VA budget seeks $488 billion with 60,000 Alaska veterans facing shift toward private care

The Department of Veterans Affairs is asking Congress to approve a $488 billion budget for fiscal 2027 that would shift billions of dollars toward private healthcare for the nation's 16.5 million veterans, including roughly 60,000 who live in Alaska. The request would increase community care spending by $17 billion in the 2028 advance appropriation while holding direct care funding at VA facilities essentially flat.

Alaska veterans rely heavily on VA facilities in Anchorage and several community-based outpatient clinics across the state, with many traveling long distances for specialized care. The budget shift would affect how those veterans access treatment and which providers deliver it.

The budget request extends a pattern that has fueled recurring disputes over the past two years. Senator Richard Blumenthal, a Connecticut Democrat, noted community care funding rose from $9 billion in 2019 to more than $48 billion in the fiscal 2026 request, a 530 percent increase. In 2024, the VA sought $12 billion in supplemental appropriations for medical care, with the shortfall driven largely by community care costs.

Secretary Douglas Collins defended the request at a Senate Veterans' Affairs Committee hearing. He said the budget reflects a reorganization of how the department tracks costs rather than a move toward privatization. Collins said the VA still spends twice as much on direct care as on community care.

The new budget structure would separate administrative and contract costs that are currently commingled across accounts. The VA is proposing to move from four healthcare accounts to two in fiscal 2028, one for direct care and one for community care. Collins said the new structure would allow Congress to compare costs on an apples to apples basis for the first time.

Blumenthal raised concerns about workforce reductions. He cited figures showing roughly 35,000 VHA employees were lost in fiscal 2025, including about 1,000 doctors and 4,500 nurses, with another 15,000 employees lost in fiscal 2026. Collins said the reductions reflect better workforce management rather than cuts to needed positions.

Blumenthal said the budget prioritizes community care at the expense of direct care. He noted that more than $8 billion of the $10.9 billion increase for healthcare services in fiscal 2027 is for community care. Veterans typically prefer to receive healthcare at VA facilities, yet the funding request for direct care fails to keep pace with inflation, he said.

Collins rejected the privatization claim. He said veterans cannot go straight to community care without first enrolling in the VA system. He said the VA is following the law under the Mission Act and that community care is VA care. Collins said the VA has opened 35 new facilities in the past year and a half and that wait times have decreased across most categories.