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June 15, 2021

FY2022 Budget Request for the Military Health System

On May 28, 2021, President Biden submitted his Fiscal
Year (FY) 2022 budget request to Congress. The
Department of Defense (DOD) budget request totals $715.0
billion, including $54.0 billion (7.6%) to fund the Military
Health System (MHS). The MHS delivers certain health
entitlements under Chapter 55 of Title 10, United States
Code to military personnel, retirees, and their families. The
MHS provides health care to nearly 9.7 million
beneficiaries in DOD hospitals and clinics-known as
military treatment facilities (MTFs)-and through civilian
health care providers participating in TRICARE, a DOD-
administered health insurance-like program.
Congress traditionally appropriates mandatory and
discretionary funding for the MHS in several accounts
within the annual defense appropriations bill. These
accounts include Operation and Maintenance (O&M),
Military Personnel (MILPERS), and Military Construction
(MILCON). DOD refers to these portions of the budget as
the unified medical budget (UMB). In previous years, DOD
requested and Congress appropriated MHS funding in
DOD's base and overseas contingency operations (OCO)
budgets. For FY2022, DOD requests MHS funding
(including those for direct war costs) in the base budget
only. The request does not include a proposal to modify
statutory cost-sharing requirements for beneficiaries.

FY2022 M HS Budget Request
The FY2022 MHS budget request is 5.2% ($2.7 billion)
above the FY2021 appropriation (including supplemental
appropriations from the Coronavirus Aid, Relief, and
Economic Security (CARES) Act (P.L. 116-136). Table 1
shows the FY2022 request and previously enacted amounts
for the MHS.
Defense Health Program (DHP)
The DHP, a sub-account under the O&M account, funds the
following MHS functions: health care delivery in MTFs;
TRICARE; certain medical readiness activities and
expeditionary medical capabilities; education and training
programs; research, development, test, and evaluation
(RDT&E); management and headquarters activities;
facilities sustainment; procurement; and civilian and
contract personnel. The FY2022 request for the DHP
account is $35.6 billion, which is 4.4% ($1.5 billion) above
the appropriated amount for FY2021. Table 2 highlights
selected programs that DOD intends to create, maintain,
expand, reduce, or transfer to the military services.
Military Personnel (MILPERS)
Medical MILPERS funds military personnel operating the
MHS. This includes various pay and allowances, such as
basic, incentive, and special pays; subsistence for enlisted
personnel; permanent change of station travel; and
retirement contributions.

Table I. Military Health System        Funding, FY2018-FY2022 Request
($ in billions)
FY2018        FY2019         FY2020        FY2021        FY2022
Enacted       Enacted        Enacted       Enacted       Request
O&M (DHP)                                               $33.5          $34.4         $37.1         $34.1         $35.6
DHP Operation & Maintenance         $30.8          $31.3         $33.0         $31.1          $34.2
Research, Development, Testing, and Evaluation       $2.0           $2.2          $3.7          $2.4           $0.6
Procurement        $0.7          $0.9          $0.5           $0.5          $0.8
MILPERS                                                  $8.6          $8.4           $8.9          $8.3          $8.5
MILCON                                                   $0.9          $0.4           $0.3          $0.5          $0.5
MERHCF Contributions                                     $8.1          $7.5           $7.8          $8.4          $9.3
Grand Total                                             $51.1          $50.7         $51.4         $51.3          $54.0
Sources: Department of Defense (DOD), Defense Budget Overview, May 2021, p. 5-5; DOD Defense Health Program Fiscal Year (FY) 2022 Budget
Estimates, May 2021, p. 1; DOD Defense Budget Overview, February 2020, p. 24; and DOD, Defense Health Program Fiscal Year (FY) 2020 Budget
Estimates, March 2019, p. DHP-13.
Notes: Numbers may not add up due to rounding. DHP sub-totals include MHS funding for overseas contingency operations (OCO) and direct war
costs. The FY2022 request does not include funding that Congress has added to the DHP in the past, such as unrequested medical research funding. The
FY2020 and FY2021 enacted amounts include supplemental funding appropriated from the CARES Act. O&M (DHP) refers to one of the overarching
DOD budget accounts, whereas DHP Operation & Maintenance refers to a subordinate budget activity. The Medicare-Eligible Retiree Health Care Fund
(MERHCF) refers to the accrual contributions that pay for future health care expenses of Medicare-eligible TRICARE beneficiaries.

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