Updated August 13, 1998
CRS Report for Congress
Received through the CRS Web
Veterans and Smoking-Related Illnesses: Congress
Enacts Limits to Compensation
Dennis W. Snook
Specialist in Social Legislation
Education and Public Welfare Division
With enactment of P.L. 105-178 (H.R. 2400), the Transportation Equity Act for the
21 st Century (TEA-21), Congress limited authority of the Department of Veterans
Affairs (VA) to grant service-connected compensation to veterans who, after the
enactment date, claim that their smoking-related illnesses are traceable to tobacco use
that began during their military service. P.L. 105-178's prohibition on most smokingrelated VA claims is the resolution of an issue with potentially explosive federal costs.
Subsequent technical amendments included in P.L. 105-205, the Internal Revenue
Service reform legislation, removed the implication that smoking may have been
misconduct, and made other minor clarifications.
The issue surfaced in 1993, when the VA General Counsel determined that under
VA law — which conditions veterans compensation on disabilities traceable to military
service — diseases linked to tobacco use that began during military service are serviceconnected disabilities. After several years of study, in 1997 the VA Undersecretary for
Health concluded that nicotine addiction is a disease, and the General Counsel
reaffirmed the 1993 decision. The President’s FY1998 and FY1999 budgets
recommended prohibiting VA from awarding compensation to veterans for adverse
effects of tobacco use, and estimated the savings to be $16.9 billion over 5 years. The
Congressional Budget Office (CBO), using a slower rate in the growth of claims based
on tobacco use had estimated the change would save $10.5 billion over the period.
Conferees on TEA-21 used VA’s savings estimate, committing $15.4 billion to
offset costs of highway construction; the remaining funds were used to improve various
veterans benefits. Among improvements are a 20% increase to veterans education
benefits; increased amounts for special adaptations to houses and automobiles for
severely disabled veterans; increased payments for veterans requiring full-time aid and
attendance; and restoration of payments for surviving spouses of disabled veterans, in
cases in which the surviving spouse’s subsequent marriage ends in divorce or death.
Finally, P.L. 105-178 calls on VA to “take all steps necessary to recover from tobacco
companies” the costs of medical care for veterans with smoking-related illnesses. (This
report will be updated from time-to-time to reflect legislative developments.)
Congressional Research Service ˜ The Library of Congress
In its FY1998 and FY1999 budgets, the Administration requested legislation that
would deny that a service-connection exists for “disabilities or deaths based solely on
their being attributable, in whole or in part, to veterans’ use of tobacco products during
service.” The proposed legislation would negate a “precedent legal opinion” by the VA
General Counsel in 1993 that, under current law, the VA is liable for compensation claims
for illnesses related to tobacco use among veterans. According to the proposed
legislation, only if the disease appeared before the period of service ended or during a
post-service presumptive period1 would the disease be considered service-connected.
To be compensable under current law, a disability may not be due to a veteran’s (1)
abuse of alcohol or drugs; or, (2) willful misconduct. VA concluded that tobacco use is
not drug abuse, nor is it willful misconduct (though VA might, in individual cases, find
tobacco use willful misconduct if the veteran “knew or intended the consequences of
tobacco use with a wanton and reckless disregard of its possible consequences”).
Nevertheless, VA would not generally regard smoking as “wanton and reckless.”
The Administration’s FY1999 budget estimates savings from precluding tobaccorelated compensation claims at $16.9 billion over 5 years. CBO, using a slower claims
growth rate in the early years, projected savings of $10.5 billion over 5 years, and about
$45 billion over 10 years. Both projections use the same underlying assumptions about
the number of veterans with smoking-related diseases who began tobacco use during
military service; neither has attempted to fully assess VA’s total long-term exposure to
claims based on nicotine addiction. Although regarding smoking-related illnesses as
service-connected disabilities would give the affected veterans high-priority access to VA
medical services, neither the Administration nor CBO estimated secondary cost effects
on the VA medical care system by passage or rejection of the proposed language.
