The Defense Department proposed splitting military health funding into two accounts in its fiscal 2027 budget request, saying the change would better protect money for military medical care and improve oversight.
Under the plan, a Combat Operational and Medical Readiness account would fund care and medical readiness for active-duty troops and support military treatment facilities. A separate Private Sector Care Program account would cover Tricare and other care not available at military hospitals, according to budget documents.
The department said the new structure would keep costs in one program from affecting the other. During an April 21 Pentagon budget briefing, Space Force Lt. Gen. Steven Whitney said, “By splitting out the cost of private sector care into its own account, the department is enhancing transparency and accountability, making it easier to track how resources are balanced between military medical platforms and the care through our civilian partners.”
The proposal follows years of changes to the military health system. Reforms that began in 2017 shifted administrative oversight of military hospitals and clinics to the Defense Health Agency and were intended to reduce duplication, focus medical staffing on active-duty personnel, and move more nonmilitary patients to private care.
Service leaders and some lawmakers have said access to care has worsened.
At a February congressional hearing, Chief Master Sgt. of the Air Force David Wolfe said, “What we’ve all seen over the length of our careers is a gradual erosion in the availability of that healthcare for our service members and their families.”
In late 2024, former Deputy Defense Secretary Kathleen Hicks proposed bringing back at least 7% of beneficiaries who use Tricare to military hospitals and clinics by the end of 2026, saying some parts of the overhaul had left military treatment facilities “chronically understaffed.”
Congress is currently drafting the fiscal 2027 Defense Appropriations Act.