THE INDEPENDENT BUDGET

1 BUDGET Recommendationsfor the Department of veterans AffairsTHEINDEPENDENTBUDGETF iscal Years2019and2020 For more than 30 years, the co-authors of The INDEPENDENT BUDGET DAV (Disabled American veterans ), paralyzed veterans of america (PVA), and veterans of Foreign Wars (VFW) have presented our BUDGET and policy recommendations to Congress and the Administration. Our recommendations are meant to inform Congress and the Administration of the needs of our members and all veterans and to offer substantive solutions to address the many health care and benefits challenges they face. This BUDGET report serves as our benchmark for properly funding the Department of veterans Affairs (VA) to ensure the delivery of timely, quality health care and accurate and appropriate benefits. The INDEPENDENT BUDGET veterans service organizations (IBVSOs) recognize that Congress and the Administration continue to face immense pressure to reduce federal spending.

2 However, we believe that the ever-growing demand for health care and benefits, particularly with more health care being provided in the community and purchased by VA, certainly validates the continued need for sufficient funding. We understand that VA has fared better than most federal agencies in BUDGET proposals and appropriations, but the real measure should be how well the funding matches the demand for veterans benefits and appreciate that Congress remains committed to doing the right thing and has continued to provide increases in appropriations dollars. However, the serious access problems in the health care system identified in 2014 and the continued pressure being placed on the claims processing system raise serious questions about the adequacy of resources being provided and how VA chooses to spend these resources. The IBVSOs are jointly releasing this report on the BUDGET for VA and our projections for VA s funding needs across all programs.

3 In submitting our recommendations the IBVSOs are attempting to produce an honest assessment of need that is not subject to the politics of federal BUDGET development and negotiations that inevitably have led to continuous funding deficits. Our recommendations include funding for all discretionary programs for FY 2019 as well as advance appropriations recommendations for medical care accounts for FY 2020. The FY 2019 projections are particularly important because VA has been operating under a continuing resolution nearly halfway through FY 2018 without the additional resources necessary to meet all the requirements and initiatives of the Department. We hope that Congress will take this defined shortfall very seriously and appropriately address this need. Our own FY 2019 estimates affirm this need, which is based upon pending FY 2018 appropriations bills. We hope that the House and Senate Committees on veterans Affairs as well as the Military Construction and veterans Affairs Appropriations Subcommittees will be guided by these estimates in making their decisions to ensure sufficient, timely, and predictable funding for VA.

4 Introduction 1 Introduction2 INDEPENDENT BUDGET Fiscal Years 2019 and 2020VA Accounts for FY 2019 and FY 2020 Advance Appropriations(Dollars in Thousands)FY 2018* AppropriationFY 2019 Admin. RevisedFY 2019 INDEPENDENT BUDGET (IB)FY 2020 Admin. RequestFY 2020 IB INDEPENDENT BudgetVeterans Health Administration Medical Services48,732,55449,161,16553,661,27463 ,167,77454,687,544 Medical Community Care9,663,1188,384,70414,752,15314,973,0 92 Choice Program**2,100,0001,900,000 Subtotal Medical Services60,495,67259,445,86968,413,427 63,167,77469,660,636 Medical Support and Compliance6,754,4807,239,1566,838,2447,1 06,1507,367,749 Medical Facilities6,141,8805,914,2887,389,7365,2 76,6767,506,132 Subtotal Medical Care, Discretionary73,392,03272,599,31382,641, 407 75,550,600 84,534,517 Medical Care Collections3,254,9683,443,1333,580,999 Total, Medical Care BUDGET Authority (including Collections)76,647,00076,042,446 82,641,40779,131,59984,534,517 Medical and Prosthetic Research722,262727,369758,000 Millions veterans Program65,000 Total, veterans Health Administration77,369,26276,769,81583,464 ,407 General Operating ExpensesVeterans Benefits Administration2,910,0002,868,9093,103,71 1 General Administration329,891367,629354,639 Board of veterans Appeals166,000174,748167,624 Total, General Operating Expenses3,405,8913,411,286 3,625,974 Departmental Admin.

