Cap GI Bill Flight Training Benefits

$2.0 Savings in Millions1

Mandatory

President's Budget (FY2020) Status: Included

The Department of Veterans Affairs provides educational benefits to veterans under the GI Bill. Veterans can choose to attend public or private universities, and the VA pays the school for tuition and fees. To prevent abuse of the program, the benefit value is capped for private institutions ($22,805 for the 2017–2018 academic year), and for public universities, the limit is the in-state tuition cost.

Typically, in-state public tuition is less than the private university cap. However, tuition for programs in flight training at public schools can exceed the private tuition value limit. While there is nothing objectionable about veterans studying flight training, there is also no reason for the federal government to provide a larger subsidy for one subject (flight training) at one type of school than it provides for other subjects at other types of schools.

This option would place a cap on the subsidy for public school flight training tuition equal to the cap on private school tuition. According to the Congressional Budget Office, this would save $2 million in the first year and $137 million over 10 years.2

End Enrollment in VA Medical Care for Veterans in Priority Groups 7 and 8

$7.9 Savings in Billions3

Mixed

President's Budget (FY2020) Status: Not Addressed

The Department of Veterans Affairs should focus on the unique needs of military medicine. A 2014 Congressional Research Service study revealed that more than one of every 10 VA patients is not a veteran, and the number of non-veterans using VA health care services has increased faster in recent years than has the number of veteran patients.4 VA resources should be used solely to provide health care to veterans.

The VA ranks veterans who seek medical care on a scale of one to eight, with the lower numbers being assigned the highest priority. The groups are defined according to such factors as income and disability status. Veterans in Priority Groups (PGs) 7 and 8 do not have compensable service-connected disabilities, and their incomes tend to exceed the VA’s national income and geographic income thresholds.

According to the Congressional Budget Office, almost 90 percent of enrollees in PGs 7 and 8 had other health care coverage in 2017.5 The Department of Veterans Affairs should not be providing benefits for veterans in PGs 7 and 8. Scarce VA health care dollars should be spent first on veterans with the most severe disabilities.

Additional Reading

• Justin Bogie, “Congress Should Exercise Restraint in Veterans Affairs Funding Bill,” Heritage Foundation Issue Brief No. 4548, May 17, 2016.
• John S. O’Shea, “Reforming Veterans Health Care: Now and for the Future,” Heritage Foundation Issue Brief No. 4585, June 24, 2016.

Put a 10-Year Time Limit on Initial Applications for Disability Compensation for Veterans

$1.0 Savings in Billions6

Mandatory

President's Budget (FY2020) Status: Not Addressed

Currently, military veterans may file for service-related disability benefits no matter how long ago their service ended. First-time applicants at or close to retirement age may file for and receive benefits even if they left the military decades ago. Such applicants represent a significant portion of new enrollees. As of 2012, 43 percent of first-time disability recipients were over the age of 55 despite average tours of duty ending by age 30.

Allowing for long-term effects of service injuries to manifest themselves is necessary and proper. However, after a certain point, this policy runs the risk of causing the military disability system to cover conditions that were primarily the result of post-service activity or the natural aging process.

Conditions such as tinnitus and moderate hearing loss are present in many disability applications. It is impossible to distinguish between hearing damage caused by proximity to gunfire and explosions in the military and hearing damage caused by aging, work environment, and leisure activity post-service. Similarly, determining the primary cause of musculoskeletal conditions can be nearly impossible after enough time has passed.

Offering veterans a 10-year window to apply for disability compensation would provide sufficient time for long-term effects from service to become apparent while also reducing the potential for dubious claims. Such a reform would be in line with changes implemented in the United Kingdom and would save $1 billion in FY 2020 and $19 billion between FY 2020 and FY 2029.

Additional Reading

• Congressional Budget Office, Veterans’ Disability Compensation: Trends and Policy Options, August 2014.

Eliminate Concurrent Receipt of Retirement Pay and Disability Compensation for Veterans

$9.0 Savings in Billions7

Mandatory

President's Budget (FY2020) Status: Not Addressed

Until 2003, military retirees were prohibited from collecting full Defense Department retirement and VA disability benefits simultaneously. Military retirees eligible for VA disability benefits lost $1 in Defense Department retirement benefits for every $1 in VA disability benefits they collected. The rationale for this offset policy was that concurrent receipt of retirement and disability payments was compensating veterans for the same service twice.

Policy changes instituted in 2004 allowed Defense Department retirees to collect benefits from both programs simultaneously. Under this concurrent-receipt policy, the share of military retirees who also receive VA disability benefits rose from 33 percent in 2005 to just over 50 percent in 2015.8 In FY 2013, more than 2,300 veterans received $100,000 or more each in annual benefits, with the highest annual benefit amounting to more than $200,000.9

The U.S. government should honor its promise to the men and women who serve without generating excessive benefit payouts. Simply returning to the long-standing pre-2004 policy under which veterans’ disability payments offset retirement pay would reduce excessive benefits and save taxpayers $9 billion in FY 2020 and $139 billion between FY 2020 and FY 2029.

