfers, nor does it include general operating 

costs and IT expenses associated with the program. (Spending has 

been normalized to 12 monthly payments for those programs.)
December 2018 Possible Higher Spending Paths for Veterans’ Benefits 11

The Veterans Access, Choice, and Accountability Act 

of 2014 provided mandatory funding of $5 billion 

to expand VA’s in-house capacity and an additional 

$10 billion to establish the Veterans Choice Program, a 

temporary program intended to improve veterans’ access 

to community care for three years or until the funds were 

expended.13 To be eligible for that program, veterans 

must have difficulty accessing care at VA facilities—

for example, either the veteran’s waiting time for an 

13. To provide medical care, VA relies primarily on discretionary 

funding—that is, funding the Congress provides through annual 

appropriation acts. However, funding for the Veterans Choice 

Program, which is provided through other legislation, is classified 

as mandatory. Mandatory spending is generally governed by 

statutory criteria and is not normally constrained by the annual 

appropriation process.

appointment or the travel distance to a VA facility does 

not meet VA’s standards. The Congress appropriated 

$2.1 billion for the Veterans Choice Program in August 

2017 and another $2.1 billion in December 2017. (All 

amounts in this section are expressed in nominal, or 

non-inflation-adjusted, dollars.)

In June 2018, the VA MISSION Act was signed into 

law, further expanding veterans’ access to community 

care. The MISSION Act requires VA to establish the 

Veterans Community Care Program (VCCP) and 

to provide community care in several situations: for 

instance, when VA facilities do not offer the medical care 

needed or when a veteran cannot get care in a manner 

that complies with VA’s standards for timely access to 

treatment. VCCP replaces a long-established program 

Table 3.

VA’s Spending for Major Programs, 2016 to 2018

Billions of 2018 Dollars

Annual Rate of Growth (Percent)

2016 2017 Estimated, 2018 2016–2017 2017–2018

Disability Compensation 69 73 78 6.0 6.1

Medical Carea

Medical care and research accounts 62 64 67 2.8 5.0

Veterans Choice Programb 3 5 4 87.8 -18.2

Total 65 69 72 6.3 3.3

Education and Vocational Programsc 14 14 13 -4.3 -2.4

Memorandum:

Total VA Spendingd 173 180 187 3.8 4.1

Source: Congressional Budget Office.

Spending reflects net outlays and is adjusted for the number of monthly benefit payments (which can vary from 11 to 13) in a fiscal year. Because 13 

payments were made in 2016, actual outlays were about $8 billion more than shown above; 11 payments were made in 2018, and actual outlays were 

about $8 billion less. 

VA = Department of Veterans Affairs.

a. Includes outlays from discretionary medical care accounts (medical support and compliance, medical services, medical facilities, and medical 

community care) and the medical and prosthetic research account. That spending is offset by reimbursements to VA from third parties for medical 

care, which totaled about $3.5 billion in 2017. Also included are care for nonveterans, which cost VA about $2 billion in 2017, and outlays from 

mandatory funding provided in the VA Choice Act and in subsequent legislation that extended the Veterans’ Choice Program. Spending to build VA 

medical facilities is not included.

b. Includes outlays for medical care from community providers as provided in the VA Choice Act of 2014 and subsequent legislation, including the VA 

MISSION Act of 2018.

c. Includes payments to beneficiaries—veterans, their family members, and some active-duty service members. Also includes offsets to those accounts 

from contributions made by current service members ($150 million in 2017), but not intragovernmental transfers, administrative costs, or information 

technology spending associated with the programs.

d. Includes spending on other programs not listed here.
12 Possible Higher Spending Paths for Veterans’ Benefits December 2018

that authorized community care, usually in limited 

circumstances, to some groups of enrolled veterans, such 

as those who have service-connected disabilities. The new 

law both broadens the criteria for offering community 

care and extends eligibility to all enrolled veterans who 

meet the broader criteria. CBO estimates that implementing the new community care program will cost VA 

$21.4 billion over the 2019–2023 period, assuming that 

the Congress appropriates the amounts necessary to fully 

implement the law.14 The law also provides $5.2 billion in mandatory funding to continue the temporary 

Veterans Choice program.

In addition to expanding access to community care, the 

MISSION Act expands a caregivers’ stipend program. 

Under the previous program, enacted in 2010, family 

members and others who provided care for Gulf War II 

veterans who were severely injured while they were on 

active duty could receive stipends, health care, and other 

assistance. Under the new law, the program, phased in 

over two stages, will be open to caregivers for all veterans. 

