Veterans Get Nearly $81 Billion in Historic FY 07 Plan

Landmark Budget Includes Largest Increase in Health Care Spending in History

WASHINGTON  Secretary of Veterans Affairs R. James Nicholson announced today that President Bush will seek a record $80.6 billion in the fiscal year 2007 budget for the Department of Veterans Affairs (VA), with the overwhelming majority of these resources targeted for health care and disability compensation.  The FY ’07 proposal represents an increase of $8.8 billion, or 12.2 percent, above the budget for 2006.

Veterans are a priority.  That’s why the President is proposing this historic budget with a landmark increase to continue the best health care and vital benefits to those veterans who count on VA the most, Nicholson said. With the support of Congress, we can take care of the needs of our newest generation of combat veterans, while honoring our commitment to veterans of earlier eras.

The FY ’07 budget proposal calls for $38.5 billion in discretionary funding — mostly for health care.  This budget contains the largest increase in discretionary funding for VA ever requested by a President.  For health care alone, the President’s request is an increase of $3.5 billion (or more than 11 percent) over the FY ’06 level.  The budget proposal also would provide $42.1 billion in mandatory funding, mostly for compensation, pension and other benefit programs… 

FY ’07 Budget Highlights 

This budget proposal ensures that the Department will be able to care for those veterans who count on VA the most.

·     With this budget proposal, the President, working in partnership with Congress, will have increased health care funding for veterans by 69 percent since FY ’01.

·     The budget continues the President’s commitment for VA to work closely with the Department of Defense to ensure that service members returning from Iraq and Afghanistan and their families receive timely, high-quality services and benefits.  

·     VA will be able to care for an estimated 5.3 million patients.  With this budget, the Department will continue providing world-class care for its high-priority patients, including over 100,000 veterans of Operation Iraqi Freedom and Operation Enduring Freedom.

·     The FY ’07 budget proposal includes $457 million for the Capital Asset Realignment for Enhanced Services (CARES) program, bringing the total Department investment to nearly $3 billion since FY 04.  The FY ’07 proposal includes funding for the continuation of medical facility projects in Long Beach, Calif.; and Denver, Colo., and funds new projects in American Lake, Wash.; Milwaukee, Wisc.; Columbia, Mo.; and St. Louis, Mo.

·     The FY ’07 budget request calls for a total investment of almost $3.2 billion in mental health services, which is $339 million above this year’s level.  This budget proposal ensures a full continuum of care for veterans with mental health issues, to include comprehensive treatment for veterans with post-traumatic stress disorder (PTSD).

·     The FY ’07 budget proposal requests $1.4 billion for prosthetics and sensory aids, a $160 million increase over FY ’06.

·     Funding for non-institutional long-term care would increase by nearly 10 percent over FY ’06, with a total investment of $535 million in the President’s proposed budget.

·     The FY ’07 budget proposal includes over $78 million for national cemetery construction projects, including funds for cemetery expansion and improvement at Great Lakes, Mich.; Dallas/Ft. Worth, Texas; and Saratoga, N.Y.  Resources are also included for the development of master plans for six new national cemeteries in Bakersfield, Calif.; Birmingham, Ala.; Columbia-Greenville, S.C.; Jacksonville, Fla.; Sarasota, Fla.; and southeastern Pennsylvania.  The budget also includes $32 million in grants for the construction of state veterans’ cemeteries.

Ensuring a Seamless Transition

The President’s FY ’07 budget request provides the resources necessary to fulfill our priority that service members’ transition from active duty military status to civilian life is as smooth and seamless as possible.  

Men and women still on active duty will find it easier to access VA benefits when they near the end of their military service because of a program that allows early application for disability claims and other benefits.  VA staff are located at 140 military installations around the nation, as well as in Korea and Germany, to assist active duty service members in applying for benefits before they separate from military service.

Applications from separating service members are now processed at two locations to improve efficiency and the consistency of our claims decisions.

In health care, VA has already facilitated transfers from military medical facilities to VA medical centers of several thousand injured service members returning from Operation Enduring Freedom and Operation Iraqi Freedom.

World-Class Health Care

The President’s FY ’07 budget proposal requests $34.3 billion for VA’s health care program.  This is an increase of $3.5 billion (or 11.3 percent) more than 2006 — the largest increase in VA’s medical care funding ever requested by a President.  It is 69 percent more than the FY ’01 enacted budget in place at the beginning of the administration.

With these resources, VA will be able to treat an estimated 5.3 million patients.  In 2007, 79 percent of all veteran patients are expected to be high priority — those veterans who count on VA the most (Priority 1-6 veterans).  

The President’s budget request also includes $457 million to continue the recommendations of the 2004 Capital Asset Realignment for Enhanced Services (CARES) report designed to modernize VA’s health care system.  The FY ’07 proposal brings the total Department investment to date to almost $3 billion.  This historic transformation means that VA will be able to provide greater access to high-quality care well into the future.

VA’s health care system continues to be the nation’s leader in delivering safe, accessible, and high-quality care that sets the national benchmark for excellence in health care.  Last year the prestigious Journal of the American Medical Association noted that VA’s health care system has quickly emerged as a bright star in the constellation of safety practice, with system-wide implementation of safe practices, training programs and the establishment of four patient-safety research centers.  

In addition, for the sixth consecutive year, VA has set the public and private sector standard for health care satisfaction on the American Customer Satisfaction Index conducted by the National Quality Research Center at the University of Michigan.  Patients included in the study gave VA health care higher marks than those received by private-sector facilities.

Responding Financially to Disabled Veterans

The President’s budget proposal for FY ’07 will enable VA to address the large growth in the number and complexity of claims for compensation and pension benefits, while at the same time increasing the processing accuracy of our most challenging compensation claims.  

The budget includes funds for these disability payments to nearly 3.7 million veterans in FY ’07, or more than 7 percent above the number at the end of FY ’05.

Key program improvements will affect both the education and vocational rehabilitation and employment programs.  The timeliness of processing original education claims will improve by eight days during the next two years, falling from 33 days in FY ’05 to 25 days in FY ’07.  In addition, VA will increase the percentage of disabled veterans successfully completing the vocational rehabilitation and employment program.

Cemeteries are National Shrines

With the resources requested in the FY ’07 budget, VA will expand access to national and state veterans’ cemeteries.  The Department will increase the percentage of veterans served by a burial option in a national or state veterans cemetery within 75 miles of their residence to nearly 84 percent.

The FY ’07 budget proposal calls for $161 million in operations and maintenance funding for national cemeteries, an increase of $11 million (or 7.4 percent) over the level for FY ’06.  These additional resources will ensure VA continues to meet the burial needs of veterans and maintain its national cemeteries as shrines dedicated to preserving our nation’s history and honoring veterans’ service and sacrifice. 

Highlights for Provisions

The President’s FY ’07 budget includes two provisions that will further ensure VA is able to care for those veterans who count on it the most by asking other non-disabled, higher income veterans (Priority 7 and 8 veterans) to pay a $250 annual enrollment fee and higher pharmacy co-payments (from $8 to $15).  

These veterans were not eligible to receive VA medical care at all, or only on a case-by-case space available basis, until 1999 when new authority allowed VA to enroll them in any year that resource levels permitted.  They typically have other alternatives for addressing their medical care costs, including third-party health insurance coverage and Medicare, and the provisions would ask those enrolled for VA care today to assume a modest share of the cost of their care.   

Under no circumstances will a veteran make a co-payment of any kind for the treatment of a service-connected condition.