FY2020 Budget Request for the Military Health System

FY2020 Budget Request for the Military Health System

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May 8, 2019
FY2020 Budget Request for the Military Health System
On March 11, 2019, President Donald Trump submitted his
 $33.3 billion for DHP;
Fiscal Year (FY) 2020 budget request to Congress. The

Department of Defense (DOD) budget request totals $761.8
$8.1 billion for medical MILPERS;
billion, including $49.5 billion (6.5%) to fund the Military
 $0.3 billion for medical MILCON; and
Health System (MHS). DOD refers to this latter portion of

the DOD budget request as the unified medical budget
$7.8 billion for health care accrual
(UMB). The MHS delivers certain health entitlements
contributions to the Medicare Eligible
under Chapter 55 of Title 10, U.S. Code, to military
Retiree Health Care Fund (MERHCF).
personnel, retirees, and their families. The MHS provides
Defense Health Program (DHP)
health care to approximately 9.6 million beneficiaries in
The DHP account funds numerous MHS functions, such as
DOD hospitals and clinics–known as military treatment
health care delivery in MTFs, TRICARE, certain medical
facilities (MTFs)–and through civilian health care providers
readiness activities and expeditionary medical capabilities,
participating in TRICARE.
education and training programs, medical research,
Congress traditionally appropriates mandatory and
management and headquarters activities, facilities
discretionary funding for the MHS in several accounts
sustainment, and procurement. The FY2020 request for the
within the annual defense appropriations bill. These include
DHP account is $33.3 billion, which is 2.9% below the
the Defense Health Program (DHP), Military Personnel
appropriated amount for FY2019. Selected highlights from
(MILPERS), and Military Construction (MILCON).
this request are listed in Table 2, which includes programs
Funding is typically appropriated to both DOD’s base and
that DOD intends to create, expand, or reduce.
overseas contingency operations (OCO) budgets.
Military Personnel (MILPERS)
FY2020 MHS Budget Request
Medical MILPERS funds military and civilian personnel
The FY2020 MHS budget request is 2.3% ($1.2 billion)
within the MHS. This includes various pay and allowances,
below the FY2019 appropriation. The request, as shown in
such as basic, incentive, and special pays; subsistence for
Table 1, includes:
enlisted personnel; permanent change of station travel; and
retirement contributions.
Table 1. Military Health System Funding, FY2017-FY2020 Request
($ in bil ions)
FY2017
FY2018
FY2019
FY2020

Enacted
Enacted
Enacted
Request
Defense Health Program
$33.5
$33.5
$34.4
$33.3
Operations and Maintenance
$30.7
$30.4
$31.0
$31.8
Research, Development, Testing, and Evaluation
$2.1
$2.0
$2.2
$0.7
Procurement
$0.4
$0.7
$0.9
$0.5
Overseas Contingency Operations
$0.3
$0.4
$0.4
$0.3
MILPERS
$8.5
$8.6
$8.4
$8.1
MILCON
$0.3
$0.9
$0.4
$0.3
MERHCF Contributions
$7.0
$8.1
$7.5
$7.8
Grand Total
$49.3
$51.1
$50.7
$49.5
Source: Department of Defense, “Defense Budget Overview,” March 2019, p. 2-4, https://go.usa.gov/xmQ7X. Department of Defense, “Defense Health
Program Fiscal Year (FY) 2020 Budget Estimates,” March 2019, p. DHP-13, https://go.usa.gov/xmNWJ; Department of Defense, “Defense Health
Program Fiscal Year (FY) 2019 Budget Estimates,” February 2018, p. DHP-15, https://go.usa.gov/xmQ7E; Department of Defense, “Operation and
Maintenance Programs (O-1),” March 2017, pp. 31-31B, https://go.usa.gov/xmQ7p; Email communication with DOD officials, March 2019.
Notes: Numbers may not add up due to rounding. Enacted RDT&E figures include unrequested funds for the Congressional y Directed Medical
Research Program. Congress appropriates discretionary funding for the DHP, MILPERS, and MILCON accounts and mandatory funding for MERHCF
contributions.
https://crsreports.congress.gov

FY2020 Budget Request for the Military Health System
Table 2. Selected Highlights from the FY2020 Defense Health Program Request

$519.3 mil ion (3.6%) increase from FY2019 enacted (base

$13.32 mil ion dedicated to brain injury and disease
only) amount for the TRICARE program
prevention, treatment, and research