CBO estimates that spending associated with the expansion will total $2.5 billion in 2023, a fivefold increase 

over the previous program, which cost $0.5 billion in 

2017. (Several other provisions in the MISSION Act 

also affect veterans’ health care or other VA programs, 

but their costs are less significant.)15

Projected Spending for Veterans’ Benefits 

From 2018 to 2028

Spending on VA programs is affected by many factors 

that cannot be projected with certainty. CBO therefore 

examined three scenarios to illustrate some possible paths 

for VA’s projected spending over the next 10 years. The 

three scenarios capture some possible trajectories for VA’s 

future spending—CBO’s baseline projections (which 

14. For a more detailed description of the legislation and projected 

spending, see Congressional Budget Office, cost estimate 

for H.R. 5674, the VA Maintaining Internal Systems and 

Strengthening Integrated Outside Networks Act of 2018 (enacted 

as S. 2372), May 2018, www.cbo.gov/publication/53871. 

15. The law also allows VA to enter into Veterans Care Agreements 

with local health care providers, which are not subject to 

competition or other requirements that normally apply to federal 

contracts. CBO estimates that giving VA the legal authority to 

continue to provide some existing community care through those 

agreements would cost $15 billion over the 2019–2023 period. 

However, costs for such community care have been factored into 

VA’s budget and previous appropriations. Consequently, for the 

purpose of this analysis, they are not included as an incremental 

cost to the MISSION Act. 

have been modified to reflect the effects on mandatory 

spending of recent legislation) 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.) 

The scenarios focus on VA’s largest programs: disability 

compensation for veterans with service-connected disabilities and medical care. 

The first scenario, which is based on CBO’s baseline projection, generates the lowest projected outlays, because 

it is based on current appropriations and does not reflect 

VA’s recent history of rising costs. The other two scenarios would result in higher spending. For the second scenario, CBO again used its modified baseline projection 

for VA spending, with one exception: the cost of medical 

care. The assumption that medical care appropriations 

will grow at the rate of inflation, which is specified in 

the law governing CBO’s baseline projections, does not 

accord with historical experience. Hence, in Scenario 2, 

CBO instead projects how spending would need to grow 

to extend current law (including the recently enacted 

VA MISSION Act) and VA’s policies for medical care, 

and to reflect the projected rate of increase in spending 

on health care in the general economy. Because policies for both the disability compensation and medical care programs have changed over the years, CBO 

also constructed a third scenario. In Scenario 3, CBO 

projects both disability compensation and medical care 

differently than it does in the modified baseline. Using 

historical growth in spending as a guideline, it increases 

spending per beneficiary for disability compensation and 

medical care at rates similar to those experienced by VA 

in the past 10 years (see Table 4).

CBO’s Scenarios for VA’s Spending

CBO’s scenarios illustrate some possible paths for VA 

spending. Some of the factors underlying those scenarios 

are uncertain, however. They include the rate of inflation 

in the general economy and, for VA programs specifically, unexpected changes in the number of beneficiaries 

(for instance, because of increased disabilities resulting 

from deployments) and changes to VA’s policies and 

benefits. This report does not predict future appropriations but rather illustrates what VA’s spending would 

be if the Congress appropriated funding under various 

assumptions.
December 2018 Possible Higher Spending Paths for Veterans’ Benefits 13

Table 4.

Assumptions Used to Project VA’s Spending Paths Under Alternative Scenarios

 Scenario 1:

Modified Baseline Projection

Scenario 2:

Extend Current Policies 

Scenario 3:

Extend Past Growth

Beneficiaries

Disability 

Compensation

Eligibility and program parameters reflect 

current law

Same as Scenario 1 Same as Scenario 1

Medical Care Not modeled; baseline projections extend 

the 2019 level of spending, adjusted for 

inflation

Existing policies are incorporated 

through the projection period (2028)

Same as Scenario 2

Mandatory spending for the VA MISSION 

Act is incorporated

All projected spending for the 

VA MISSION Act is incorporated

Same as Scenario 2

Veterans Choice Program is not renewed 

once funds are expended

Same as Scenario 1 Same as Scenario 1

Education and 

Vocational Programs

Eligibility and program parameters reflect 

current law

Same as Scenario 1 Same as Scenario 1

Per Capita Growth in Spending

Disability 

Compensation

Eligibility and program parameters reflect 

current law; growth is about the same as 

expected for the consumer price index

Same as Scenario 1 Growth per beneficiary is about the 

same as VA experienced from 2008 

to 2017

Medical Care Not modeled; baseline projections extend 

the 2019 level of spending, adjusted for 

inflation

Rate of growth per enrollee in the 

medical care spending accounts is 

about the same as expected in the 

general economy

After 2023, rate of growth per 

enrollee is about the same as VA 

experienced from 2008 to 2017

Mandatory spending for the VA MISSION 

Act is incorporated

All projected spending for the 

VA MISSION Act is incorporated

Same as Scenario 2

Veterans Choice Program is not renewed 

once funds are expended

Same as Scenario 1 Same as Scenario 1

Education and 

Vocational Programs

Eligibility and program parameters reflect 

current law

Same as Scenario 1 Same as Scenario 1

Rate of growth for education and housing 

expenses is about the same as expected in 

the general economy

Same as Scenario 1 Same as Scenario 1

Source: Congressional Budget Office.

