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M-RCBG Faculty Working Paper No. 2011-06

Current and Projected Future Costs of Caring for Veterans of the Iraq and Afghanistan Wars

Linda J. Bilmes

June 2011


As of December 2010, 1.25 million service men and women had returned home from Iraq and Afghanistan. Many have been wounded or injured in some way — over 90,000 seriously enough to require medical evacuation from the conflict. A much larger number suffer from other injuries, ranging from brain injuries to hearing loss. To date, 650,000 Iraq and Afghanistan veterans have been treated in Department of Veterans Affairs (VA) medical facilities for a wide range of medical conditions. Nearly 500,000 of these veterans are receiving compensation from the VA for injuries sustained or worsened during their military service. The US has already spent $31.3 billion since 2001 in providing medical care and disability benefits to these veterans.

But our commitment to veterans continues after the war ends. The service members who have been deployed to the Afghanistan and Iraq conflicts are entitled to receive free or subsidized medical treatment for the rest of their lives. In addition, a significant percentage of them are eligible to receive permanent disability compensation and other benefits for physical and/or mental disabilities stemming from their wartime service. Veterans of the current wars will are also entitled to receive a certain educational, housing, training and other benefits funded by government agencies outside of VA.

The history of previous wars shows that the cost of caring for war veterans rises for several decades and peaks in 30-40 years or more after a conflict. This will be especially true for veterans of the current wars. Veterans from Iraq and Afghanistan are utilizing VA medical services and applying for disability benefits at much higher rates than in previous wars. Based on current patterns of benefit claims and medical usage, it is estimated that the total present value of such costs for Iraq and Afghanistan veterans over the next 40 years is in the range of $600 billion to $1 trillion.

In addition, there are significant social-economic costs that will be borne by these veterans and their families, including factors such as family members who give up paid employment to become unpaid caregivers, loss of income for self-employed service members, and diminished quality of life.

Finally, although Veterans care comprises the fourth largest category of government spending, the magnitude of Iraq and Afghanistan veterans’ costs is grossly understated in government projections. There is no provision set aside to cover these future obligations. Given that our pledge to care for veterans is a form of “deferred compensation”, we should appropriate funds for these inevitable long-term costs at the time we budget for the wars in which they will fight.

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