Here's How VA Calculated the Cost of C-123 Veterans' Agent Orange Benefits

It sounded like a lot but is such a paltry sum: $47 million to address the needs of 2100 or so C-123 veterans. It works out to something under $200 per month per veteran, assuming the wonderful gift of living another ten years.

VA's C-123 press release didn't stress the money issue but many news reports sure did. "Veterans in Line for Millions in Compensation" being the basic theme. But do the math: 2100 veterans dividing $47 million by ten years and then by twelve months is only $186 per month.

So it should be clear to all this struggle wasn't and isn't about the money. It was to get our folks VA medical care and other benefits vital for quality of live and extension of life, and once VA begins processing our exposure claims we'll finally be inside the system.

VA presented a detailed explanation of how it came up with the $47 million price tag for their C-123 response. Some of it makes sense, but much is obscure, such as survivors' benefits and medical care itself. Still, their best effort was made.

We disagree. Using the statistics developed by the Kennedy School of Government for current conflicts, that price tag per veteran is much higher.

Here's how the government calculated our 2100 veterans, assuming about 320 apply for benefits:

Impact Analysis for RIN 2900-AP43

Title of Regulation: Presumption of Herbicide Exposure and Presumption of Disability During Service For Reservists Presumed Exposed to Herbicide

Purpose:  To determine the economic impact of this rulemaking.

The Need for the Regulatory Action:  The Department of Veterans Affairs (VA) is amending its regulation governing individuals presumed to certain herbicides.  Specifically, VA is expanding the regulation to include an additional group consisting of individuals who performed service in the Air Force or Air Force Reserve under circumstances in which they had regular and repeated contact with C-123 aircraft known to have been used to spray an herbicide agent (“Agent Orange”) during the Vietnam era.  In addition, the regulation will establish a presumption that members of this group who later develop an Agent Orange presumptive condition were disabled during the relevant period of service, thus establishing that this service constituted “active, naval, military or air service.”  The effect of this action is to presume herbicide exposure for these individuals and to allow individuals who were exposed to herbicides during reserve service to establish veteran status for VA purposes and eligibility for some VA benefits.  The need for this action results from a recent decision by the Secretary of Veterans Affairs to acknowledge that individuals who had regular and repeated exposure to C-123 aircraft that the United States Air Force used to spray the herbicides in Vietnam during Operation Ranch Hand were exposed to Agent Orange.

Estimated Impact:  Estimated Mandatory Cost. Benefit costs are estimated to be $3.8 million during the first year, $21.0 million for five years, and $47.5 million over ten years.  Benefit costs are estimated to be $3.8 million during the first year, $21.0 million for five years, and $47.5 million over ten years. 

	Veterans		Survivors		Total
Fiscal Year	Caseload	Obligations (000's)	Caseload	Obligations (000's)	Caseload	Obligations (000's)
2016	342	$3,822	0	$0	342	$3,822
2017	347	$3,952	3	$52	350	$4,004
2018	351	$4,086	6	$108	357	$4,194
2019	354	$4,215	10	$187	364	$4,402
2020	357	$4,349	14	$270	371	$4,619
5 Year Total		$20,424		$617		$21,041
2021	359	$4,474	18	$359	377	$4,832
2022	360	$4,589	23	$474	383	$5,063
2023	361	$4,708	28	$596	389	$5,304
2024	361	$4,816	32	$704	393	$5,520
2025	360	$4,913	37	$841	397	$5,755
10 Year Total		$43,925		$3,591		$47,516

Administrative Costs. There are insignificant FTE or GOE cost requirements associated with this proposal.

Assumptions and Methodology of the Analysis:

Veterans.  Data from the Office of Performance, Analysis, and Integrity (PA&I) indicates that 2,783,690 Veterans served in Vietnam, of which there are 453,782, or 16.3 percent, living Veterans with Agent Orange-related disabilities.  Based on the IOM study, up to 2,100 Air Force Reserve personnel trained and worked on C-123 aircraft and were potentially exposed to Agent Orange.  Assuming that 16.3 percent of these Reservists have Agent Orange-related disabilities results in an estimated 342 Reservists that would be eligible to receive disability benefits for Agent Orange presumptive disabilities under this proposal.  Mortality rates were applied to these 342 Reservists to estimate caseload in the out-years.

Data from PA&I also indicates that the 453,782 living Veterans with Agent Orange-related disabilities have, on average, approximately 1.5 Agent Orange presumptive disabilities.  The data also shows that the average rating for an Agent Orange disability is 36 percent.  Assuming that each Veteran has 1.5 Agent Orange-related disabilities at an average of 36 percent leads to an average combined degree of disability of approximately 50 percent for Agent Orange-related disabilities.  Estimated payments at the 50-percent level and annual cost-of-living adjustments from the 2016 President’s Budget were applied to the caseload to calculate annual obligations.

For purposes of this cost estimate, VBA assumes that these 342 Reservists would be granted Veteran status and begin receiving compensation in 2016 for their Agent Orange-related disabilities.  While some of these reservists may already be on the compensation rolls for service-connected disabilities associated with separate periods of active duty service, data is not available to identify these Veterans.  Therefore, for this cost estimate, VBA also assumes that these Veterans would be new to the rolls in 2016.

In addition to the Reservists that currently have Agent Orange-related disabilities, there are Reservists that do not currently have these conditions, but will develop them over the remainder of their lifetime.  While data is not available to predict if and when these Reservists will develop Agent Orange-related disabilities, for purposes of this cost estimate, VBA assumes that there will be 10 new Veteran accessions per year through 2025.  This is based on a straight line average number of cases per year since 1982 (i.e. an estimated 342 cases in 33 years since 1982).  Obligations for these Veterans are also calculated by applying the 50-percent payment rate beginning in the year of accession.

Survivors.  The caseload for survivor compensation is associated with the number of service-connected Veterans’ deaths.  VBA assumes, based on marriage statistics from the Census Bureau, that 50 percent of Veterans will have a surviving spouse.  For purposes of this cost estimate, VBA assumes that a survivor will access the rolls at the beginning of the year following the Veteran’s death and will receive the estimated average survivor compensation benefit from the FY 2016 President’s Budget.  Mortality rates were also applied to survivors to calculate caseload in the out-years