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Veterans' Medical Care Funding Boosted by $1.7 Billion for FY 2006

November 21, 2005

The final version of the FY 2006 budget for the VA is part of the Military Construction and Veterans' Affairs Appropriations Act (HR 2528).  The bill cleared the House and Senate by wide bipartisan margins and will be signed by President Bush in the next week or so.  It is important to note that the expected 1% across-the-board reduction for all discretionary programs will NOT be applied to veterans' medical care. 

The final version of the FY 2006 budget for the Department of Veterans' Affairs includes continued increases for treatment services for veterans living with mental illness.  In particular, for the first time, Congress has chosen to set a minimum funding requirement for veteran's medical care with respect to mental illness treatment services.  This effort was motivated out of concern that the VA needs to do significantly more to address the growing needs of veterans living with mental illness.

FY 2006, Congress has allocated $22.5 billion for the Veterans Health Administration (VHA).  As noted above, this is $1.7 billion more than FY 2005 levels and $575 million more than President Bush requested.  This does not include the allocation of $1.5 billion in emergency funds Congress appropriated last summer to make up for a shortfall in FY 2005 funds due to an unanticipated surge in demand for medical services.  Overall, the VHA funding has increased by 18% over the past two years. 

More importantly, the final budget for the VHA takes the unprecedented step of "fencing off" services for veterans with mental illness, requiring the VA to allocate a minimum of $2.2 billion for mental illness treatment and services.  The VA itself estimates that specialty mental health services in the will top $3 billion this year and that the entirety of health care supporting veterans with mental illness (both mental illness and general medical care) will soon approach $10 billion).

The legislative report accompanying HR 2528 -- which was endorsed by the full House -- states:

"The Committee has taken the unusual action of fencing a portion of medical services funding for one category of treatment because the Committee recognizes the need to dedicate resources to such treatment and wishes to be assured that funding for mental health care will not be siphoned off for other purposes during the year of execution." 

Proposal to Increase Fees on Veterans' Medical Care Rejected

A proposal to increase fees paid by certain veterans using the VA system were soundly rejected by Congress.  This proposal would have required most veterans who do not have a service-connected impairment or are not low-income to pay higher cost sharing for most services, including prescription drugs.  This proposal was excluded from both the House and Senate bills, as well as the final agreement.   

Congress Directs VA to Double Funding for Mental Illness Research

In addition, the final agreement on HR 2528 also calls on the VA to move forward in doubling its investment in mental illness research.  Current estimates are that the VA directs only 7% of its medical research budget of $784 million for mental illness research (estimated at $56 million in FY 2005).  Further, in its legislative report, the House Appropriations Committee notes a consensus among experts that mental illness will be the most pressing problem for the VA.  The report goes to note:

"The Committee believes that more effort into research will lead to earlier identification of problems and more effective treatment, thereby reducing the long-term complications and costs associated with mental health issues.  As a goal for fiscal year 2006, the Committee believes the Department should dedicate at 20% of its research budget to dealing with the issues of mental health diagnosis and treatment.  The Committee directs the Department to establish this goal and work toward achieving the goal by focusing investments in facilities with mental health specialization."

NAMI would like to offer thanks to the key leaders in Congress who made the increased funding for mental illness treatment and research a reality.  In particular, NAMI is grateful for the efforts of Representatives James Walsh (R-NY), Chet Edwards (D-TX) and Senators Kay Bailey Hutchison (R-TX) and Diane Feinstein (D-CA).


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