A Battle Is Brewing Over the Rising Costs of VA Health Care

A Battle Is Brewing Over the Rising Costs of VA Health Care
VA Secretary Denis McDonough visits the Washington DC VA Medical Center shortly after taking office. (VA photo)

Unlike most federal agencies, each year the administration proposes a budget for the VA that covers not only the upcoming fiscal year operations, but also additional funds for the following fiscal year.


The additional request is called an “advance appropriation.” In a nutshell, the additional funding is to serve as a bridge between fiscal years to ensure the department can provide continuity of the health care and benefits to veterans, their families, caregivers, and survivors without disruption should unforeseen circumstances prevent Congress from getting a VA budget signed into law before the Oct. 1 start of a new fiscal year.


In recent years, government shutdowns and continuing resolutions prompted Congress to establish advance appropriations as safeguard protections for seven VA accounts. VA medical services, community care, and other medical programs have been receiving advance funding since October 2009 with the enactment of the Veterans Health Care Budget Reform and Transparency Act. Advance appropriations for other VA benefit programs became law a few years later. 


What Is in This Year’s VA’s Budget Request?

The VA is one of few federal agencies to see significant growth in its budget over the last decade. From 2012 to 2021, total VA funding grew from about $197 billion to over $245 billion.


[RELATED: Inside the Biden Budget: Details on Pay Raise, TRICARE Fees, and More]


What makes this year’s FY 2022 budget request different from previous years? The proposal brings a level of complexity and includes multiple funding sources the department expects to draw from. This makes the administration’s request unique, but also a little more challenging to understand.


This year, the VA is requesting $269.9 billion for FY 2022, or a 10% increase over last year. Within the total resides two main funding accounts:

  • Discretionary spending, which includes $117.2 billion to support health care, benefits, and national cemetery programs – a 9% increase over 2021. Medical care receives 86% of this funding in the FY 2022.
  • Mandatory spending of $152.7 billion to support benefit programs – a 10.8% increase over 2021. This funding pays for compensation and pension, readjustment, housing, and insurance programs.


Secretary Denis McDonough’s vision for this year’s budget request centers on three core responsibilities of the department:

  1. Providing veterans with timely, world-class health care.
  2. Ensuring veterans and their families have timely access to their benefits.
  3. Honoring veterans with their final resting place and lasting tributes to their service.


[RELATED: VA Will Soon Begin Processing Claims for 3 New Agent Orange Illnesses]


Additional Funding Sources 

Both discretionary and mandatory accounts include five additional sources of funding to help boost and supplement the budget request, and aim to address the rising need for health care, services, and benefits among beneficiaries:

  • The CARES Act. The Coronavirus Aid, Relief and Economic Security Act was signed into law in March 2020 and provided the VA with funding to care for veterans and strengthen its response to the COVID-19 pandemic. The department has obligated 75% of the $19.6 billion to date.

  • The American Rescue Plan. The president signed this relief package in March 2021. In part, it’s designed to sustain the VA’s COVID-19 response efforts beyond the expiration of the CARES Act. The plan provided the VA with over $17 billion to help reduce the backlog of veteran benefit claims and appeals, meet additional medical care and health needs including assistance to state veterans homes, and help train veterans who lost their jobs because of the pandemic to find work in high demand occupations.

  • The American Jobs Plan and the American Families Plan. The administration recently put forth these plans, which include funds to modernize the VA and improve infrastructure; provide support to a growing population of women and younger veterans; enhance education and employment programs; and support about 136,000 veteran and family interments in the VA national cemetery system, including maintaining 4 million gravesites and innovative efforts to memorialize those who served.

  • The VA Transformational Fund. This new, recurring expense account allows the VA to use expired unobligated discretionary funding to supplement its budget and apply these resources toward improving facility infrastructure and information technology.


VA Health Care

“The funding request invests in the core foundations of our country’s strength and advances key VA priorities,” McDonough said. “The discretionary request ensures that all our veterans, including women veterans, women of color, and LGBTQ+ veterans, receive the care they have earned and enable then to create civilian lives of meaning and opportunity.”


[RELATED: VA Moves to Expedite Benefits for Post-9/11 Veterans’ Asthma, Respiratory Problems]


In addition to the VA’s focus on defeating the COVID-19 pandemic, here are a few of the many health care system outcomes and programs the increased funding supports:

  • Providing care to 7 million veteran patients.
  • Covering the costs of 119 million outpatient visits.
  • Continuing investment in VA’s electronic health record modernization.
  • Improving facility infrastructure and operation and maintenance accounts for approximately 5,625 buildings and 1,690 leases the VA operates.
  • Increasing case management services to help more veterans gain permanent housing through vouchers and prevent homelessness among low-income veteran families.
  • Expanding suicide prevention outreach programs, including the Veterans Crisis Line to help veterans at risk for suicide and provide interventions before a veteran is in crisis.
  • Strengthening VA’s diversity programs to ensure the department is welcoming to all, including women veterans, veterans of color, and veterans who are LGBTQ+. A new Office of Resolution Management, Diversity and Inclusion has been established to strengthen VA’s diversity program.
  • Expanding VA caregiver support program services, including the phased expansion of the Program of Comprehensive Assistance for Family Caregivers included in the MISSION Act. Once fully implemented, this program will provide eligible caregivers of pre-9/11 veterans additional services and a monthly stipend for caregiving.
  • Providing more than $115 billion in advance appropriations for FY 2023 to ensure continuity of health care services into the new fiscal year.


The Road Ahead

VA’s budget proposal is a strong indicator of the administration’s and the secretary’s commitment to serving veterans.


However, some members of Congress are ready to take the VA to task to find out how the department has spent its appropriations in recent years. A battle is brewing around the unsustainable trajectory and rising costs of health care and what to do about it. According to the VA, a significant factor in the rising costs of health care is because of community care in recent years, particularly with the implementation of the MISSION Act.    


The budget increases appear reassuring but the details of how the VA plans to execute the various elements of its health care budget remain elusive, including its community care account. Such details are important for ensuring the department is funded at the necessary levels, so veterans have uninterrupted care and the best health outcomes possible. Rest assured lawmakers will delve more deeply into the VA’s budget proposal during hearings in the coming weeks as part of the congressional appropriations process.


Meanwhile, MOAA remains engaged in the process and will do all we can to work with the secretary and the Congress to ensure the final passage of an appropriations bill that meets the needs of veterans and honors them for their service.


MOAA Looks Out For You

MOAA is committed to protecting the rights of servicemembers and their families. Lend your voice and support these efforts today. Because the larger our voice is, the greater our impact will be.


About the Author

Cmdr. René Campos, USN (Ret)
Cmdr. René Campos, USN (Ret)

Campos currently serves as MOAA's Senior Director of Government Relations, managing matters related to military and veterans’ health care, wounded, ill and injured, and caregiver policy.