July 10, 2014
By expanding for two years the ability of the Department of Veterans Affairs (VA) to pay for health care services provided to veterans, authorizing VA to hire additional staff and enter into long-term leases for certain major medical facilities, and expanding eligibility for certain educational benefits, H.R. 3230 would result in additional direct spending totaling $35 billion over fiscal years 2014-2024, CBO estimates.
Implementing H.R. 3230 also would increase federal revenues by $2.5 billion and increase discretionary spending by $1.8 billion (subject to future appropriation action) over the same period, CBO estimates. (The estimated budgetary effects of H.R. 3230 are detailed in the attached table.) Other than costs of about $1 billion for additional hiring and training of health care staff, those estimates do not include added costs for increased utilization of the VA health care system after October 2017, when the expanded authority provided by the act to contract with non-VA health care providers would expire.
Most of the budgetary costs of this act would stem from implementing title III, which would expand VA’s ability to pay for health care services provided to veterans. That title would have effects on direct spending and revenues that would increase budget deficits by a total of about $30 billion over the 2014-2017 period; it would also result in additional offsetting collections and lead to future appropriations that would, on net, increase discretionary outlays by an estimated $0.7 billion from 2016 through 2018.
For fiscal years 2014-2016, title VIII would authorize and appropriate such sums as may be necessary to carry out this act. Thus, all spending under the act in those years would be direct spending. Under the legislation, the spending would be classified as an emergency requirement for the purpose of enforcing certain budgetary rules.
For this estimate, CBO assumes that H.R. 3230 will be enacted early in August 2014.