link to page 1 link to page 3 
May 8, 2024
FY2025 Budget Request for the Military Health System
On March 11, 2024, President Joseph R. Biden submitted
Defense Health Program (DHP)
his Fiscal Year (FY) 2025 budget request to Congress.
The DHP, resourced by O&M funds, performs the
Discretionary funding in the Department of Defense (DOD)
following MHS functions: health care delivery in MTFs;
budget request totals $849.8 billion, including $61.4 billion
TRICARE; certain medical readiness activities and
(7.2%) to fund the Military Health System (MHS), which
expeditionary medical capabilities; education and training
delivers certain health entitlements under Title 10, Chapter
programs; research, development, test, and evaluation
55, of the U.S. Code, to service members, military retirees,
(RDT&E); management and headquarters activities;
and their families. The MHS provides health care to 9.6
facilities sustainment; procurement; and civilian and
million beneficiaries in DOD hospitals and clinics—known
contract personnel. The FY2025 request for the DHP
as military treatment facilities (MTFs)—and through
account is $40.3 billion, which is 1.0% ($0.4 billion) more
civilian health care providers participating in TRICARE,
than the appropriated amount for FY2024. Table 2
DOD’s health-insurance-like program.
highlights selected programs that DOD intends to create,
maintain, expand, reduce, or transfer to other accounts.
Congress traditionally appropriates discretionary funding
for the MHS in several types of accounts within the annual
Military Personnel (MILPERS)
defense appropriations bill. These types of accounts include
The medical MILPERS account funds military personnel
Operation and Maintenance (O&M), Military Personnel
operating the MHS. This funding includes various pay and
(MILPERS), and Military Construction (MILCON). DOD
allowances, such as basic, incentive, and special pays;
refers to these portions of the budget as the unified medical
subsistence allowance; permanent change of station travel;
budget (UMB). The request does not include a proposal to
and retirement contributions. DOD requested $9.5 billion
modify statutory TRICARE cost-sharing requirements for
for medical MILPERS for FY2025 but does not identify
beneficiaries.
personnel costs related to the MHS at more detailed levels
FY2025 MHS Budget Request
(e.g., budget activity group, program element, or line item).
This request is nearly the same as the FY2024 request,
The FY2025 MHS budget request is 1.8% ($1.1 billion)
reflecting a 0.02% increase in military medical end strength
more than the FY2024 appropriation. Table 1 shows the
(+17 positions).
FY2025 request and previously enacted amounts for the
MHS.
Table 1. Military Health System Funding, FY2020-FY2025 Request
($ in billions)
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
Account
Enacted
Enacted
Enacted
Enacted
Enacted
Request
O&M (DHP)
$37.1
$34.1
$37.4
$39.2
$39.9
$40.3
DHP Operation & Maintenance
$33.0
$31.1
$34.0
$35.6
$36.6
$38.9
Research, Development, Test, and Evaluation
$3.7
$2.4
$2.6
$3.0
$2.9
$1.0
Procurement
$0.5
$0.5
$0.8
$0.6
$0.4
$0.4
MILPERS
$8.9
$8.3
$8.5
$8.9
$9.2
$9.5
MILCON (DHA)
$0.3
$0.5
$0.5
$0.6
$0.5
$0.5
MERHCF Contributions
$7.8
$8.4
$9.3
$9.7
$10.6
$11.0
Grand Total
$51.4
$51.3
$55.7
$58.4
$60.2
$61.3
Sources: Department of Defense (DOD), “Defense Budget Overview,” March 2024, p. 4-11; DOD, “Defense Health Program Fiscal Year (FY)
2025 Budget Estimates,” March 2024, p. 1; explanatory statement accompanying Division A of P.L. 118-47; explanatory statement accompanying
Division A of P.L. 118-42; CRS In Focus IF12377, FY2024 Budget Request for the Military Health System, by Bryce H. P. Mendez; and
correspondence with DOD officials.
Notes: Numbers may not add up due to rounding. The FY2025 request does not include funding that Congress historically adds to the DHP
(e.g., unrequested medical research funding). The FY2020 and FY2021 enacted amounts include supplemental funding appropriated from the
CARES Act (P.L. 116-136). O&M (DHP) refers to a DOD budget account, whereas DHP Operation & Maintenance refers to a subordinate budget
https://crsreports.congress.gov
FY2025 Budget Request for the Military Health System
activity. The Medicare-Eligible Retiree Health Care Fund (MERHCF) refers to the accrual contributions that pay for future health care expenses
of Medicare-eligible TRICARE beneficiaries.
