FY2021 Budget Request for the Military Health System
link to page 1 link to page 2 
March 2, 2020
FY2021 Budget Request for the Military Health System
On February 10, 2020, President Donald Trump submitted
$33.1 billion for DHP;
his Fiscal Year (FY) 2021 budget request to Congress. The
$8.9 billion for medical MILPERS;
Department of Defense (DOD) budget request totals $705.4
$0.5 billion for medical MILCON; and
billion, including $50.8 billion (7.2%) to fund the Military
Health System (MHS). DOD refers to this latter portion of
$8.4 billion for health care accrual
the DOD budget request as the unified medical budget
contributions to the Medicare Eligible
(UMB). The MHS delivers certain health entitlements
Retiree Health Care Fund (MERHCF).
under Chapter 55 of Title 10, U.S. Code, to military
Defense Health Program (DHP)
personnel, retirees, and their families. The MHS provides
The DHP funds numerous MHS functions, such as health
health care to approximately 9.6 million beneficiaries in
care delivery in MTFs, TRICARE, certain medical
DOD hospitals and clinics—known as military treatment
readiness activities and expeditionary medical capabilities,
facilities (MTFs)—and through civilian health care
education and training programs, medical research,
providers participating in TRICARE.
management and headquarters activities, facilities
Congress traditionally appropriates mandatory and
sustainment, procurement, and civilian personnel. The
discretionary funding for the MHS in several accounts
FY2021 request for the DHP account is $33.1 billion,
within the annual defense appropriations bill. These include
which is 3.8% ($1.3 billion) below the appropriated amount
the Defense Health Program (DHP), Military Personnel
for FY2020. Table 2 highlights selected programs that
(MILPERS), and Military Construction (MILCON).
DOD intends to create, expand, reduce, or transfer to the
Funding is typically appropriated to both DOD’s base and
military services.
overseas contingency operations (OCO) budgets.
Military Personnel (MILPERS)
FY2021 MHS Budget Request
Medical MILPERS funds military personnel within the
The FY2021 MHS budget request is 1.2% ($0.6 billion)
MHS. This includes various pay and allowances, such as
below the FY2020 appropriation. The request, as shown in
basic, incentive, and special pays; subsistence for enlisted
Table 1, includes the following:
personnel; permanent change of station travel; and
retirement contributions.
Table 1. Military Health System Funding, FY2018-FY2021 Request
($ in bil ions)
FY2018
FY2019
FY2020
FY2021
Enacted
Enacted
Enacted
Request
Defense Health Program
$33.5
$34.4
$34.4
$33.1
Operations and Maintenance
$30.4
$31.0
$31.3
$31.3
Research, Development, Testing, and Evaluation
$2.0
$2.2
$2.3
$0.5
Software & Digital Technology Pilot Program
-
-
-
$0.1
Procurement
$0.7
$0.9
$0.4
$0.6
Overseas Contingency Operations
$0.4
$0.4
$0.3
$0.3
MILPERS
$8.6
$8.4
$8.9
$8.9
MILCON
$0.9
$0.4
$0.3
$0.5
MERHCF Contributions
$8.1
$7.5
$7.8
$8.4
Grand Total
$51.1
$50.7
$51.4
$50.8
Sources: Department of Defense (DOD), “Defense Budget Overview,” February 2020, p. 2-4; DOD, “Defense Health Program Fiscal Year (FY) 2021
Budget Estimates,” February 2020, p. DHP-15; DOD, “Defense Health Program Fiscal Year (FY) 2020 Budget Estimates,” March 2019, p. DHP-13; DOD,
“Defense Health Program Fiscal Year (FY) 2019 Budget Estimates,” February 2018, p. DHP-15.
Notes: Numbers may not add up due to rounding. Not included in the FY2021 request is Congress’s typical add-ons to the DHP, such as unrequested
medical research funding. The Software & Digital Technology Pilot Program is a new DHP budget activity realigned from Operations and Maintenance in
FY2021. Congress appropriates discretionary funding for the DHP, MILPERS, and MILCON accounts and mandatory funding for MERHCF contributions.