CBO’s modified baseline budget projection is based on the April 2018 baseline, adjusted to include appropriated spending for the VA MISSION Act of 

2018. The baseline’s starting point includes advance appropriations for 2019 for VA’s discretionary medical care accounts and 2018 appropriations for 

VA’s other discretionary accounts. 

VA = Department of Veterans Affairs.
14 Possible Higher Spending Paths for Veterans’ Benefits December 2018

Scenario 1: Modified Baseline Projection. This scenario 

is based on CBO’s April 2018 baseline budget projection, updated to include an additional $5.2 billion 

provided for the Veterans Choice Program as part of the 

MISSION Act. VA’s budget includes both mandatory 

funding (generally determined by eligibility rules, benefit 

formulas and other parameters that are set in law) and 

discretionary funding (which is controlled by annual 

appropriation acts). CBO’s baseline budget projection is 

prepared following rules specified in law for each type of 

funding, primarily the Balanced Budget and Emergency 

Deficit Control Act of 1985, and with guidance from the 

budget committees. In constructing its baseline, CBO 

generally assumes that existing laws and policies will 

remain unchanged.16

Mandatory Spending. Many of VA’s programs, including 

its disability compensation program and education and 

vocational rehabilitation benefits, are mandatory programs. To project spending for those programs in the 

baseline, CBO estimates the future veterans population, 

applies the programs’ eligibility parameters and estimates 

payment growth. For the disability compensation program, CBO projects its growth in Scenario 1 by estimating the number of beneficiaries over the projection 

period, incorporating actual caseload and estimated mortality rates from the most recent fiscal year. It projects 

the number of new beneficiaries over the next decade 

on the basis of the number of service members leaving 

the military, the estimated total number of veterans over 

the projection period, and the rate at which it is estimated veterans will apply for disability benefits. Finally, 

CBO estimates the average net payment per beneficiary, 

incorporating a cost-of-living increase as represented by 

the consumer price index (CPI). The projection builds 

in adjustments to account for changes that have been 

made in law or policy that would substantially affect the 

number of beneficiaries or average payments.

Discretionary Spending. Most of VA’s medical care programs are discretionary, which means that their funding 

is controlled by annual appropriation acts. In constructing its baseline for discretionary programs, following the 

rules specified in law, CBO assumes that the most recent 

16. CBO’s baseline projection methodology is described in its 

February 2018 report, How CBO Prepares Baseline Budget 

Projections. The baseline projection that was used to construct 

Scenario is summarized in Congressional Budget Office, An 

Analysis of the President’s 2019 Budget (May 2018), www.cbo.gov/

publication/53884.

year’s appropriation is continued in each subsequent 

year, with adjustments each year for projected economywide inflation.17 The inflation rate used in the baseline is 

a weighted average of the gross domestic product (GDP) 

price index and the employment cost index (ECI) for 

wages and salaries, with the weights reflecting the shares 

of personnel costs and other costs in that portion of 

the budget. For Scenario 1, CBO follows the rules for 

constructing baselines for discretionary programs and 

applies the inflation rate to VA’s total budget for medical 

care rather than estimating it per enrollee. The baseline 

does not reflect changes in the number of enrollees, the 

characteristics of those enrollees, or their use of services. 

Moreover, it does not reflect the projected growth in 

spending that is specific to the U.S. health care sector. 

It simply extrapolates the growth from the most recent 

appropriation using the general measure of inflation 

described above. The modified baseline projection for 

discretionary spending was not affected by the discretionary provisions of the MISSION Act because funding 

for those provisions had not been appropriated at the 

time the law was signed.

Scenario 2: Extend Current Medical Care Policies. For 

this scenario, CBO takes factors affecting VA medical 

spending that do not vary in the baseline and allows 

them to change. Unlike Scenario 1, this scenario also 

includes the anticipated discretionary spending required 

to implement the MISSION Act. Scenario 2 uses CBO’s 

modified baseline projection from Scenario 1 for all 

other VA programs.

In Scenario 2, CBO projects what spending would be 

if the Congress appropriated the funding needed to pay 

the estimated costs of medical care under VA’s current 

policies and to implement the MISSION Act. Other 

than the MISSION Act, Scenario 2 incorporates no 

other major changes in current policies, such as VA’s 

eligibility rules and cost-sharing, and anticipates that VA 

would continue to provide essentially the same package 

of services. 

