Letter to the Honorable Jeff Sessions regarding the conference agreement on H.R. 3230, as reported on July 28, 2014
More detail about the cost estimate that CBO prepared on July 29, 2014, for the conference agreement on H.R. 3230, the Veterans Access, Choice, and Accountability Act of 2014, as reported on July 28, 2014. That act would appropriate $15 billion to increase veterans’ access to health care by expanding the use of care provided by entities other than the Department of Veterans Affairs (VA); to improve the department's infrastructure; to hire medical staff; and to extend the Health Professionals Educational Assistance Program. The act would also authorize VA to enter into a number of leases for medical facilities and would modify a number of veterans’ benefits programs.
The following are the provisions of the legislation that would affect direct spending (see enclosed table for estimated budgetary effects by provision):
Title I- Improvement of Access to Care from Non-Department of Veterans Affairs Providers. Title I would expand VA’s ability to pay for health care services provided to currently enrolled veterans and newly separated combat veterans. Section 802 would appropriate a specific amount—$10 billion—for that purpose, which would result in direct spending of $10 billion over the 2014-2019 period. The authority to provide expanded care would expire when the appropriated funds were expended, which CBO estimates would be early in fiscal year 2016.
By CBO’s estimate, title I would result in a reduction of $1.7 billion in spending for Medicare and Medicaid (because VA would be paying for some health care services that would have been financed by those programs); additional collections of $200 million in copayments that would be considered savings in direct spending; and a loss of about $80 million in tax revenues (because, with some costs covered by VA, some veterans’ use of health care covered by employer-sponsored health insurance would increase).
This version of the legislation differs in a number of ways from the Senate-passed version:
All of those differences would reduce the government’s costs relative to those under the Senate-passed legislation—particularly the fixed dollar amount of the additional funding that would be available to VA.
Title III- Health Care Staffing, Recruitment, and Training Matters. Title III would allow VA to hire health care providers using an expedited process and would extend the scholarship program for health professionals at VA. Section 801 of this act would appropriate $5 billion to hire medical staff for VA, to extend certain scholarship programs, and to improve VA infrastructure.
CBO estimated the spending of the appropriated funds based on the current spending patterns for those activities. Similar provisions were included in sections 201 and 202 of the Senate-passed version of H.R. 3230, although specific appropriations were not provided for those activities.
Title VI- Major Medical Facility Leases. Title VI would authorize VA to enter into leases to obtain the use of major medical facilities at 27 specified locations. Similar provisions were included in sections 601 and 602 of the Senate-passed version of H.R. 3230.
Based on VA’s long-established practice, CBO expects that the department would implement that authorization by awarding contracts for the construction and long-term use of those facilities without recording the full amount of the government’s commitment as an obligation of its appropriated funds. Thus, title VI would effectively be providing budget authority for an amount of obligations that exceeds what we expect VA initially would charge against its appropriation. By CBO’s estimate, that additional budget authority would amount to almost $1.3 billion in 2017 and the resulting direct spending would amount to about $1.3 billion over the 2017-2024 period.
Title VII- Other Veterans Matters. Title VII would expand education benefits for veterans and extend several provisions that reduce spending for veterans’ pensions and home loans.
Some of those provisions were included in sections 701 and 702 of the Senate-passed version of H.R. 3230.
In addition, some sections of the bill would affect spending subject to appropriations; those amounts are detailed in Table 2 of CBO’s cost estimate issued on July 29, 2014. CBO estimates that, taken together, those provisions would reduce discretionary spending by $36 million over the 2015-2019 period.
This legislation would lead to increased enrollment in VA’s health care system and increased utilization of health care services provided by, or financed by, VA in 2015 and 2016. If this program was extended through the remainder of 2016 and into future years, CBO expects that over time veterans would choose to rely on VA for an increasing portion of their health care. CBO has not estimated the additional costs to VA that might result.