FY2024 Budget Request for the Military Health System

FY2024 Budget Request for the Military Health System

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April 10, 2023
FY2024 Budget Request for the Military Health System
On March 9, 2023, President Joseph R. Biden submitted his
Defense Health Program (DHP)
Fiscal Year (FY) 2024 budget request to Congress.
The DHP, a sub-account under the O&M account, funds the
Discretionary funding in the Department of Defense (DOD)
following MHS functions: health care delivery in MTFs;
budget request totals $842.0 billion, including $58.7 billion
TRICARE; certain medical readiness activities and
(7.0%) to fund the Military Health System (MHS), which
expeditionary medical capabilities; education and training
delivers certain health entitlements under Chapter 55 of
programs; research, development, test, and evaluation
Title 10, United States Code, to military personnel, 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 FY2024 request for the DHP
as military treatment facilities (MTFs)—and through
account is $38.4 billion, which is 2.1% ($0.8 billion) below
civilian health care providers participating in TRICARE, a
the appropriated amount for FY2023. Table 2 highlights
DOD-administered health insurance-like program.
selected programs that DOD intends to create, maintain,
expand, reduce, or transfer to other DOD accounts.
Congress traditionally appropriates discretionary funding
for the MHS in several accounts within the annual defense
Military Personnel (MILPERS)
appropriations bill. These accounts include Operation and
The medical MILPERS account funds military personnel
Maintenance (O&M), Military Personnel (MILPERS), and
operating the MHS. This funding includes various pay and
Military Construction (MILCON). DOD refers to these
allowances, such as basic, incentive, and special pays;
portions of the budget as the unified medical budget
subsistence allowance; permanent change of station travel;
(UMB). The request does not include a proposal to modify
and retirement contributions. DOD requested $9.2 billion
statutory TRICARE cost-sharing requirements for
for medical MILPERS for FY2024, but does not break out
beneficiaries.
specific costs assigned to the MHS at the budget activity
FY2024 MHS Budget Request
group, program element, or line item level. This request is
higher than the FY2023 appropriation, reflecting a 1.8%
The FY2024 MHS budget request is 0.5% ($0.3 billion)
increase in military medical end-strength (+1,985
more than the FY2023 appropriation. Table 1 shows the
positions).
FY2024 request and previously enacted amounts for the
MHS.
Table 1. Military Health System Funding, FY2019-FY2024 Request
($ in bil ions)
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024

Enacted
Enacted
Enacted
Enacted
Enacted
Request
O&M (DHP)
$34.4
$37.1
$34.1
$37.4
$39.2
$38.4
DHP Operation & Maintenance
$31.3
$33.0
$31.1
$34.0
$35.6
$37.1
Research, Development, Testing, and Evaluation
$2.2
$3.7
$2.4
$2.6
$3.0
$0.9
Procurement
$0.9
$0.5
$0.5
$0.8
$0.6
$0.4
MILPERS
$8.4
$8.9
$8.3
$8.5
$8.9
$9.2
MILCON
$0.4
$0.3
$0.5
$0.5
$0.6
$0.5
MERHCF Contributions
$7.5
$7.8
$8.4
$9.3
$9.7
$10.6
Grand Total
$50.7
$51.4
$51.3
$55.7
$58.4
$58.7
Sources: Department of Defense (DOD), “Defense Budget Overview,” March 2023, p. 4-8; DOD “Defense Health Program Fiscal Year (FY) 2024
Budget Estimates,” March 2023, p. 1; and CRS In Focus IF12087, FY2023 Budget Request for the Military Health System, by Bryce H. P. Mendez.
Notes: Numbers may not add up due to rounding. DHP sub-totals include MHS funding for overseas contingency operations (OCO), direct
war costs, or “overseas operations costs.” The FY2024 request does not include funding that Congress historical y 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 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.
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FY2024 Budget Request for the Military Health System
Table 2. Selected Highlights from the FY2024 Defense Health Program Request
Selected Increases (Baseline: FY2023)
Selected Account Transfers

$402.8 mil ion increase in private sector care costs to align

$23.7 mil ion transfer from the Army and Air Force to
TRICARE reimbursement rates with Medicare
DHP for the consolidation of DOD public health functions
reimbursement rates

$5.9 mil ion transfer from DHP to Army for medical

$78.2 mil ion increase to address impacts of Executive
RDT&E realignment
Order 14026, Increasing the Minimum Wage for Federal