The methodology CBO uses differs fundamentally from 

the baseline’s methodology for projecting discretionary 

medical accounts. In this scenario, CBO allows the mix 

17. The starting point for CBO’s April 2018 baseline budget 

projection of spending for medical care is VA’s advance 

appropriation for 2019 as enacted in 2018 for the discretionary 

medical community care, medical services, medical support and 

compliance, and medical facilities accounts. 
December 2018 Possible Higher Spending Paths for Veterans’ Benefits 15

of enrollees, the use of medical services per enrollee, and 

medical inflation to vary over the projection period. To 

project medical care spending (other than that required 

to implement the MISSION Act), CBO uses VA’s 

projections of the future number of enrollees in each priority group. (VA’s projections are based on assumptions 

similar to those that CBO used for this scenario.) Among 

other factors, the enrollment projections incorporate 

anticipated changes in the number and combat status 

of service members separating from military service and 

observed patterns in new enrollment.18 In this scenario, 

CBO uses the most recent values for the veterans’ rates of 

reliance on VA’s care and the relative costs of caring for 

enrollees in each priority group throughout the projection period.19 CBO estimates the future cost to the VA 

of providing that medical care per user, applying the 

anticipated growth in national health care spending per 

capita to the average cost of a user by priority group.20

In addition, Scenario 2 includes the effects of the 

MISSION Act on discretionary medical spending. From 

2019 to 2023, the scenario incorporates the projected 

spending required to implement the law, as reported in 

CBO’s cost estimate for the legislation, which estimated 

costs assuming a five-year implementation period that 

18. CBO relied on data on enrollment, reliance, and relative cost 

by priority group provided by VA from its Enrollee Health 

Care Projection Model (with some adjustments). For a general 

description of some elements of the model, see 2015 VA Enrollee 

Health Care Projection Model (August 19, 2015), Department 

of Veterans Affairs, and Government Accountability Office, 

Veterans’ Health Care: VA Uses a Projection Model to Develop Most 

of Its Health Care Budget Estimate to Inform the President’s Budget 

Request, GAO-11-205 (January 2011), www.gao.gov/products/

GAO-11-205. 

19. As the health care delivery and insurance markets evolve over the 

next 10 years, it seems likely that reliance will change; however, 

the direction or magnitude of any future change is uncertain. 

20. Using the data described above, CBO determined the number 

of full-time-equivalent users (a measure of veterans’ use of VA’s 

services) in each priority group for each year of the projection 

period. The annual cost for each such user was estimated from 

historical data by priority group. The costs per enrollee by priority 

group were inflated using increases in the rate of spending per 

capita in the general economy for each group as projected by 

the Centers for Medicare and Medicaid Services and adapted 

by CBO. Calculating full-time-equivalent users enables CBO 

to separately and easily adjust for future changes in reliance and 

total cost per user by priority group. For a fuller description of 

CBO’s methodology, see Congressional Budget Office, Potential 

Costs of Veterans’ Health Care (October 2010), www.cbo.gov/

publication/21773.

ends in 2023. After 2023, the scenario incorporates the 

assumption that the spending required to implement the 

MISSION Act’s community care provision grows at the 

same rate per enrollee as health care spending is anticipated to grow in the general economy. CBO projects 

that the expanded caregivers’ benefits would grow as a 

measure of wage and salary growth, as represented by the 

ECI. Scenario 2 also incorporates the assumption that 

the VA Choice Program will expire once the funds that 

have already been appropriated for it are expended.

Scenario 3: Extend the Past Rate of Growth. This 

scenario reflects a future in which VA’s per-recipient 

spending on disability compensation and medical care 

grows at the annual rates that VA has experienced over 

the past decade (2008 to 2017): 3.0 percent and 3.9 percent, respectively. (CBO uses the average growth rate 

over the past 10 years to reduce the effect of shorter-term 

variations in spending and to exclude the expenses associated with revamping VA’s medical care program in the 

early 2000s.) For disability compensation, the historical 

growth rate is applied to each year of the projection 

period. For medical spending, Scenario 3 is the same as 

Scenario 2 for the first five years of the projection period 

as the MISSION Act is implemented. This scenario 

incorporates no additional growth over that period as VA 

focuses its resources on implementing the new community care program (for instance, developing standards 

for timely access to care, contracting with networks of 

private providers, informing enrollees about their benefits, and overseeing the initial rollout). For years after 

2023, CBO applies the historical growth in spending per 

beneficiary. Finally, Scenario 3 uses the same number of 

beneficiaries as the previous scenario for both the disability compensation program and medical care.