https://crsreports.congress.gov
FY2021 Budget Request for the Military Health System
Table 2. Selected Highlights from the FY2021 Defense Health Program Request
$1.8 bil ion transfer from the Defense Health Agency
$32.8 mil ion to expand critical care and trauma services at
(DHA) to the military departments for medical readiness
the 99th Medical Group—Nellis Air Force Base
activities
$31.3 mil ion to repair medical facilities damaged in
$866.7 mil ion (5.8%) increase from FY2020 enacted (base
Hurricanes Michael and Florence
only) amount for private sector care
$16.1 mil ion decrease for medical technology development
$334.6 mil ion to fund certain civil service positions to
areas, such as military operational medicine, military
mitigate a reduction in uniformed medical positions
infectious disease, and combat casualty care
$308.5 mil ion for new or revised capability requirements
$8.7 mil ion to develop software that maintains a
for MHS Genesis
servicemember’s longitudinal exposure record
$278.7 mil ion (3.0%) increase from FY2020 enacted (base
$5.5 mil ion (3.2%) decrease for the Uniformed Services
only) amount for health care and related-services delivered
University of the Health Sciences
in MTFs
$30.7 mil ion to fund unit-based mental health and physical
$45.9 mil ion (10.6%) increase for deployment and
therapy providers
sustainment of DOD Healthcare Management Systems
0.2% (22,696) increase in eligible beneficiaries (baseline:
Modernization (DHMSM) initiatives (i.e., MHS Genesis)
FY2020)
$36.3 mil ion reduction associated with DOD’s proposal to
9.5% (-7,422) reduction in military medical end strength
downsize 50 MTFs
(baseline: FY2020)
DOD requests $8.9 billion for medical MILPERS for
Controlling Health Care Costs
FY2021, 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 equivalent to the FY2020
requirements?
appropriation and reflects DOD’s plan to reduce military
How will DHP cost reductions resulting from the
medical end strength (-7,422 positions) and civilian end
Defense-Wide Review impact beneficiaries, health care
strength (-4,070 positions). The FY2020 budget request
providers, medical readiness, military departments,
also included a plan to reduce military medical end strength
DHA, and non-DOD partners?
(-17,991 positions); however, section 719 of the FY2020
MHS Reform Efforts
National Defense Authorization Act (P.L. 116-92) enacted
Does DOD require additional time (beyond 2021) to
certain limitations on which DOD may make such
implement congressionally directed MHS reform
reductions.
efforts?
Military Construction (MILCON)
What is DOD’s plan for sustaining or establishing new
military-civilian health care partnerships?
Medical MILCON funds MHS construction projects. In
general, DHA coordinates with the military services
MTFs and Military Medical End Strength
identify, prioritize, and fund certain medical MILCON
How will DOD manage projected increases in health
projects. For FY2021, DOD requests $504 million for
care demand while downsizing MTFs and reducing the
ongoing, future, and minor construction projects, including:
number of military medical personnel?
Hospital expansion/modernization (increment #4),
Are the military departments adequately resourced to
Naval Support Activity Bethesda, MD ($180 million);
recruit and train military medical personnel in critically
Hospital replacement (increment #3), Fort Leonard
short wartime specialties?
Wood, MO ($40 million); and
Budget Transparency
Medical center replacement, Rhine Ordnance Barracks,
How will DOD conduct oversight and measure program
Germany ($200 million).
performance for funding lines transferred between
Medicare Health Care Accrual Contributions
DHA, the military departments, and other DOD entities?
Medicare health care accrual contributions fund the
MERHCF. In turn, the MERHCF funds health care
Resources
expenses for Medicare-eligible military retirees and their
Department of Defense, “Defense Health Program Fiscal Year
families. Annually, each uniformed service contributes to
(FY) 2021 Budget Estimates,” February 2020
the MERHCF based on its “expected average force strength
during that fiscal year” and investment amounts determined
CRS Insight IN11224, FY2021 Defense Budget Request: An
Overview, by Brendan W. McGarry
by the Secretary of Defense. For FY2021, DOD requests
$8.4 billion. The MILPERS account typically assigns
CRS In Focus IF10530, Defense Primer: Military Health System,
MERHCF contributions as mandatory spending.
by Bryce H. P. Mendez
Considerations for Congress
As the annual defense appropriations cycle begins,
Congress will consider all of DOD’s funding and policy
Bryce H. P. Mendez, Analyst in Defense Health Care
priorities. The following inquiries may assist Congress in
Policy
considering the FY2021 MHS budget request.
