Order Code RS22483
Updated June 3, 2008
Health Care for Dependents and Survivors
of Veterans
Sidath Viranga Panangala
Analyst in Veterans Policy
Domestic Social Policy Division
Susan Janeczko
Research Associate
Domestic Social Policy Division
Summary
The Civilian Health and Medical Program of the Department of Veterans Affairs
(CHAMPVA) is primarily a fee-for-service program that provides reimbursement for
most medical care for certain eligible dependents and survivors of veterans rated
permanently and totally disabled from a service-connected condition. This report
provides an overview of CHAMPVA and includes a series of questions and answers
about the program. The report will be updated as legislative or programmatic changes
warrant.
Overview
The Veterans Health Administration (VHA) of the Department of Veterans Affairs
(VA) provides health care services to veterans who meet certain eligibility requirements.
The VHA is primarily a direct service provider of primary care, specialized care, and
related medical and social support services to veterans though an integrated health care
system. In 1973, Congress established the Civilian Health and Medical Program of the
Department of Veterans Affairs (CHAMPVA) as a means of providing health care
services to dependents and survivors of certain veterans.1 As stated in the House report
accompanying P.L. 93-82:
“The nation has long recognized that the widow and children of a veteran who dies
of service-connected disease or injury or of a veteran who has a service-connected
total disability are in a special category and deserving of substantial compensation and
assistance in return for the sacrifice the family has made. This recognition has been
shown in title 38 programs which provide for death compensation benefits, home
1 Veterans Health Care Expansion Act of 1973 (P.L. 93-82).

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loans, and educational assistance benefits for wives, widows, and war orphans.
Failure to provide for the medical care of such individuals is an oversight which
should be corrected.”2
CHAMPVA primarily is a fee-for-service program that provides reimbursement for
most medical care for certain eligible dependents and survivors of veterans rated
permanently and totally disabled from a service-connected condition.3 CHAMPVA is a
cost-sharing program that reimburses providers and facilities a determined allowable
amount, minus patient co-pay and deductible. CHAMPVA was designed to provide
medical care in a manner similar to the care provided to certain eligible beneficiaries
under the Department of Defense (DOD) TRICARE program (see the description below).
The number of beneficiaries enrolled in CHAMPVA has grown over the years. From
FY2002 through the second quarter of FY2008, enrollment grew by 175% — from
112,403 to 308,700 beneficiaries (see Figure 1). The 2001 expansion of CHAMPVA
eligibility to certain individuals aged 65 years and older has contributed to the increase
in enrollment. Moreover, there has been an increase in enrollment of dependents and
spouses of certain Vietnam-era veterans with service-connected disabilities. This increase
in Vietnam-era CHAMPVA sponsorship has occurred as aging Vietnam-era veterans with
service-connected disabilities experience a worsening of symptoms and a change in
disability status. Once a veteran becomes VA-rated permanently and totally disabled for
a service-connected disability, the veteran’s spouse and dependents are then eligible to
enroll in CHAMPVA.
Figure 1. CHAMPVA-Enrolled Beneficiaries, FY2002-FY2008
) 350
nds
a 300
250
Thous
t (
n 200
e
llm 150
ro
n
E 100
FY02
FY03
FY04
FY05
FY06
FY07
FY08*
Source: Chart prepared by CRS, based on data from the Department of Veterans Affairs.
*Note: Projected enrollment; actual second quarter enrollment 308,700.
2 U.S. Congress, Committee on Veterans’ Affairs, Veterans Health Care Expansion Act of 1973,
report to accompany H.R. 9048, 93rd Congress, first session, H.Rept. 93-368 (Washington: GPO,
1973).
3 The term “service-connected” means, with respect to disability, that such disability was incurred
or aggravated in the line of duty in the active military, naval, or air service. VA determines
whether veterans have service-connected disabilities, and for those with such disabilities, assigns
ratings from 0 to 100% based on the severity of the disability. Percentages are assigned in
increments of 10%.