Unlike CBO’s modified baseline scenario, Scenario 3 

does not incorporate the assumption that current law 

and policy will remain in effect. Instead, under Scenario 

3, legislative or economic changes or a combination of 

factors may lead to further growth. Specifically, the scenario illustrates how costs would grow if actions by the 

Congress and the President, VA, or the courts increased 

VA spending at the same rate as they have in recent 

years. For example, the VA Secretary or the Congress 

could establish new presumptive conditions or expand 

eligibility for medical care to higher-income veterans 

without service-connected disabilities. In addition to 

changes in veterans’ benefits, other factors that could 

affect spending are possible future deployments, changes 
16 Possible Higher Spending Paths for Veterans’ Benefits December 2018

in the economy, or changes in the medical insurance 

market. As in Scenario 2, spending for programs other 

than disability compensation and medical care follows 

CBO’s baseline projections.

Possible Spending Paths

Applying the baseline’s methods and price indexes would 

result in slower projected growth in total spending 

than in the other two scenarios. Under Scenario 1, VA’s 

costs would increase by nearly 20 percent from 2017 to 

2028.21 By contrast, VA’s costs would increase by about 

33 percent under Scenario 2 and by just over 50 percent 

under Scenario 3. 

Projected Spending Increase Under Scenario 1 

(Modified baseline projection). Adjusted for inflation, 

VA’s spending would grow from $180 billion in 2017 

to $215 billion in 2028 (see Table 5). Growth would 

average 1.6 percent annually from 2017 to 2028, substantially less than the 5.5 percent average annual growth 

that occurred between 2010 and 2017. 

Net outlays for disability compensation are projected to 

grow from $73 billion in 2017 to $92 billion in 2028, an 

average annual growth rate of 2.1 percent. That growth 

is primarily driven by new recipients (see Table 6). 

CBO estimates that the average number of recipients of 

disability compensation would grow by 24 percent, to 

5.5 million, by 2028. Although CBO anticipates that 

the number of new beneficiaries in each year would be 

higher than it was in the early 2000s, it will be lower 

than in recent years for at least two reasons: Fewer service 

members are being deployed to combat regions, and 

most service members who were deployed in support of 

the recent conflicts have left active-duty military service. 

(Combat veterans are more likely both to receive disability compensation and to be awarded higher disability 

ratings than non-combat veterans.)

By contrast, VA’s medical care spending shows less 

growth (from $69 billion to $78 billion from 2017 

through 2028) in part because of the baseline rules CBO 

followed to project discretionary accounts. Increases in 

spending for education and vocational programs (from 

21. To compare the scenarios, CBO applied the gross domestic 

product (GDP) price index to convert the projections to 2018 

dollars. Because CBO projects that wages and salaries will rise 

more rapidly than the GDP price index, the modified baseline 

projection (which incorporates projected increases in wages and 

salaries) increases in real terms through 2028.

$14 billion in 2017 to $17 billion in 2028) do not 

account for much of the total growth in VA’s spending over the projection period; however, the growth in 

those programs’ spending would exceed general inflation by 2.1 percent annually. The number of recipients 

is expected to flatten out but spending per recipient is 

anticipated to rise annually by 1.7 percent, driven by 

rates of inflation for housing and education that exceed 

general price increases in the economy.

Projected Spending Increase Under Scenario 2 (Extend 

current medical care policies). Adjusted for economywide inflation, spending under Scenario 2 would reach 

$238 billion by 2028, about one-third higher than the 

level in 2017—an annual growth rate of 2.6 percent. 

That growth rate is roughly 60 percent higher than under 

Scenario 1 but a little less than half as rapid as VA’s 

spending growth between 2010 and 2017.

In this scenario, more than half of the increase in VA’s 

spending over the projection period is attributable to rising costs for the medical care program. Spending for that 

program increases to $102 billion in 2028, an average 

annual growth rate from 2017 to 2028 of 3.5 percent.22

About 9 percent of that $102 billion would be for discretionary spending associated with the MISSION Act. 

Because CBO’s baseline projection is the basis for all but 

the medical care portion of this projection, spending on 

disability compensation and all other programs remains 

the same under this scenario as in Scenario 1.

Under Scenario 2, enrollment in VA’s medical care 

program would increase from 9.1 million in 2017 to 

9.4 million by 2022 and then drop back to 9.2 million 

by 2028, stemming in part from an anticipated decline 

in the number of combat veterans leaving the military. 

At the same time, however, a greater share of enrollees will be veterans with service-connected disabilities 

because the number of veterans receiving disability 

compensation is expected to continue increasing. The 

vast majority of disability compensation recipients 

enroll in VA’s medical care program. In 2018, roughly 

50 percent of enrolled veterans are estimated to have 

22. That growth does not include increases to build new VA facilities. 

CBO did not estimate such increases partly because there is 

substantial uncertainty about how VA might increase its physical 

presence. Rather than build new facilities, VA could choose to 

extend its community care programs, extend hours of operation 

at its facilities, or reduce the average length of appointments, 

among other options. 
December 2018 Possible Higher Spending Paths for Veterans’ Benefits 17

Table 5.