$4.6 mil ion transfer from DHP to the military services for
Contractors
operating and maintaining certain facilities

$4.6 mil ion increase for the TRICARE Competitive Plan

$2.4 mil ion transfer from Army to DHP for medical
Demonstration Program
RDT&E realignment

$2.1 mil ion increase to provide health care for victims of
Selected Activities of Interest
anomalous health incidents

$1,400.0 mil ion in clinical mental health programs and
Selected Decreases (Baseline: FY2023)
initiatives

$200.0 mil ion decrease in MTF pharmaceutical costs due

$47.1 mil ion for DOD Cancer Moonshot initiatives
to reduced MTF pharmacy utilization

$39.1 mil ion to improve the ability to “prevent, detect, and

$72.3 mil ion decrease in anticipation of reduced demand
respond to biological incidents and biological threats”
for COVID-19 related care in MTFs

$8.5 mil ion to enhance the Defense Occupational and

$31.9 mil ion decrease in facility sustainment funding
Environmental Health Readiness System

15.5 mil ion (8%) decrease for the Uniformed Services

$11.1 mil ion for the Mild Traumatic Brain Injury Initiative
University of the Health Sciences
In previous years, DOD planned to reduce military medical
clarification from DOD on the long-term strategy and
end-strength; however, Congress has acted to limit these
potential effects of DOD’s FY2024 MHS budget request.
reductions. Section 741 of the National Defense
Controlling Health Care Costs
Authorization Act for Fiscal Year 2023 (NDAA; P.L. 117-
DOD’s budget request noted that private sector care
263) extended certain limitations in end-strength reductions
accounted for 65% of the total care delivered to
until December 2027.
beneficiaries and that it “will continue to represent an
Military Construction (MILCON)
important part of the overall health system in [FY2024] and
Medical MILCON funds MHS construction projects. The
beyond.” DOD did not state a long-term strategy to control
Defense Health Agency (DHA) coordinates the planning
these health care costs while sustaining military medical
process to identify, prioritize, and fund medical MILCON
readiness requirements and other health-related program
projects. For FY2024, DOD requested $493.3 million for
investments.
ongoing and future construction projects. Of these, there are
Efficiency and Cost Effects of MHS Reform
five line-item requests to fund existing or new MILCON
The FY2017 NDAA (P.L. 114-328) directed a number of
projects:
reforms to streamline the administration of the MHS. The
 Ambulatory care clinic alterations, Marine Corps Air
accompanying conference report (H.Rept. 114-840) stated
Station Miramar, CA ($103.0 million);
that these reforms would “eliminate redundancy and
 Dental clinic replacement, Marine Corps Recruit Depot
generate greater efficiency, yielding monetary savings to
San Diego, CA ($101.6 million);
the Department.” In FY2024, DOD is to continue
 Medical center replacement, Rhine Ordnance Barracks,
implementation of MHS reform efforts and sustain its new
Germany ($77.2 million);
organizational structure. It is not clear what efforts the
 Hospital expansion/modernization, Naval Support
Department has taken to measure or quantify efficiency and
Activity Bethesda, MD ($101.8 million); and
cost effects, if any, resulting from these MHS reforms.
 Ambulatory care center replacement, Guantanamo Bay,
Resources
Cuba ($60.0 million).
Department of Defense, “Defense Health Program Fiscal Year
Medicare Health Care Accrual Contributions
(FY) 2024 Budget Estimates,” March 2023
(MERHCF)
CRS In Focus IF12087, FY2023 Budget Request for the Military
Medicare health care accrual contributions fund the
Health System, by Bryce H. P. Mendez
MERHCF. In turn, the MERHCF funds health care
CRS In Focus IF10530, Defense Primer: Military Health System,
expenses for Medicare-eligible military retirees and their
by Bryce H. P. Mendez
families. Each uniformed service contributes to the
CRS In Focus IF11273, Military Health System Reform, by Bryce
MERHCF annually based on its “expected average force
H. P. Mendez
strength during that fiscal year” and investment amounts
determined by the Secretary of Defense. For FY2024, DOD

requested $10.6 billion for the MERHCF.
Bryce H. P. Mendez, Analyst in Defense Health Care
Considerations for Congress
Policy
As part of the defense appropriations process, Congress
may consider the following lines of inquiry to obtain
IF12377
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FY2024 Budget Request for the Military Health System

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