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Moreover, the number of unique CHAMPVA users has grown by 149% from
FY2002 to FY2007 (see Figure 2). Unique users are enrollees who utilize a health
benefit at least once in a fiscal year.
Figure 2. CHAMPVA Unique Users, FY2002-FY2007
250
)
ds
n 200
a
us
150
Tho
(
rs
e 100
s
U
50
ique
n
U
0
FY02
FY03
FY04
FY05
FY06
FY07
Source: Chart prepared by CRS, based on data from the Department of Veterans Affairs.
Funding for CHAMPVA is provided through the VHA’s Medical Services account.4
As shown in Table 1, spending for CHAMPVA grew from approximately $200 million
in FY2002 to approximately $835 million in FY2008, a 311% increase over the seven-
year period. Between FY2002 and FY2007, CHAMPVA expenditures increased by
251%, while the number of unique users increased by only 149% during the same period.
These data imply an increased average cost per patient from approximately $2,495 per
patient in FY2002 to $3,512 per patient in FY2007. A demographic shift in CHAMPVA
enrollees from less expensive younger beneficiaries to more expensive aging
beneficiaries, in addition to the general inflation of medical costs, has contributed to the
increase in CHAMPVA expenditures.
Table 1. CHAMPVA Expenditures, FY2002-FY2008
(Dollars in millions)
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008
Actual
Actual
Actual
Actual
Actual
Actual
Estimated
Expenditures $203.1
$318.2
$454.5
$565.5
$656.9
$712.2
$834.8
Source: Table prepared by CRS, based on data from the U.S. Department of Veterans Affairs,
Congressional Budget Submissions (FY2004-09), Medical Programs.
4 For detailed information on VHA appropriations, see CRS Report RL34063, Veterans’ Medical
Care: FY2008 Appropriations, by Sidath Viranga Panangala.

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The next section provides answers to frequently asked questions about the program.
Questions and Answers5
Who Is Eligible to Receive CHAMPVA Benefits? Eligibility for CHAMPVA
requires inclusion in one of the following categories:6

! the individual is the spouse or child of a veteran who has been rated
permanently and totally disabled for a service-connected disability;
! the individual is the surviving spouse or child of a veteran who died from
a VA-rated service-connected disability;
! the individual is the surviving spouse or child of a veteran who was at the
time of death rated permanently and totally disabled from a
service-connected disability;
! or the individual is the surviving spouse or child of a military member
who died on active duty, not due to misconduct (in most cases, these
family members are eligible under TRICARE, not CHAMPVA).
What Happens if a CHAMPVA-Eligible Spouse Divorces or Remarries?
CHAMPVA eligibility is terminated by divorce or annulment of marriage to the
qualifying veteran. CHAMPVA has specific eligibility rules for widows. When a
CHAMPVA-eligible widow remarries, eligibility is terminated if the marriage occurs
before the age of 55. As of February 4, 2003, a CHAMPVA-eligible widow who
remarries at age 55 or older remains eligible for CHAMPVA. If a CHAMPVA-eligible
widow under the age of 55 remarries, and the remarriage is later terminated, the widow
is again eligible for CHAMPVA.
When Does a Child Lose Eligibility? In general, eligibility for CHAMPVA
is lost when either a child (other than a helpless child)7 turns 18, unless enrolled in an
accredited school as a full-time student; a child, who has been a full-time student, turns
23 or loses full-time student status; a child marries; or a stepchild no longer lives in the
household of the sponsor.
What Is the Difference Between CHAMPVA and TRICARE? Before
distinguishing between the two programs, it is important to make the distinction between
a veteran and a military retiree. Title 38 of the United States Code defines a “veteran” as
a person who has been discharged under conditions other than dishonorable from active
5 This part was drawn from: Department of Veterans Affairs Health Administration Center,
CHAMPVA 2006 Handbook, November 2006, at [http://www.va.gov/hac/forbeneficiaries/
champva/handbook/chandbook.pdf] and [http://www.va.gov/hac], visited June 2, 2008.
6 38 U.S.C. § 1781; 38 C.F.R. § 17.270-17.278.
7 A helpless child is established after a fact-based analysis completed by a VA Regional Office
determines the child to be permanently incapable of self-support by the age of 18. See 38 C.F.R.
§ 3.356 and [http://www.va.gov/hac/forbeneficiaries/champva/handbook/chandbook.pdf].