Spending by VA and for Major Programs in 2028 Under Alternative Scenarios, 

Compared With 2010 and 2017 Spending

Scenario 1: 

Modified Baseline Projection

Scenario 2: 

Extend Current Policies

Scenario 3: 

Extend Past Growth

All of VA 

Spending (Billions of 2018 dollars)

2010 124 124 124

2017 180 180 180

2028 215 238 272

Increase, 2017–2028 35 59 92

Average Annual Growth (Percent)

2010–2017 5.5 5.5 5.5

2017–2028 1.6 2.6 3.8

Disability Compensation 

Spending (Billions of 2018 dollars)

2010 43 43 43

2017 73 73 73

2028 92 92 122

Increase, 2017–2028 19 19 49

Average Annual Growth (Percent)

2010–2017 7.8 7.8 7.8

2017–2028 2.1 2.1 4.8

Medical Care

Spending (Billions of 2018 dollars)

2010 50 50 50

2017 69 69 69

2028 78 102 105

Increase, 2017–2028 9 32 35

Average Annual Growth (Percent)

2010–2017 4.7 4.7 4.7

2017–2028 1.1 3.5 3.8

Education and Vocational Programs 

Spending (Billions of 2018 dollars)

2010 10 10 10

2017 14 14 14

2028 17 17 17

Increase, 2017–2028 4 4 4

Average Annual Growth (Percent)

2010–2017 4.8 4.8 4.8

2017–2028 2.1 2.1 2.1

Source: Congressional Budget Office.

CBO’s modified baseline budget projection is based on the April 2018 baseline, adjusted to include appropriated spending for the VA MISSION Act of 

2018. The baseline’s starting point includes advance appropriations for 2019 for VA’s discretionary medical care accounts and 2018 appropriations for 

VA’s other discretionary accounts.

VA = Department of Veterans Affairs.
18 Possible Higher Spending Paths for Veterans’ Benefits December 2018

service-connected disabilities; that share is expected to 

increase to about 60 percent by 2028. Because veterans with service-connected disabilities also generally 

cost more to care for than other veterans, their share of 

VA’s medical spending (excluding the spending for the 

MISSION Act) would increase from about 60 percent to 

nearly 75 percent in 2028. 

Besides the spending associated with the VA MISSION 

Act, spending growth for medical care under this 

scenario is largely driven by the assumption that medical expenditures per enrollee grow at about the same 

rate as CBO projects that they would in the general 

population.23 Aging of the veteran population will probably not contribute substantially to the growth in 

23. CBO’s findings are broadly consistent with other research. 

See Projesh Ghosh, Sebastian Negrusa and John Warner, 

“Health Insurance, Health Conditions, and Veteran Health 

Care Utilization,” Defence and Peace Economics, vol. 29, no. 1 

(July 2017), pp. 24–43, https://doi.org/10.1080/

10242694.2017.1349311, in which the authors predict 

substantial increases in outpatient visits to the VA through 

the end of their projection period (2023). Also see Christine 

Eibner and others, Current and Projected Characteristics and 

Unique Health Care Needs of the Patient Population Served by 

the Department of Veterans Affairs (RAND Corporation, 2015), 

www.rand.org/pubs/research_reports/RR1165z1.html, which 

projects some increases in the number of patients treated by VA 

and a rise in the prevalence of several medical conditions among 

veterans through the end of RAND’s projection period (2024).

Table 6.

VA’s Spending per Recipient and by Major Program Under Alternative Scenarios 

Scenario 1: 

Modified Baseline 

Projection

Scenario 2: 

Extend Current Policies

Scenario 3: 

Extend Past Growth

Actual, 

2017 2028

Average 

Annual Rate 

of Growth, 

2017–2028 

(Percent) 2028

Average 

Annual Rate 

of Growth, 

2017–2028 

(Percent) 2028

Average 

Annual Rate 

of Growth, 

2017–2028 

(Percent)

Disability Compensation

Total spending (Billions of 2018 dollars) 73 92 2.1 92 1.9 122 4.8

Recipients (Millions) 4.5 5.5 2.0 5.5 1.7 5.5 2.0

Spending per recipient (2018 dollars) 16,500 16,700 0.1 16,700 0.1 22,200 2.7

Medical Care

Total spending (Billions of 2018 dollars) 69 78 1.1 102 3.5 105 3.8

Recipients (Millions) 9.1 n.a. n.a. 9.2 0.1 9.2 0.1

Spending per recipient (2018 dollars) 7,600 n.a. n.a. 11,000 3.4 11,400 3.7

Education and Vocational Programs

Total spending (Billions of 2018 dollars) 14 17 2.1 17 2.1 17 2.1

Recipients (Millions) 1.1 1.1 0.4 1.1 0.4 1.1 0.4

Spending per recipient (2018 dollars) 12,600 15,100 1.7 15,100 1.7 15,100 1.7

Memorandum:

Total VA Spending (Billions of 2018 dollars)a 180 215 1.6 238 2.6 272 3.8

Source: Congressional Budget Office.