https://crsreports.congress.gov
FY2021 Budget Request for the Military Health System
IF11442
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 | IF11442 · VERSION 1 · NEW
March 2, 2020
FY2021 Budget Request for the Military Health System
On February 10, 2020, President Donald Trump submitted
$33.1 billion for DHP;
his Fiscal Year (FY) 2021 budget request to Congress. The
$8.9 billion for medical MILPERS;
Department of Defense (DOD) budget request totals $705.4
$0.5 billion for medical MILCON; and
billion, including $50.8 billion (7.2%) to fund the Military
Health System (MHS). DOD refers to this latter portion of
$8.4 billion for health care accrual
the DOD budget request as the unified medical budget
contributions to the Medicare Eligible
(UMB). The MHS delivers certain health entitlements
Retiree Health Care Fund (MERHCF).
under Chapter 55 of Title 10, U.S. Code, to military
Defense Health Program (DHP)
personnel, retirees, and their families. The MHS provides
The DHP funds numerous MHS functions, such as health
health care to approximately 9.6 million beneficiaries in
care delivery in MTFs, TRICARE, certain medical
DOD hospitals and clinics—known as military treatment
readiness activities and expeditionary medical capabilities,
facilities (MTFs)—and through civilian health care
education and training programs, medical research,
providers participating in TRICARE.
management and headquarters activities, facilities
Congress traditionally appropriates mandatory and
sustainment, procurement, and civilian personnel. The
discretionary funding for the MHS in several accounts
FY2021 request for the DHP account is $33.1 billion,
within the annual defense appropriations bill. These include
which is 3.8% ($1.3 billion) below the appropriated amount
the Defense Health Program (DHP), Military Personnel
for FY2020. Table 2 highlights selected programs that
(MILPERS), and Military Construction (MILCON).
DOD intends to create, expand, reduce, or transfer to the
Funding is typically appropriated to both DOD’s base and
military services.
overseas contingency operations (OCO) budgets.
Military Personnel (MILPERS)
FY2021 MHS Budget Request
Medical MILPERS funds military personnel within the
The FY2021 MHS budget request is 1.2% ($0.6 billion)
MHS. This includes various pay and allowances, such as
below the FY2020 appropriation. The request, as shown in
basic, incentive, and special pays; subsistence for enlisted
Table 1, includes the following:
personnel; permanent change of station travel; and
retirement contributions.
Table 1. Military Health System Funding, FY2018-FY2021 Request
($ in bil ions)
FY2018
FY2019
FY2020
FY2021
Enacted
Enacted
Enacted
Request
Defense Health Program
$33.5
$34.4
$34.4
$33.1
Operations and Maintenance
$30.4
$31.0
$31.3
$31.3
Research, Development, Testing, and Evaluation
$2.0
$2.2
$2.3
$0.5
Software & Digital Technology Pilot Program
-
-
-
$0.1
Procurement
$0.7
$0.9
$0.4
$0.6
Overseas Contingency Operations
$0.4
$0.4
$0.3
$0.3
MILPERS
$8.6
$8.4
$8.9
$8.9
MILCON
$0.9
$0.4
$0.3
$0.5
MERHCF Contributions
$8.1
$7.5
$7.8
$8.4
Grand Total
$51.1
$50.7
$51.4
$50.8
Sources: Department of Defense (DOD), “Defense Budget Overview,” February 2020, p. 2-4; DOD, “Defense Health Program Fiscal Year (FY) 2021
Budget Estimates,” February 2020, p. DHP-15; DOD, “Defense Health Program Fiscal Year (FY) 2020 Budget Estimates,” March 2019, p. DHP-13; DOD,
“Defense Health Program Fiscal Year (FY) 2019 Budget Estimates,” February 2018, p. DHP-15.
Notes: Numbers may not add up due to rounding. Not included in the FY2021 request is Congress’s typical add-ons to the DHP, such as unrequested
medical research funding. The Software & Digital Technology Pilot Program is a new DHP budget activity realigned from Operations and Maintenance in
FY2021. Congress appropriates discretionary funding for the DHP, MILPERS, and MILCON accounts and mandatory funding for MERHCF contributions.
