H.R. 1578, Veterans Claims Education Act of 2025

Bill Summary

H.R. 1578 would require the Department of Veterans Affairs (VA) to inform veterans and their survivors about accredited individuals and organizations that may be able to help them with claims for VA benefits. The bill also would extend the reduction of pension payments for veterans and survivors who reside in Medicaid nursing homes.

Estimated Federal Cost

The estimated budgetary effect of H.R. 1578 is 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. 1578 will be enacted in fiscal year 2025 and that outlays will follow historical spending patterns for affected programs.

Provisions that Affect Spending Subject to Appropriation and Direct Spending

Section 2 would require VA to provide additional information about VA-accredited individuals and organizations. Specifically, VA must:

• Maintain an online tool that allows people claiming VA benefits to search for accredited representatives that may assist with those claims;
• Notify applicants for VA benefits about VA-accredited representation if the claimant’s initial application does not indicate they have such representation; and
• On each web page of the department through which an individual may file a benefits claim, provide information about limitations on fees that potential representatives may charge applicants.

The department maintains a web portal through which claimants can search for accredited representation for benefit claims. Thus, that requirement would have no budgetary effect. Using information from the department, CBO estimates that VA would require additional information technology (IT) resources to notify claimants of available representation and to update each affected website with information on fee limitations. On the basis of that information, CBO estimates that upgrades and maintenance to the IT system would cost $15 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 $11 million and direct spending by $4 million.

Direct Spending

In addition to expanding benefits that would partly be covered by the TEF, CBO estimates that enacting the bill would affect direct spending by reducing pension payments to veterans and survivors who reside in Medicaid nursing homes. In total, the bill would decrease net direct spending by $12 million over the 2025‑2035 period

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 would extend that reduction for four months, through March 31, 2032. CBO estimates that extending that requirement would reduce VA benefits by $10 million per month. (Those benefits are paid from mandatory appropriations and are therefore considered direct spending.) 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 $16 million over the 2025-2035 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 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. 1578 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. 1578 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.

Federal Costs: Logan Smith

Mandates: Lucy Marret

Estimate Reviewed By

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

Christina Hawley Anthony
Deputy Director of Budget Analysis