CBO’s modified baseline budget projection is based on the April 2018 baseline, adjusted to include appropriated spending for the VA MISSION Act of 

2018. The baseline’s starting point includes advance appropriations for 2019 for VA’s discretionary medical care accounts and 2018 appropriations for 

VA’s other discretionary accounts.

VA = Department of Veterans Affairs; n.a. = not applicable (CBO’s baseline projection for medical care does not include estimates of the number of 

enrollees or spending per enrollee).

a. Includes spending on other programs not listed here.
December 2018 Possible Higher Spending Paths for Veterans’ Benefits 19

spending because most Vietnam veterans are now over 

65 and thus qualify for Medicare. (At that age, veterans’ 

reliance on VA drops, and the costs to VA per veteran 

decline until veterans begin using long-term medical services, such as nursing home care, in substantial 

numbers.) 

In 2028, the amount of medical care spending required 

in this scenario would be about $24 billion, or more 

than 30 percent, higher than the modified baseline 

projection. That difference in spending would be more 

than the amount required to serve priority groups 6, 7, 

and 8 in that year under this scenario. Consequently, if 

lawmakers held VA’s medical care funding to the amount 

in CBO’s modified baseline projection (that is, Scenario 

1), the projections under Scenario 2 indicate that the 

Secretary of Veterans Affairs would be required under 

current law to rescind enrollment for veterans in those 

priority groups so that VA could continue to provide 

care for the other groups. Even lower-income veterans 

(priority group 5) would face some limitation on enrollment or other restrictions in access by 2028 if VA were 

required to restrain its budgetary growth to the rate in 

CBO’s modified baseline projections. Priority group 8 

veterans, as the lowest in the statutory list, would be the 

first to be excluded from receiving services, potentially as 

early as 2021.

Projected Spending Under Scenario 3 (Extend the past 

rate of growth). Spending in this scenario would reach 

$272 billion by 2028, adjusted for inflation, a little more 

than 50 percent higher than in 2017—an annual average rate of growth of 3.8 percent (see Table 5 on page 

17). That rate is nearly 2.5 times greater than under 

Scenario 1 but about 30 percent lower than the growth 

in VA’s health care spending from 2010 to 2017.

In Scenario 3, the increase in spending on disability 

compensation dominates increases in other programs. 

Spending for that program would reach $122 billion by 

2028, an average annual increase of 4.8 percent. Unlike 

in the previous scenario, increases in the size of the disability payment per beneficiary would contribute more 

toward growth in that program than would increases in 

the number of recipients.

Spending for medical care would grow to $105 billion in 

2028, an annual average increase of 3.8 percent—slightly 

higher than in Scenario 2. The annual rate of growth 

per enrollee that is projected for 2017 to 2023 (the years 

over which the MISSION Act will be implemented) 

turns out to be similar to the annual rate of growth 

per enrollee over the 2008–2017 period (3.6 percent 

between 2017 and 2023 compared to 3.9 percent over 

that period). The rise in spending per enrollee would be 

the primary driver of the growth in medical spending. 

As in the previous scenario, if appropriations did not 

keep pace with the growth that CBO projects under this 

scenario (as in Scenario 1, for example), the Secretary of 

Veterans Affairs would have to rescind the enrollment of 

some veterans.

Appendix: Possible Spending Paths 

for VA in Nominal Dollars

The growth curves in Figure 1 (on page 3)

and spending growth shown in Table 5 (on 

page 17) are adjusted to remove the effects 

of inflation using the gross domestic product 

price index, with values of that index for 2018 through 

2028 projected by the Congressional Budget Office. 

In contrast, the growth curves and spending shown 

in Figure A-1 and Table A-1 are expressed in nominal 

dollars, meaning that they include the effects of inflation. 

In nominal terms, VA’s spending in the CBO modified 

baseline (Scenario 1) would total $265 billion in 2028, 

an increase of about 50 percent above the 2017 amount. 

Under Scenario 2, spending would grow to $294 billion 

by the end of the projection period (2028), about twothirds more the 2017 amount. Finally, under Scenario 3, 

spending would grow to $335 billion in 2028, about 90 

percent higher than the 2017 amount.
22 POSSIBLE HIGHER SPENDING PATHS FOR VETERANS’ BENEFITS December 2018

Figure A-1.

Some Possible Higher Spending Paths for VA Through 2028, in Nominal Dollars

Billions of Nominal Dollars

Actual Projected

0

50

100

150

200

250

300

350

2010 2012 2014 2016 2018 2020 2022 2024 2026 2028

Scenario 1: Modified Baseline Projection

Scenario 2: Extend Current Policies

Scenario 3: Extend Past Growth

Source: Congressional Budget Office.

