Discretionary Spending

Function 700 - Veterans' Benefits and Services

End Enrollment in VA Medical Care for Veterans in Priority Groups 7 and 8

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

Billions of Dollars 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2023–
Change in Planned Defense Spending  
  Budget authority 0 -11 -12 -12 -12 -12 -13 -13 -14 -14 -57 -124
  Outlays 0 -11 -11 -12 -12 -12 -13 -13 -14 -14 -56 -121
Change in Mandatory Outlays 0 3 4 4 4 4 4 4 4 4 18 40

This option would take effect in October 2023.

These estimates do not reflect the effects of the Honoring Our PACT Act (Public Law 117-168). That law will decrease the number of veterans who are enrolled in priority groups 7 and 8 and, therefore, will reduce the estimated savings from this option.

The Department of Veterans Affairs (VA) provides a wide range of medical services at little to no charge to enrolled veterans, including inpatient and outpatient care, prescription coverage, and assistive devices (such as hearing aids and prosthetics). Veterans who seek medical care from VA are assigned to one of eight priority groups on the basis of disability status and income, among other factors. Veterans in priority group 7 do not have compensable service-connected disabilities, and their annual income is above a national threshold set by VA (about $35,000 for a household of one in 2021) but below a geographically adjusted threshold (which is generally higher than the national one). Those in priority group 8 do not have compensable service-connected disabilities, and their income is above both the national and the geographic thresholds. In 2021, about 2 million veterans were enrolled in priority groups 7 and 8.

Because of budgetary constraints, VA ended enrollment of veterans in priority group 8 in 2003. Veterans who were enrolled at that time were allowed to remain in VA's health care system. Since then, enrollment in that group has been reopened to certain veterans.

This option would end enrollment in VA's health care system for all veterans in priority groups 7 and 8: No new enrollees would be accepted, and current enrollees would be disenrolled starting in October 2023. Some of those veterans would be eligible for Medicare and would shift their health care from VA to Medicare, increasing mandatory spending.