Additional Reading

• Romina Boccia, “Triple-Dipping: Thousands of Veterans Receive More than $100,000 in Benefits Every Year,” Heritage Foundation Issue Brief No. 4295, November 6, 2014.

Narrow Eligibility for Veterans Disability by Excluding Disabilities Unrelated to Military Duties

$2.4 Savings in Billions10

Mandatory

President's Budget (FY2020) Status: Not Addressed

Disability compensation for veterans should focus on service-related conditions. Veterans are eligible for disability compensation from the VA for medical conditions or injuries that occurred or worsened during active-duty military service, as well as for conditions that were not necessarily incurred or worsened due to military service.

The U.S. General Accounting Office (now Government Accountability Office) identified seven conditions that are not likely to be caused or worsened by military service: arteriosclerotic heart disease, chronic obstructive pulmonary disease, Crohn’s disease, hemorrhoids, multiple sclerosis, osteoarthritis, and uterine fibroids.11 This proposal would end veterans’ disability compensation for these non-service-related conditions and save $2.4 billion in FY 2020 and $25.7 billion from FY 2020 to FY 2029.

Additional Reading

• John S. O’Shea, “Reforming Veterans Health Care: Now and for the Future,” Heritage Foundation Issue Brief No. 4585, June 24, 2016.

Endnotes

1. Estimated savings of $2.0 million for FY 2020 are based on estimates from Congressional Budget Office, “H.R. 5449, Navy SEAL Chief Petty Officer William ‘Bill’ Mulder (Ret.) Transition Improvement Act of 2018, As Ordered Reported by the House Committee on Veterans’ Affairs on July 12, 2018,” Cost Estimate, July 19, 2018, https://www.cbo.gov/system/files/2018-07/hr5649.pdf (accessed March 16, 2019). All $2.0 million represents mandatory savings. Heritage experts assume that the FY 2019 savings and spending levels will apply for FY 2020 because they represent the first year of full implementation of the policy.
2. Ibid.
3. Estimated savings of $7.9 billion for FY 2020 are based on estimates from Congressional Budget Office, Options for Reducing the Deficit: 2019 to 2028, December 2018, p. 186, https://www.cbo.gov/system/files?file=2018-12/54667-budgetoptions.pdf (accessed March 13, 2019). The option to “End Enrollment in VA Medical Care for Veterans in Priority Groups 7 and 8” includes $10.7 billion in discretionary savings and $2.8 billion in increased mandatory spending in FY 2020, for a net savings of $7.9 billion.
4. Erin Bagalman, “The Number of Veterans That Use VA Health Care Services: A Fact Sheet,” Congressional Research Service Report for Members and Committees of Congress, June 3, 2014, http://fas.org/sgp/crs/misc/R43579.pdf (accessed March 16, 2019).
5. Congressional Budget Office, Options for Reducing the Deficit: 2019 to 2028, p. 187.
6. Estimated savings of $1.0 billion for FY 2020 are based on estimates from Congressional Budget Office, Veterans’ Disability Compensation: Trends and Policy Options, August 2014, p. 3, https://www.cbo.gov/sites/default/files/113th-congress-2013-2014/reports/45615-VADisability_2.pdf (accessed March 16, 2019). All $1.0 billion represents mandatory savings. The option to limit initial applications to within 10 years provides an estimated $19 billion in savings over 10 years. Because savings could accumulate over time, we estimate that $1 billion of the total $19 billion would occur within the first year of implementation in FY 2020.
7. Estimated savings of $9.0 billion for FY 2020 are based on estimates from Congressional Budget Office, Options for Reducing the Deficit: 2017 to 2026, p. 34, https://www.cbo.gov/system/files?file=2018-09/52142-budgetoptions2.pdf (accessed March 17, 2019). All $9.0 billion represents mandatory savings. The option to “eliminate Concurrent Receipt of Retirement Pay and Disability Compensation for Disabled Veterans” includes $9 billion in mandatory spending in FY 2020. Heritage experts assume that the FY 2018 savings level will apply for FY 2020 (as opposed to the estimated $15 billion level for FY 2020) because it represents the first year of full implementation of the policy.
8. Congressional Budget Office, Options for Reducing the Deficit: 2017 to 2026, p. 34.
9. Seto J. Bagdoyan, Acting Director, Forensic Audits and Investigative Service, U.S. Government Accountability Office, letter to The Honorable Tom Coburn, M.D., Ranking Minority Member, Committee on Homeland Security and Governmental Affairs, U.S. Senate, re: “Disability Compensation: Review of Concurrent Receipt of Department of Defense Retirement, Department of Veterans Affairs Disability Compensation, and Social Security Disability Insurance,” GAO14-854R, September 30, 2014, p. 4, http://www.gao.gov/assets/670/666267.pdf (accessed March 16, 2019).
10. Estimated savings of $2.4 billion for FY 2020 are based on estimates from Congressional Budget Office, Options for Reducing the Deficit: 2019 to 2028, p. 107. All $2.4 billion represents mandatory savings.
11. U.S. General Accounting Office, VA Benefits: Law Allows Compensation for Disabilities Unrelated to Military Service, GAO/HRD-89-60, July 1989, https://www.gao.gov/assets/150/147926.pdf (accessed March 16, 2019).