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military, naval, or air service.8 All military retirees, by definition, are veterans. However,
to be considered a “military retiree,” an individual generally must have spent at least 20
years on active duty in the armed services. CHAMPVA is a comprehensive program run
by the VA for eligible family members of veterans rated permanently and totally disabled
for a service-connected disability or the family members of veterans who died from a VA-
rated service-connected disability. The sponsoring veteran does not receive services
through CHAMPVA, as he or she is eligible to receive services through the VA.
Dependents of military retirees are not eligible for CHAMPVA, and must apply for
benefits through TRICARE. TRICARE is a health care program run by the DOD for
families of active duty military service members, families of service members who died
while on active duty, and retired military service men, women, and their families,
regardless of their disability status. TRICARE has no disability criteria required for
eligibility.9
What Is the Relationship of CHAMPVA and Medicare? Under section three
of the Veterans’ Survivors Benefits Improvement Act of 2001, referred to as CHAMPVA
for Life (P.L. 107-14), CHAMPVA benefits were expanded to those over the age of 65
in the following circumstances. CHAMPVA is the secondary payer for beneficiaries with
Medicare coverage.
! If a beneficiary turns 65 before June 5, 2001, and only receives Medicare
Part A, the beneficiary is eligible for CHAMPVA without having to
purchase Medicare Part B coverage.
! If a beneficiary turns 65 before June 5, 2001, and receives both Medicare
Part A and Part B, the beneficiary must retain both parts to be eligible for
continued CHAMPVA as secondary coverage.
! If a beneficiary turns 65 on or after June 5, 2001, the beneficiary must be
enrolled in Medicare Parts A and B to be eligible for CHAMPVA.
! Enrollment in Medicare Part D is not required to become or remain
eligible for CHAMPVA.
! Individuals aged 65 or older not entitled to Medicare Part A retain
CHAMPVA eligibility.
What Happens if the Beneficiary Has Other Health Insurance? By law,
CHAMPVA is generally the secondary payer for beneficiaries having any other form of
health insurance. The primary health insurance company is billed first, and then
beneficiaries submit an explanation of benefits (EOB) for additional reimbursement by
CHAMPVA. The exception is for beneficiaries with Medicaid, beneficiaries receiving
care under the State Victims of Crime Compensation Program, or beneficiaries with a
CHAMPVA supplementary insurance policy. In those cases, CHAMPVA is the first
payer.10
8 38 U.S.C. § 101.
9 For further information on TRICARE, see CRS Report RL33537, Military Medical Care:
Questions and Answers, by Richard A. Best Jr.; and the Department of Defense, Evaluation of
the TRICARE Program: FY2005 Report to the Congress, March 1, 2005, pp. 63. For specific
provisions, see [http://www.TRICARE.osd.mil]; relevant regulations are at 32 C.F.R. § 199.
10 38 C.F.R. § 17.275.

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What Medical Benefits Are Available to Eligible Beneficiaries? The
CHAMPVA program covers most health care services and supplies that are determined
to be medically necessary, including inpatient and outpatient care, prescription drugs,
mental health services, and skilled nursing care. By law, CHAMPVA is required to
provide health care benefits that are similar to the DOD’s TRICARE program.
Chiropractic services, routine eye examinations, hearing aids, and most dental benefits are
excluded from both the federal CHAMPVA and TRICARE programs.11
What Is the CHAMPVA Payment Structure? CHAMPVA is a cost-sharing
program that reimburses at rates comparable to the Medicare and TRICARE programs.
CHAMPVA has an outpatient deductible of $50 per person and $100 per family per
calender year. After the deductible is reached, CHAMPVA pays 75% of the allowable
amount, and the beneficiary pays 25% of the total amount.12 The patient typically pays
the cost share at the time the service is provided, unless the beneficiary has another health
insurance plan. In cases where a beneficiary has another form of health insurance,
CHAMPVA is the secondary payer (with the exception of the circumstances outlined in
question five), and pays the lesser of either 75% of the allowable amount after the
deductible or the rest of the billed charges. There is a $3,000 cap on cost sharing per
CHAMPVA-eligible family. There is also an exception to the payment scheme outlined
here for instances in which medical services are rendered through VA facilities
participating in the CHAMPVA In-house Treatment Initiative (CITI).13
What Is the CHAMPVA In-House Treatment Initiative (CITI)? The CITI is
a voluntary program for CHAMPVA beneficiaries that provides medical care through
local VA facilities on a space-available basis. Beneficiaries receiving care at the VA
through the CITI program are not required to pay a deductible or participate in cost
sharing. No extra enrollment is necessary to participate in the CITI program; the
beneficiary simply has to determine if the local VA is a participating facility. The
majority of VA facilities are CITI participants. It is important to emphasize that care is
delivered based on the availability of space. Beneficiaries on Medicare or who have an
HMO plan as their primary insurance are not eligible for the CITI program.
How Are CHAMPVA ClaimsPprocessed? All CHAMPVA claims are
processed through the VA Health Administration Center (HAC) in Denver, Colorado.
Claims can be submitted by either the provider or the beneficiary, with each case
requiring a different set of forms. All claims must be filed within one year after the date
of service. For inpatient care, the claim must be filed within one year of the discharge
date, and all payments will be made to the hospital regardless of which party submits the
billing. Claims submitted after the one-year deadline will be denied.
11 38 C.F.R. § 17.272.
12 An allowable amount is the maximum payment that is authorized by the VA for a covered
medial service or supply.
13 38 C.F.R. § 17.274.

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