https://crsreports.congress.gov
FY2021 Budget Request for the Military Health System
Table 2. Selected Highlights from the FY2021 Defense Health Program Request
$1.8 bil ion transfer from the Defense Health Agency
$32.8 mil ion to expand critical care and trauma services at
(DHA) to the military departments for medical readiness
the 99th Medical Group—Nellis Air Force Base
activities
$31.3 mil ion to repair medical facilities damaged in
$866.7 mil ion (5.8%) increase from FY2020 enacted (base
Hurricanes Michael and Florence
only) amount for private sector care
$16.1 mil ion decrease for medical technology development
$334.6 mil ion to fund certain civil service positions to
areas, such as military operational medicine, military
mitigate a reduction in uniformed medical positions
infectious disease, and combat casualty care
$308.5 mil ion for new or revised capability requirements
$8.7 mil ion to develop software that maintains a
for MHS Genesis
servicemember’s longitudinal exposure record
$278.7 mil ion (3.0%) increase from FY2020 enacted (base
$5.5 mil ion (3.2%) decrease for the Uniformed Services
only) amount for health care and related-services delivered
University of the Health Sciences
in MTFs
$30.7 mil ion to fund unit-based mental health and physical
$45.9 mil ion (10.6%) increase for deployment and
therapy providers
sustainment of DOD Healthcare Management Systems
0.2% (22,696) increase in eligible beneficiaries (baseline:
Modernization (DHMSM) initiatives (i.e., MHS Genesis)
FY2020)
$36.3 mil ion reduction associated with DOD’s proposal to
9.5% (-7,422) reduction in military medical end strength
downsize 50 MTFs
(baseline: FY2020)
DOD requests $8.9 billion for medical MILPERS for
Controlling Health Care Costs
FY2021, 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 equivalent to the FY2020
requirements?
appropriation and reflects DOD’s plan to reduce military
How will DHP cost reductions resulting from the
medical end strength (-7,422 positions) and civilian end
Defense-Wide Review impact beneficiaries, health care
strength (-4,070 positions). The FY2020 budget request
providers, medical readiness, military departments,
also included a plan to reduce military medical end strength
DHA, and non-DOD partners?
(-17,991 positions); however, section 719 of the FY2020
MHS Reform Efforts
National Defense Authorization Act (P.L. 116-92) enacted
Does DOD require additional time (beyond 2021) to
certain limitations on which DOD may make such
implement congressionally directed MHS reform
reductions.
efforts?
Military Construction (MILCON)
What is DOD’s plan for sustaining or establishing new
military-civilian health care partnerships?
Medical MILCON funds MHS construction projects. In
general, DHA coordinates with the military services
MTFs and Military Medical End Strength
identify, prioritize, and fund certain medical MILCON
How will DOD manage projected increases in health
projects. For FY2021, DOD requests $504 million for
care demand while downsizing MTFs and reducing the
ongoing, future, and minor construction projects, including:
number of military medical personnel?
Hospital expansion/modernization (increment #4),
Are the military departments adequately resourced to
Naval Support Activity Bethesda, MD ($180 million);
recruit and train military medical personnel in critically
Hospital replacement (increment #3), Fort Leonard
short wartime specialties?
Wood, MO ($40 million); and
Budget Transparency
Medical center replacement, Rhine Ordnance Barracks,
How will DOD conduct oversight and measure program
Germany ($200 million).
performance for funding lines transferred between
Medicare Health Care Accrual Contributions
DHA, the military departments, and other DOD entities?
Medicare health care accrual contributions fund the
MERHCF. In turn, the MERHCF funds health care
Resources
expenses for Medicare-eligible military retirees and their
Department of Defense, “Defense Health Program Fiscal Year
families. Annually, each uniformed service contributes to
(FY) 2021 Budget Estimates,” February 2020
the MERHCF based on its “expected average force strength
during that fiscal year” and investment amounts determined
CRS Insight IN11224, FY2021 Defense Budget Request: An
Overview, by Brendan W. McGarry
by the Secretary of Defense. For FY2021, DOD requests
$8.4 billion. The MILPERS account typically assigns
CRS In Focus IF10530, Defense Primer: Military Health System,
MERHCF contributions as mandatory spending.
by Bryce H. P. Mendez
Considerations for Congress
As the annual defense appropriations cycle begins,
Congress will consider all of DOD’s funding and policy
Bryce H. P. Mendez, Analyst in Defense Health Care
priorities. The following inquiries may assist Congress in
Policy
considering the FY2021 MHS budget request.
https://crsreports.congress.gov
FY2021 Budget Request for the Military Health System
IF11442
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 | IF11442 · VERSION 1 · NEW