$334.5 mil ion (3.6%) increase from FY2019 enacted (base

$9.93 mil ion (35%) increase for electronic health record
only) amount for health care and related-services delivered
interface and patch testing
in MTFs

$7.7 mil ion to expand the MHS Virtual Health Program

$142.5 mil ion (45.5%) increase for support operations,

$5.52 mil ion for radiographic equipment (e.g., x-ray,
maintenance, and sustainment of DOD Healthcare
computed tomography, magnetic resonance imaging)
Management Systems Modernization (DHMSM) initiatives

(i.e., MHS Genesis)

$2 mil ion to establish a Knowledge, Skills, and Abilities
program office that would further develop KSAs to

$129 mil ion for new or revised capability requirements for
measure readiness for 62 deployable clinical specialties
MHS Genesis

$1.14 mil ion (7%) increase for the Military HIV Research

$78.9 mil ion dedicated to prototype development of
program
medical technologies, including promising drugs and

vaccines, medical devices, and knowledge products

0.4% (39,983) increase in eligible beneficiaries (baseline:
FY2019)

$20.7 mil ion (8%) increase for the Health Professions

Scholarship Program

13% (-14,707) reduction in military medical end strength
(baseline: FY2019)
DOD requests $8.1 billion for medical MILPERS for
Controlling Health Care Costs
FY2020, but does not break out the specific costs assigned
 What is DOD’s long-term strategy to control health care
to the MHS at the budget activity group, program element,
costs while sustaining military medical readiness
or line item level. This request is $300 million less than the
requirements?
FY2019 appropriation and reflects planned reductions in
 What mitigation strategies are being considered or have
military and civilian end strength levels.
been implemented to address rising drug costs in the
Military Construction (MILCON)
MHS?
Medical MILCON funds major MHS construction projects.
MHS Reform Efforts
In general, DHA coordinates with the Service medical
 What is the status of the transfer of MTFs from the
departments to identify, prioritize, and fund certain medical
military services to the Defense Health Agency (DHA)?
MILCON projects. For FY2020, DOD requests $256
 How have congressionally directed reform efforts
million for six medical construction projects:
impacted beneficiaries, health care providers, medical
 Replacement medical/dental clinic, Camp Pendleton,
readiness, military services, DHA, and non-DOD
CA ($17.7 million);
partners?
 Medical research acquisition building, Fort Detrick, MD
Military Medical End Strength
($27.8 million);
 Will projected personnel cost-savings be offset by
 Hospital expansion/modernization (increment #3),
increased costs for TRICARE?
Naval Support Activity Bethesda, MD ($96.9 million);


Will medical readiness be impacted by the reduction in
Hospital replacement (increment #2), Fort Leonard
military medical personnel?
Wood, MO ($50 million);
 Medical storage and distribution center, Joint Base
MHS Genesis Implementation
Charleston, SC ($33.3 million); and

 Will DOD require additional funding to maintain its
Replacement medical/dental clinic, NATO Air Base,
implementation timeline regarding deployment of MHS
Geilenkirchen, Germany ($30.4 million).
Genesis?
Medicare Health Care Accrual Contributions
Medicare health care accrual contributions fund the
Resources
MERHCF. In turn, the MERHCF funds health care
Department of Defense, “Defense Health Program Fiscal Year
expenses for Medicare-eligible military retirees and their
(FY) 2020 Budget Estimates,” March 2019,
families. Annually, each uniformed service contributes to
https://go.usa.gov/xmNWJ
the MERHCF based on its “expected average force strength
during that fiscal year” and investment amounts determined
CRS In Focus IF10530, Defense Primer: Military Health System,
by the Secretary of Defense. For FY2020, DOD requests
by Bryce H. P. Mendez
$7.8 billion.
CRS In Focus IF10514, Defense Primer: Defense Appropriations
Considerations for Congress
Process, by James V. Saturno and Brendan W. McGarry
As the annual defense appropriations cycle begins,

Congress may consider DOD’s funding and policy
priorities described in the FY2020 MHS budget request.
Bryce H. P. Mendez, Analyst in Defense Health Care
The following inquiries may assist Congress with receiving
Policy
further clarification on DOD’s budget request and
congressional oversight of the MHS.
IF11206
https://crsreports.congress.gov

FY2020 Budget Request for the Military Health System

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