What the nation owes each year to veterans who are disabled during service has more than doubled since 2000, rising from $14.8 billion to $39.4 billion in 2011, according to the Department of Veterans Affairs.
The toll of wars in Iraq and Afghanistan, where troops served repeatedly in combat zones, is a key contributor to escalating costs of individual disability payouts, says Allison Hickey, VA undersecretary for benefits.
"I would point first and foremost to multiple deployments," says Hickey, a retired Air Force brigadier general. "I would call it unprecedented demand."
The 3.4 million men and women disabled during their service - some of them having served in World War II - are about 15% of the nation's 22.2 million veterans.
The disabled veteran population has increased 45% since 2000 and may grow sharply with a new generation who seek compensation for more ailments and are savvier than their elders about their VA rights, say Hickey and veterans advocates.
"We get veterans coming in to us all the time, World War II guys or Korea (War) guys, that never filed a claim because they think they didn't deserve it," says Garry Augustine, national service director for Disabled American Veterans.
Augustine, a Vietnam veteran, said his generation was provided little more than their separation papers when they left the service. For the past two decades, however, the VA has offered instruction about benefits to soon-to-be-separating servicemembers. Legislative changes have made such sessions mandatory.
By November, nearly half of veterans who served during the Iraq and Afghanistan wars had filed claims seeking disability compensation, VA data show.
The average number of conditions compensated for each veteran has grown from 2.3 for the World War II generation to 3.5 for those from the Vietnam War to six for Iraq and Afghanistan veterans, the VA says.
About one in seven disabled veterans were rated more than 70% disabled in 2000; today, that ratio is more than one in four, data show. Average annual payouts per veteran have risen to $11,737 in 2011 - an increase of nearly 40% after adjusting for inflation.
Among the most common ailments of the current generation are worn-out joints, ligaments and discs in their backs and legs, much of that from carrying body armor, Hickey says. "When you're wearing it all day long, walking up and down the roads of Fallujah, Baghdad and now Kabul, that has a wear-and-tear effect."
The number and complexity of disability claims has added to a backlog of pending cases, where 70% have been waiting longer than four months for the VA, Hickey says.
Other reasons for rising costs:
•Vietnam veterans exposed to Agent Orange or veterans diagnosed with Gulf War syndrome can be compensated for more ailments.
•WWII veterans' service-related disabilities worsen with age, making them eligible for additional compensation.
•A change in rules associated with post-traumatic stress disorder make it easier for diagnosed patients to prove the need for compensation.
By Gregg Zoroya and Meghan Hoyer