QDR (II): Health Care Costs Hamper Gates Reforms

Recognizing that the resource spigot will be closing, the Quadrennial Defense Review (QDR) organized a special cost group to find ways of saving money. This group has identified runaway health care costs as a critical issue. During the Bush years (2001-2008), military health care costs rose 144 percent, faster than in the general economy. One reason is low premiums and co-pays. Another is the expansion of benefits to reservists called to active duty and their families. A third reason is the recognition that many Iraq and Afghanistan veterans have been suffering from unrecognized maladies such as traumatic brain injury. According to a senior OSD official, over the past few years, a quarter million people have given up their private insurance and shifted to military health care. Given its decision to increase the size of the Army and Marine Corps, the Department of Defense is facing a tidal wave of health care costs that threaten to crowd out other necessary investments. The Pentagon’s experience can also inform the current national debate on health care reform.