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 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2025– | 2025– | |
Change in discretionary spending | |||||||||||||
Budget authority | 0 | -8.9 | -8.8 | -7.5 | -7.4 | -6.1 | -6.0 | -5.4 | -5.3 | -5.2 | -32.6 | -60.6 | |
Outlays | 0 | -8.1 | -8.7 | -7.5 | -7.4 | -6.2 | -6.0 | -5.4 | -5.3 | -5.2 | -31.7 | -59.8 | |
Change in mandatory outlays | 0 | 4.1 | 4.1 | 3.5 | 3.5 | 2.9 | 2.9 | 2.6 | 2.6 | 2.6 | 15.2 | 28.8 | |
This option would take effect in October 2026.
The Department of Veterans Affairs (VA) provides a wide range of medical services at little or no charge to enrolled veterans, including inpatient and outpatient care, prescription drug 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 but below a geographically adjusted one. The national threshold for a household of one in 2024 is about $40,000; the geographically adjusted threshold is generally higher than the national one. (Whether a veteran falls above or below a threshold is determined by their income in the previous year.) Veterans in priority group 8 do not have compensable service-connected disabilities, and their income is above both the national and the geographic thresholds. In 2023, about 1 million veterans who were enrolled in priority groups 7 and 8 used the VA health care system.
The number of veterans enrolled in those groups is expected to decrease over time, primarily because the Honoring Our PACT Act (Public Law 117-168) moved veterans deemed to have been exposed to toxic substances to higher priority groups. In addition, VA ended enrollment of veterans in priority group 8 in 2003, although 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 some 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 2026. Some of those veterans would be eligible for Medicare and would shift their health care from VA to Medicare, increasing mandatory spending.