H.R. 3400, the Territorial Response and Access to Veterans’ Essential Lifecare Act

Bill Summary

H.R. 3400 would authorize the Department of Veterans Affairs (VA) to assign physicians to serve as traveling doctors to veterans in U.S. territories. The bill would require VA to provide relocation or retention bonuses to those traveling physicians. Finally, the bill would extend a temporary limitation on certain pension payments through December 31, 2032.

Estimated Federal Cost

The estimated budgetary effects of H.R. 3400 are shown in Table 1. The costs of the legislation fall within budget functions 550 (health) and 700 (veterans benefits and services).

Basis of Estimate

For this estimate, CBO assumes that H.R. 3400 will be enacted near the beginning of fiscal year 2026 and that outlays will follow historical spending patterns for affected programs.

Provisions that Affect Spending Subject to Appropriation and Direct Spending

Section 2 of H.R. 3400 would allow VA to assign department physicians to serve as traveling doctors to veterans in U.S. territories. Using information from studies on the number of patients a physician can serve and the number of veterans who live in U.S. territories, CBO estimates that about 50 doctors would be assigned to serve as traveling physicians.

Under the bill, VA would be required to provide relocation or retention bonuses to physicians assigned under the program. Under current law, VA is authorized to provide relocation and retention bonuses of up to 25 percent of a physician’s annual salary.CBO estimates that the cost of providing bonuses of that magnitude would average roughly $56,000 per physician per year. In total, CBO estimates that implementing section 2 would cost $28 million over the 2025-2035 period.

CBO expects that some of the costs of implementing the bill would be paid from the Toxic Exposures Fund (TEF) established by Public Law 117-168, the Honoring our PACT Act. The TEF is a mandatory appropriation that VA uses to pay for health care, disability claims processing, medical research, and IT modernization that benefit veterans who were exposed to environmental hazards.

Additional spending from the TEF would occur if legislation increases the costs of similar activities that benefit veterans with such exposure. Thus, in addition to increasing spending subject to appropriation, enacting section 2 would increase amounts paid from the TEF, which are classified as direct spending. CBO projects that the proportion of costs paid by the TEF will grow over time based on the amount of formerly discretionary appropriations that CBO expects will be provided through the mandatory appropriation as specified in the Honoring our PACT Act.[1]

CBO estimates that over the 2025-2035 period, implementing section 2 would increase spending subject to appropriation by $20 million and direct spending by $8 million.

Direct Spending

In addition to expanding benefits that would partly be covered by the TEF, enacting H.R. 3400 would affect direct spending by extending a statutory limitation on VA pension payments. In total, enacting the bill would decrease net direct spending by $44 million over the 2025-2035 period (see Table 2).

Under current law, VA reduces pension payments to veterans and survivors who reside in Medicaid nursing homes to $90 per month. That required reduction expires November 30, 2031. Section 3 of H.R. 3400 would extend that reduction for 13 months, through December 31, 2032. CBO estimates that extending that requirement would reduce VA benefits by $10 million per month. As a result of that reduction in beneficiaries’ income, Medicaid would pay more of the cost of their care, increasing spending for that program by $6 million per month. Thus, enacting section 3 would reduce net direct spending by $52 million over the 2025-2035 period.

Spending Subject to Appropriation

The discussion above in “Provisions that Affect Spending Subject to Appropriation and Direct Spending” describes the costs of providing relocation or retention bonuses to department physicians assigned to U.S. territories. Providing those bonuses would increase spending subject to appropriation by $20 million over the 2025-2035 period, CBO estimates.

Pay-As-You-Go Considerations

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. The net changes in outlays that are subject to those pay-as-you-go procedures are shown in Table 1.

Increase in Long-Term Net Direct Spending and Deficits

CBO estimates that enacting H.R. 3400 would not increase net direct spending by more than $2.5 billion in any of the four consecutive 10-year periods beginning in 2036.

CBO estimates that enacting H.R. 3400 would not increase on‑budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2036.

Mandates

The bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.

Estimate Prepared By

Federal Costs:

Noah Callahan (for veterans’ health care) 
Logan Smith (for pensions and Medicaid)

Mandates: Brandon Lever

Estimate Reviewed By

David Newman
Chief, Defense, International Affairs, and Veterans’ Affairs Cost Estimates Unit

Kathleen FitzGerald 
Chief, Public and Private Mandates Unit

Christina Hawley Anthony
Deputy Director of Budget Analysis

Estimate Approved By