Following the 1993 opinion of its General Counsel, VA halted adjudication of
tobacco-related claims while it studied ramifications. In May of 1997, VA’s
Undersecretary for Health concluded that nicotine addiction is a disease; the General
Counsel affirmed the 1993 decision, adding that when nicotine addiction is shown to be
linked to diseases arising after separation from active duty, those “secondary” diseases are
also to be regarded as service-connected. VA then began processing some 7,000 claims
pending in various stages; less than 400 have been approved. The legal opinions from the
VA General Counsel do not address claims by survivors of veterans whose deaths may
be attributable to smoking-related illnesses. Such claims would likely be governed by a
similar line of reasoning that led to the opinion concerning claims from veterans.
Retroactive application to survivor claims would appear to be similarly governed.
While there are no actual data on the number of total possible claims, the potential
number of claims is in the millions. Furthermore, the “echo” of service-connected claims
may continue for decades, through payments that may automatically be paid to the
dependents and survivors of veterans who die from service-connected conditions.
VA law specifies various time periods after the completion of active duty during which the
onset of certain diseases are automatically considered to be service-connected.
Balancing government and individual responsibility for nicotine addiction. One
issue is the government’s responsibility when its military personnel made unwise health
choices, which were at least facilitated if not openly encouraged by government actions.
Some argue that American taxpayers should not be held liable for illnesses caused by
veterans’ decisions to use harmful tobacco products. In testimony before the Senate
Veterans Affairs Committee on March 31, 1998, acting VA Secretary Togo D. West, Jr.
said that “the use of tobacco products is not a requirement of military service [and] it is
inappropriate to compensate those veterans who do use tobacco, and their survivors, under
a program developed for veterans who became disabled in service to our nation.”
However, as James A. Endicott, Jr., former General Counsel of VA and author of the
1993 decision finding VA liable for tobacco-related claims as service-connected claims,
pointed out during that same hearing, veterans were not generally aware of the dangers
of smoking, “and our veterans were in many cases provided that first cigarette by our
government as part of their daily food ration or as part of a comfort pack ... clearly, the
government was the agent that ultimately gave those cigarettes to our veterans.”
Furthermore, VA generally views the origin in time of an illness or disability as more
important than its cause. If the disability is traceable to a period of military service, VA
regards it as service-connected, even if the cause is unrelated to the service itself.
Defining habits adverse to health as diseases. In 1997, the VA Undersecretary for
Health concluded that nicotine addiction is a disease for purposes of VA benefit claims.
However, others have argued that individuals’ dispositions are often an important factor
in addiction. If nicotine addiction is defined as a disease rather than simply as a condition
about which health care professionals are understandably concerned, might other habits
or addictions be regarded as medical problems warranting similar consideration? For
instance, if dietary habits that originated during military service are shown to have
potentially adverse effects on longer-term health, could such habits become the basis for
claiming a service-connection if disabling conditions arise?
VA law forbids compensation when a condition results from “willful misconduct”
or, in the case of alcohol or drugs, from “misuse.” Thus, the law appears to distinguish
between “use” and “abuse” of these substances. This distinction could apply to
dependence on alcohol or various psychoactive prescription drug treatments in which
frequent and legal use was never considered abuse or willful misconduct. Secondary
disabilities arising from such habitual use could also be regarded as service-connected,
using the analogous precedent of nicotine addiction as a disease in which its secondary
effects are regarded by VA as service-connected conditions.
Including costs for nicotine addiction of veterans in any settlement with the
tobacco industry. Some veterans advocates contend that because the Administration is
pursuing liability for the addictive qualities of nicotine in settlements with the tobacco
industry, costs of compensation to veterans should be a part of any liability settlement.
Otherwise, these critics suggest, the Administration is arguing that tobacco manufacturers
are liable for adverse effects of nicotine addiction on the one hand, and on the other hand,
denying such liability for the federal government when it purveyed these harmful nicotine
products, even after its own studies identified the probability of such harm.
Budget cost estimates likely understate the magnitude of the problem. For
budget estimating purposes, VA and CBO projections rely upon data from an impact
study of the effect on VA of allowing smoking-related claims.2 That report projected that
about 1.2 million veterans might be able to file such claims during the next 10 years.
