S. 1868, Critical Access for Veterans Care Act

Bill Summary

S. 1868 would require the Department of Veterans Affairs (VA) to temporarily allow veterans in certain states to receive outpatient care from critical access hospitals and affiliated rural health clinics. That requirement would expire after five years. The pilot program would be open to qualified facilities in states that are designated by the Centers for Medicare & Medicaid Services as “frontier states”, which include Alaska, Montana, Nevada, North Dakota, and Wyoming. The bill also would require VA to communicate with veterans and health care providers in rural areas and to report annually to the Congress.

Estimated Federal Cost

The estimated budgetary effects of S. 1868 are shown in Table 1. The costs of the legislation fall within budget function 700 (veterans benefits and services).

Basis of Estimate

For this estimate, CBO assumes that S. 1868 will be enacted in fiscal year 2026, that VA will begin paying for health care at participating facilities in fiscal year 2027, and that outlays will follow historical spending patterns for affected programs.

Provisions That Affect Direct Spending and Spending Subject to Appropriation

S. 1868 would require VA to pay for veterans residing in frontier states to receive outpatient care from critical access hospitals and affiliated rural health clinics. The bill also would require VA to communicate with eligible veterans and providers, and to administer the program.

According to VA, approximately 60,000 enrolled veterans would be eligible to participate in the pilot program because they live within 35 miles of a critical access hospital in a frontier state and are eligible for community care. The required pilot program would expire after five years. Using information from the department, CBO estimates that providing health care at facilities in frontier states would cost $492 million over the 2027–2036 period.

Additionally, the bill would require VA to annually communicate with veterans in rural areas regarding the health care options that are available to them through the department. The department also would be required to communicate with health care providers in rural areas regarding participation in the Veterans Community Care Program. Those requirements would extend beyond the five-year pilot program. Using information on the costs of similar outreach efforts, CBO estimates that satisfying those requirements would increase VA's workload by the equivalent of two full-time employees. Annual compensation, benefits, and operating expenses would average about $170,000 per employee. CBO estimates that implementing those administrative requirements would cost $3 million over the 2026–2036 period.

In total, providing health care to eligible veterans in rural areas and satisfying the bill’s outreach and reporting requirements would cost $495 million over the 2026-2036 period.

VA uses several appropriation accounts to pay for the costs of health care, disability claims processing, medical research, and information technology modernization. One of those accounts, the Toxic Exposures Fund (TEF), is a mandatory appropriation that can be used to pay for some of the costs of those activities if they support veterans who were exposed to toxic substances or environmental hazards.^[1] The other accounts are discretionary appropriations. S. 1868 would affect health care that benefits veterans with and without toxic exposures; therefore, enacting the bill would increase direct spending from the TEF as well as spending subject to appropriation. CBO allocates the estimated costs of legislation between the TEF and the discretionary appropriation accounts on the basis of the portion of all funding for those activities that are projected, in CBO’s baseline, to come from the TEF.

On that basis, CBO estimates that over the 2026–2036 period, implementing the pilot program and the related outreach, and care coordination requirements under S. 1868 would increase direct spending by $177 million and spending subject to appropriation by $318 million.

Spending Subject to Appropriation

In addition to requiring VA to coordinate care under the pilot program and conduct outreach to eligible veterans and providers, S. 1868 would require the department to submit annual reports to the Congress for five years on its implementation of the bill. Based on the costs of similar reporting requirements, CBO estimates that preparing those reports would cost less than $500,000 over the 2026-2031 period.

In total, CBO estimates that implementing S. 1868 would increase spending subject to appropriation by $318 million over the 2026–2036 period.

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 direct spending 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 S. 1868 would not increase net direct spending by more than $2.5 billion in any of the four consecutive 10-year periods beginning in 2037.

CBO estimates that enacting S. 1868 would not increase on‑budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2037.

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) 
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