5 And Misc. ProgramsInformation Technology4,055,5004,184,5714,103,698 National Cemetery Administration1,207,0001,600,000 Office of Inspector General306,193315,836310,811 Total, Dept. Admin. and Misc. Programs4,525,6935,879,4616,182,315 Construction ProgramsConstruction, Major512,4301,127,4861,730,000 Construction, Minor342,570706,889761,000 Grants for State Extended Care Facilities110,000150,000200,000 Grants for State Vets Cemeteries45,00045,00051,000 Total, Construction Programs1,010,0002,029,375 2,742,000 Other Discretionary180,215202,196184,000 Total, Discretionary BUDGET Authority (including Medical Collections)86,491,06188,292,13396,198,6 96* Assumes funding levels in S. 1557, the Military Construction, veterans Affairs, and Related Agencies Appropriations Act, 2018.**Choice Program funding is currently scored as a mandatory cost for VA. Summary of Recommendations 3 Summary of RecommendationsVeterans Health Administration Total Medical CareFY 2019 IB Recommendation$ billionFY 2019 Revised Administration Request$ billionMedical Care Collections$ billionTotal$ billionFY 2018 Estimated Final Appropriation$ billionMedical Care Collections$ billionTotal$ billionFY 2020 IB Advance Appropriations Recommendation$ billionFY 2020 Administration Advance Appropriations Request$ billionMedical Care Collections$ billionTotal$ billionThe IBVSOs have serious concerns about VA s current funding level for FY 2018 based on the current continuing resolution funding the Department through the first half of the fiscal year largely based on the Administration s request.

6 Last year however, the former Secretary of veterans Affairs openly admitted that the FY 2018 advance appropriations request was significantly short. He also indicated that the new Administration and Congress would have to correct this shortfall. We are concerned that Congress has not corrected this problem with VA currently operating under a continuing resolution nearly been operating under a continuing resolution nearly halfway through FY 2018 without the additional resources necessary to meet all the requirements and initiatives of the legislation is enacted, starting in FY 2019 VA will record community care obligations on the date of payment rather than the date of authorization. This change in the timing of obligations is estimated to result in a one-time availability of funds totaling $ billion. VA also identifies in its BUDGET request $ billion in mandatory BUDGET authority, which it requested in 2018 for the Choice program, to be carried forward into 2019.

7 We are concerned the availability of such funds remains uncertain. If any amounts are not realized, VA must request and Congress must provide these needed addition, VA s BUDGET request indicates that VA will begin to implement its proposal to consolidate and streamline its community care programs, known as the veterans Coordinated Access and Rewarding Experiences (Veteran CARE). With Congress considering different legislative proposals including expanded eligibility criteria and VA s CARE plan including several proposals that require congressional action, the direct impact on needed resources to execute this new program must be determined and addressed. Congress must provide the necessary resources to successfully implement any newly enacted community care legislation to ensure veterans receive high quality and timely medical care from VA, and when necessary in the FY 2019, the IB recommends approximately $ billion in total medical care funding.

8 We are estimating Congress to appropriate $ billion FY 2018 (which includes an assumption of approximately $ billion in medical care collections). Additionally, The INDEPENDENT BUDGET recommends approximately $ billion for total Medical Care for FY 2020. This recommendation reflects the necessary adjustment to the baseline for all Medical Care program funding in the preceding fiscal year. Notably, the VA proposes to consolidate the Choice program and Medical Community Care into the Medical Services account for FY 2020. Medical ServicesAppropriations for FY 2019FY 2019 IB Recommendation$ billionFY 2019 Revised Administration Request$ billionMedical Care Collections$ billionSubtotal$ billionFY 2018 Estimated Final Appropriation$ billionMedical Care Collections$ billionSubtotal$ billionFor FY 2019, The INDEPENDENT BUDGET recommends $ billion for Medical Services. This recommendation is 4 INDEPENDENT BUDGET Fiscal Years 2019 and 2020 Summary of Recommendationsa reflection of multiple components.

9 These components include the following recommendations:Current Services Estimate$50,794,232,000 Increase in Patient Workload$1,636,092,000 Additional Medical Care Program Cost$1,230,951,000 Total FY 2019 Medical Services$53,661,274,000 The current services estimate reflects the impact of projected uncontrollable inflation on the cost to provide services to veterans currently using the system. This estimate also assumes a percent increase for pay and benefits across the board for all VA employees in FY 2019. Our estimate of growth in patient workload is based on a projected increase of approximately 94,000 new unique patients. These patients include priority group 1 8 veterans and covered non- veterans . We estimate the cost of these new unique patients to be approximately $ billion. The INDEPENDENT BUDGET believes that there are additional projected medical program funding needs for VA. Those costs total over $ billion.

10 Specifically, we believe there is real funding needed to address the array of long-term-care issues facing VA, including the shortfall in non-institutional services due to the unremitting waitlist for home and community based services; to provide additional centralized prosthetics funding (based on actual expenditures and projections from the VA s Prosthetics and Sensory Aids Service); funding to expand and improve services for women veterans ; funding to support the recently approved authority for reproductive services, to include in vitro fertilization (IVF); funding to allow VA to meet the costs for emergency care as dictated by the Richard W. Staab v. Robert A. McDonald court ruling, and; initial funding for implementation of extending comprehensive caregiver support services to severely ill and injured veterans of all eras. Long-Term Services & SupportsThe INDEPENDENT BUDGET recommends a modest increase of $82 million for FY 2019.