However, in anticipation of Congress enacting a strict limitation on tobacco-based
disability claims, VA did not request additional appropriations to fund more claims
processing staff, thereby placing some limits on the speed with which such claims could
CBO estimates that annual outlays could reach $9 billion within 10 years. Such
costs could be substantially higher if more veterans claim that tobacco use originated with
military service than was assumed for the estimates, and/or if a larger proportion of VA
cases of each disease is linked to smoking than has been established for the general
population. Assumptions used for the budget projections have the effect of artificially
limiting estimates of VA’s long-term exposure to smoking-related claims:
First, the projections estimate costs for veterans over age 45 who have already
developed smoking-related illnesses. Additional diseases are likely to appear in that
population. Survey data analyzed by VA show that the percentage of younger veterans
who have ever regularly smoked is nearly as high as for older veterans, and among current
smokers, younger veterans smoke in greater percentages than older veterans. As a result,
the prevalence of smoking-related diseases may continue near current rates for a
substantial period of time.
Second, based on survey data about what ages veterans began smoking, VA assumed
that 44% of veterans who ever smoked could claim that their tobacco use began during
military service. VA’s impact study cites survey data showing that 70-75% of veterans
had regularly smoked at some time in their lives. Because of the absence of any direct
evidence, the VA study uses the percentages of those who began to smoke after age 18
as the basis for the assumption as to how many veterans began using tobacco during their
military service. Yet, because of the absence of any hard evidence about when veterans
actually started smoking, the percentage of veterans who might be able to claim to have
begun using tobacco during military service could climb to near 70%: If a veteran could
reasonably claim to have smoked at all, it would be difficult to rigorously evaluate or
effectively rebut a claim that nicotine addiction had its origins during military service.
Third, prevalence rates among veterans of 12 categories of smoking-related diseases
were assumed to match the rates for those diseases in the general population, after
adjusting for demographic differences in the two populations.3 The prevalence rate for
veterans is then multiplied by the fraction of that prevalence that medical science has
estimated as attributable to smoking. However, this step confuses a rate at which these
diseases among the population are linked to smoking, with a rate dependent upon the
findings of adjudicators in specific cases. VA law assumes that the benefit of doubt will
go to veterans with well-grounded claims. If 90% of lung cancers in men are caused by
Department of Veterans Affairs Tobacco-Related Compensation Claims. Report of Jeffrey E.
Harris, MD, PhD, Consultant to VA. September 15, 1997
The 12 categories include a number of specific kinds of cancer, three cardiovascular diseases,
and two noncancerous respiratory diseases.
smoking, it would be difficult to deny any specific case in which a veteran with lung
cancer claimed that it was attributable to a smoking habit begun during military service.
Whether or not nicotine addiction is classified as a service-connected condition
may effect access to VA medical care for some veterans. The Administration does not
address the implications to the VA medical system of the decision to regard tobaccorelated diseases as service-connected, or of reversing that decision. In contrast to the
relatively automatic or “mandatory” appropriations Congress provides to meet the funding
requirements for VA’s compensation program, Congress determines the level of funding
for VA medical care resources each year during the appropriations process. Thus, there
is no necessary connection between a change in the numbers of veterans eligible for VA
compensation and the number of veterans who can be provided VA medical services.
A change in the classification of particular veterans seeking VA medical care can,
however, affect whether those veterans are likely to have access to such care. Access to
VA medical care is controlled through a system of priorities, so that all resources
available to the system can be used, while assuring that services will be available for
veterans whose claims for medical care have the highest priority. Veterans with the
highest priority are those seeking care for service-connected conditions, followed by
categories of veterans awarded service-connected disability compensation, who are
seeking care for other conditions. Others with relatively high priority are veterans in
special groups, such as former prisoners-of-war, and veterans presumed exposed to Agent
Orange, nuclear radiation, or unknown environmental contaminants in the Persian Gulf.
The remaining category of veterans with free, high-priority access to VA medical care
qualify because their incomes and assets fall below certain levels.
