Veterans' Medical Care Appropriations and Funding Process

Publication Date: December 2004

Publisher: Library of Congress. Congressional Research Service

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Research Area: Military and defense

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Abstract:

The Department of Veterans Affairs (VA) provides benefits to veterans who meet certain eligibility rules. Benefits to veterans range from disability compensation and pensions to hospital and medical care. VA provides these benefits to veterans through three major operating units: the Veterans Health Administration (VHA), the Veterans Benefits Administration (VBA) and the National Cemetery Administration (NCA). VHA is primarily a direct service provider of primary care, specialized care, and related medical and social support services to veterans through an integrated health care system. Veterans are enrolled in priority groups that determine payments for service and nonservice-connected medical conditions. In FY2004, Congress appropriated $28.4 billion for VHA to be spent through an account structure composed of four new accounts: medical services, medical administration, medical facilities, and medical and prosthetic research.

For FY2005, the Administration submitted its budget request to Congress using a new account structure that consolidated several accounts into two "business lines": medical care, and medical and prosthetic research. The Administration requested $29.1 billion for VHA for FY2005.

On September 9, 2004, the House Committee on Appropriations reported the FY2005 appropriations bill for the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies for FY2005 (H.R. 5041) (H.Rept. 108-674). The Committee rejected the alternative appropriations structure recommended by the Administration and recommended $30.3 billion for VA medical programs for FY2005. This is an increase of $1.2 billion over the President's request and $1.9 billion over FY2004. On September 21, 2004, the Senate Committee on Appropriations reported its version of the FY2005 VA-HUD appropriations bill, S. 2825 (S.Rept. 108-353). Under S. 2825, as reported, VHA would have received $30.4 billion in FY2005. This is a $2 billion increase from FY2004, and $1.2 billion more than the President's request. On November 20, 2004, both the House and Senate adopted the conference agreement to accompany the Consolidated Appropriations Act, 2005 (H.R. 4818, P.L. 108-447). The bill was signed into law on December 8, 2004. Under P.L.108-447, VHA would receive $30.3 billion in FY2005 -- an increase of $1.2 billion over the FY2005 appropriation request, and $1.9 billion over FY2004.

In its budget submission to Congress, the Administration also proposed several legislative and regulatory changes to increase certain copayments and other costsharing charges for lower-priority veterans and to reduce copays for certain veterans. The House and Senate Committees on Appropriations, and the final conference agreement did not accept any of the Administration's cost-sharing proposals for VHA. This report will be updated as legislative and budgetary activity occurs.