https://crsreports.congress.gov
FY2025 Budget Request for the Military Health System
Table 2. Selected Highlights from the FY2025 Defense Health Program Request
Selected Increases (Baseline: FY2024 request)
Selected Account Transfers
•
$380.5 million increase to “sustain and improve” MTF care
•
$162.5 million transfer to the Joint DOD-VA Medical
capabilities
Facility Demonstration Fund
•
$125.6 million increase to allow MTF pharmacies to expand •
$15 million transfer to the DOD-VA Health Care Joint
formularies and fill more prescriptions
Incentive Fund
•
$32.3 million increase for Facilities, Sustainment,
Selected Activities of Interest
Restoration, and Modernization (FSRM) programs
•
$46.8 million to implement recommendations from the
Selected Decreases (Baseline: FY2024 request)
Suicide Prevention and Response Independent Review
•
$103.2 million decrease for estimated costs to implement
Commission
Executive Order 14026, “Increasing the Minimum Wage for •
$14.2 million to support certain Major Simulation Medical
Federal Contractors”
Centers
•
$98.9 million decrease for projected private-sector care
•
$11.3 million to fund research efforts of the Military
costs
Traumatic Brain Injury Initiative
•
$92.2 million decrease for projected COVID-related care
•
$1.9 million to fund Joint Task Force-Red Hill requirements
In previous years, DOD planned to reduce military medical
Considerations for Congress
end strength; however, Congress has acted to limit these
As part of the defense appropriations process, Congress
reductions. Section 741 of the James M. Inhofe National
could consider the following lines of inquiry on the long-
Defense Authorization Act for Fiscal Year 2023 (NDAA;
term strategy and potential effects of DOD’s FY2025 MHS
P.L. 117-263) extended certain limitations in end-strength
budget request.
reductions until December 2027.
MHS Stabilization
Military Construction (MILCON)
In a December 2023 memorandum to senior DOD leaders,
The medical MILCON account funds MHS construction
Deputy Secretary of Defense Kathleen H. Hicks directed
projects. The Defense Health Agency (DHA) coordinates
actions intended to “reattract beneficiaries” to MTF care in
the planning process to identify, prioritize, and fund
order to “support the National Defense Strategy, increase
medical MILCON projects. For FY2025, DOD requested
clinical readiness, mitigate risks to [military] requirements,
$463.9 million for nine line-item requests to fund existing
and reduce long-term cost growth in private sector care.”
or new MILCON projects:
The memorandum also directed the department to reattract
•
at least 7% “of available care from the private sector back
$96.8 million for ambulatory care center replacement
to MTFs ... by December 31, 2026.” DOD states that the
(Increment 2) at Naval Station Guantanamo Bay, Cuba;
•
FY2025 MHS budget request reflects investments to
$77.7 million for medical center addition/alteration at
stabilize MTFs while fully funding “anticipated [private-
Naval Support Activity Bethesda, MD;
•
sector care] requirements to reduce risk to other DOD
$72.1 million for ambulatory care center replacement–
programs” and limiting growth to inflation assumptions
dental at Marine Corps Recruit Depot Parris Island, SC;
•
only.
$64.9 million for ambulatory care center replacement at
Kunsan Air Base, South Korea;
•
Carryover Funding for Health Care Investments
$45.0 million for ambulatory care center replacement–
The FY2025 DOD budget request includes a description of
Area 22 at Camp Pendleton, CA;
•
a proposal to allow DOD to “transfer unobligated balances
$41.0 million for ambulatory care center replacement at
of expiring discretionary funds” in the DHP account into a
Fort Carson, CO;
•
“Health Care Transformational Fund.” DOD intends to use
$26.4 million for ambulatory care center
the fund for targeting “structural investments” (e.g.,
addition/alteration–Area 53 at Camp Pendleton, CA;
•
facilities repair and modernization backlog) and to
$24.9 million for ambulatory care center
maximize its “health care investments without additional
addition/alteration–Area 62 at Camp Pendleton, CA; and
•
topline increases.”
$15.0 million for ambulatory care center (Increment 3)
at Joint Base Andrews, MD.
Resources
Medicare Health Care Accrual Contributions
Department of Defense, “Defense Health Program Fiscal Year
Medicare health care accrual contributions fund the
(FY) 2025 Budget Estimates,” March 2024
Medicare-Eligible Retiree Health Care Fund (MERHCF).
CRS In Focus IF12377, FY2024 Budget Request for the Military
In turn, the MERHCF funds health care expenses for
Health System, by Bryce H. P. Mendez
Medicare-eligible military retirees and their families. Each
CRS In Focus IF10530, Defense Primer: Military Health System,
uniformed service contributes to the MERHCF annually
by Bryce H. P. Mendez
based on its “expected average force strength during that
fiscal year” and investment amounts determined by the
Secretary of Defense. For FY2025, DOD requested $11.0
Bryce H. P. Mendez, Specialist in Defense Health Care
billion for the MERHCF.
Policy
IF12660
https://crsreports.congress.gov
FY2025 Budget Request for the Military Health System
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF12660 · VERSION 1 · NEW