About 96% of all VA medical services are free to veterans to whom they are
provided. About 40% of veterans seeking care have a service-connected condition; VA
medical resources are sufficient to assure that these veterans receive all services they
require. About 54% of veterans receiving services qualify for free VA care by meeting
the income and asset threshold. The remaining 4% are provided “discretionary” care as
defined under VA law. Veterans in the discretionary category have access to services
only if resources are available to them after services have been provided to all applicants
of a higher priority. Such veterans become obligated for cost-sharing payments roughly
equivalent to similar payments under the Medicare program for any services they receive.
Veterans with diseases related to nicotine addiction that began during military
service have the highest priority access to VA medical care. Approving compensation
claims based on a disability related to service-connected tobacco use, or removing
nicotine addiction and diseases related to that addiction from the category of serviceconnected conditions, could change the priority position of some afflicted veterans
seeking medical service. Under the Administration’s proposal, veterans with diseases
related to nicotine addiction, who are not also in one of the above high priority categories,
would be moved down the priority schedule to the discretionary care level.
The Senate Budget Resolution calls for denying tobacco related claims. The
Senate Budget Committee assumed savings of $10.5 billion over FY1999-2003, in VA
mandatory spending from passage of the proposed reversal of VA’s decision, using the
funds as a partial offset for costs of the highway bill. During debate, several Members
argued that compensation for adverse effects of nicotine addiction was a significant
expansion of the disability program that should not occur without a vote by Congress.
Others claimed that any savings from the change should be used to expand VA medical
care, or other veterans programs.
Legislation to block VA claims based on tobacco use is included in TEA-21.
During development of legislation authorizing highway construction projects, both
Houses considered using savings from blocking tobacco-related VA compensation claims;
the Senate’s bill, S. 1173, contained the change as an offset to the bill’s costs. Veterans
groups mounted a vigorous campaign seeking a different outcome; some advocates
opposed the change outright, others sought a share of any savings for veterans programs.
The House version, H.R. 2400, contained a provision expressing the sense of the House
that the bill’s costs would not be offset by funds drawn from changes to veterans benefits,
a position subsequently reaffirmed by a unanimous vote. However, both Houses
overwhelmingly adopted the renamed bill (the Transportation Equity Act for the 21st
Century) which contained the provision ending VA tobacco-related claims.
The conference report incorporated the Administration’s higher savings estimate of
$16.9 billion for the changes, allocating $15.4 billion for TEA-21, with the remainder
used for specific improvements to various veterans benefits. Effective October 1, 1998,
the following benefits are improved:
! The basic rate for determining education benefits payable under the Montgomery
GI Bill program was raised by 20%.
! Amounts VA can spend for adapting a house for a severely disabled veterans was
raised from $38,000 to $43,000; for adapting a car, the amount was raised from
$5,500 to $8,000.
! Maximum rates of means-tested pensions for totally-disabled wartime veterans in
need of full time aid and attendance was raised by $600 annually (the total amount
payable depends on dependents, assets, and other income).
! Benefits were restored for the surviving spouses of veterans who died of serviceconnected disabilities, for cases in which a subsequent marriage of the surviving
spouse ended in divorce or death.
Veterans whose applications were filed before enactment, will have their application
adjudicated under old law. The bill also contains language calling on VA to seek recovery
from tobacco companies, of all costs incurred by VA for the treatment of tobacco-related
illnesses, and recommends that Congress adopt language authorizing VA to provide such
medical care to veterans with tobacco-related illnesses. Language encouraging VA to
seek reimbursement from tobacco companies for all costs it sustains because of smokingrelated illnesses among veterans is also contained in S. 1415, the Universal Tobacco
Settlement Act, under consideration in the Senate.
Immediately after enactment of P.L. 105-178, VA identified changes that were
needed to clarify its application. In addition, veterans complained that the new law made
it appear that their smoking was misconduct. Language to clarify the changes, and to
remove the implications of misconduct, was included in P.L. 105-208, the reform of the
Internal Revenue Service.