Spending reflects net outlays and is adjusted for the number of monthly benefit payments (which can vary from 11 to 13) in a fiscal year. Because 11 

payments were made in 2018, actual outlays for that year were about $8 billion less than shown above. 

CBO’s modified baseline budget projection is based on the April 2018 baseline, adjusted to include appropriated spending for the VA MISSION Act of 

2018. The baseline’s starting point includes advance appropriations for 2019 for VA’s discretionary medical care accounts and 2018 appropriations for 

VA’s other discretionary accounts.

VA = Department of Veterans Affairs.
APPENDIX POSSIBLE HIGHER SPENDING PATHS FOR VETERANS’ BENEFITS 23

Table A-1.

Spending by VA and for Major Programs in 2028 Under Alternative Scenarios, 

Compared With 2010 and 2017 Spending (in Nominal Dollars)

Scenario 1: 

Modified Baseline Projection

Scenario 2: 

Extend Current Policies

Scenario 3: 

Extend Past Growth

All of VA

 Spending (Billions of nominal dollars)

2010 108 108 108

2017 177 177 177

2028 265 294 335

Increase, 2017–2028 88 109 150

Average Annual Growth (Percent)

2010–2017 7.2 7.2 7.2

2017–2028 3.8 4.7 6.0

Disability Compensation 

 Spending (Billions of nominal dollars)

2010 38 38 38

2017 72 72 72

2028 114 114 151

Increase, 2017–2028 42 42 79

Average Annual Growth (Percent)

2010–2017 9.6 9.6 9.6

2017–2028 4.2 4.2 7.0

Medical Care

Spending (Billions of nominal dollars)

2010 44 44 44

2017 68 68 68

2028 96 125 129

Increase, 2017–2028 28 57 61

Average Annual Growth (Percent)

2010–2017 6.4 6.4 6.4

2017–2028 3.2 5.7 6.0

Education and Vocational Programs 

Spending (Billions of nominal dollars)

2010 9 9 9

2017 13 13 13

2028 21 21 21

Increase, 2017–2028 8 8 8

Average Annual Growth (Percent)

2010–2017 6.6 6.6 6.6

2017–2028 4.3 4.3 4.3

Source: Congressional Budget Office.

CBO’s modified baseline budget projection is based on the April 2018 baseline, adjusted to include appropriated spending for the VA MISSION Act of 

2018. The baseline’s starting point includes advance appropriations for 2019 for VA’s discretionary medical care accounts and 2018 appropriations for 

VA’s other discretionary accounts.

VA = Department of Veterans Affairs.
Tables

1. VA’s Spending in 2028 Under Alternative Scenarios 4

2. VA’s Spending per Recipient for Major Programs, 2000 to 2017 8

3. VA’s Spending for Major Programs, 2016 to 2018 11

4. Assumptions Used to Project VA’s Spending Paths Under Alternative Scenarios 13

5. Spending by VA and for Major Programs in 2028 Under Alternative 

Scenarios, Compared With 2010 and 2017 Spending 17

6. VA’s Spending per Recipient and by Major Program Under Alternative Scenarios 18

A-1. Spending by VA and for Major Programs in 2028 Under Alternative 

Scenarios, Compared With 2010 and 2017 Spending (in Nominal Dollars) 23

Figures

1. Some Possible Higher Spending Paths for VA Through 2028 3

2. Spending on Veterans’ Benefits Compared With the Number of 

Veterans, 1970 to 2017 6

3. VA’s Spending on Major Programs Compared With the Number of 

Veterans, 1970 to 2017 7

A-1. Some Possible Higher Spending Paths for VA Through 2028, in Nominal Dollars 22

List of Tables and Figures
About This Document

This Congressional Budget Office report was prepared at the request of the Chairman of the 

House Budget Committee. In accordance with CBO’s mandate to provide objective, impartial 

analysis, the report makes no recommendations.

Heidi Golding prepared the report with guidance from David Mosher and Edward G. Keating. 

Elizabeth Bass, Terry Dinan, Ann Futrell, Sebastien Gay, Sarah Jennings (formerly of CBO), 

David Newman, Evelio Rubiella, Logan Smith, and David Weaver provided useful comments.

David Chu of the Institute for Defense Analyses and Sebastian Negrusa of the Lewin Group provided comments on the draft. (The assistance of external reviewers implies no responsibility for 

the final product, which rests solely with CBO.) 

Jeffrey Kling, John Skeen, and Robert Sunshine reviewed the report. Elizabeth Schwinn edited 

the report; and Casey Labrack prepared it for publication. An electronic version of the report is 

available on CBO’s website (www.cbo.gov/publication/54881).

CBO continually seeks feedback to make its work as useful as possible. Please send any feedback 

to communications@cbo.gov.

Keith Hall

Director

December 2018