Before discussing the pros/cons of privatizing the VA, it’s important to understand the history of the VA. The United States has a long history of carrying for her veterans, privatization is not an easy task. From before the Constitution was signed to today, special care and benefits have been provided to veterans. Those benefits have grown over the decades from disability payments to insurance and educational assistance.

Part 1: A brief history of Veterans Affairs

Part 2: Benefits of privatizing the VA

Part 3: Disadvantages of privatizing the VA

Pre-World War I

The United States has offered care for its veterans dating back to 1636 when the Pilgrims of Plymouth Colony were at war with the Pequot Indians. They passed a law stating all disabled soldiers would be taken care of by the colony. Less than one hundred years later, the Continental Congress of 1776 was encouraging enlistments to young able men during the Revolutionary War and offering disability pensions to all soldiers injured in combat; granting half their pay for life for loss of limb or other serious disability. Approximately 30 years later in 1811, the first domiciliary and hospital for veterans was established and paid for. Not long afterward, the federal government expanded their pensions and benefits to those families whom lost their loved ones to the war(s).

Immediately after the Civil War, the number of disabled veterans in need was so great that President Abraham Lincoln in March of 1865, a month before his assassination, authorized the National Asylum for Disabled Volunteer Soldiers. The predominant responsibility was to provide boarding and some medical care to disabled veterans. These homes continued to be built and utilized by veterans through the following wars including the Indian Wars, Spanish-American War, and the Mexican Border period.


World War I


Entering World War I in 1917, Congress established new systems for disability compensation, insurance for service personnel and Veterans, as well as vocational rehabilitation for the disabled. In 1918, Congress tasked the Bureau of War Risk Insurance with providing medical, surgical, and hospital services including supplies that are reasonably necessary for returning World War I Veterans.  According to the Veteran Affairs archives, this bill allowed the leasing of hundreds of private hospitals for the influx of returning troops.

Between 1924 and 1932, there was another expansion and liberalization of benefits for veterans that increased spending by more than 60% due to the increase in disability compensation and pensions for the Civil War and the Spanish-American War veterans. “Suicide, homelessness, unemployment, drug addiction; these things all kept happening,” Ridgway said, “and we did not take care of the returning veterans after World War I because there was so much backlash against what had been paid out to the Civil War veterans. But the veterans had these real needs, and it led to the organization of the veteran’s service organizations that we know of today,” as spoken by James Ridgway, chief counsel for policy and procedure at the Board of Veterans' Appeals.  

On July 21, 1930, Executive Order 5398 created the Veterans Administration to unite the Veterans’ Bureau, the Bureau of Pensions, and the National Homes for Disabled Volunteer Soldiers. The new agency was responsible for all medical services for war veterans and post-war benefits including disability compensation, life insurance, and bonus certificates. During the next decade, VA hospitals would increase from 64 to 91, and the number of beds would rise from 33,669 to 61,849.


World War II


World War II had a devastating toll on our nation: some 670,000+ men and women had been wounded and 400,000+ had been killed. Hundreds of thousands of dependents were left in need; therefore, Congress responded in 1944 with the Servicemen’s Readjustment Act. $500 a school year for tuition, fees, books and supplies were provided plus a monthly subsistence allowance as well as a federally guaranteed home, farm, and business loans with no down payment.  

“Under the act, approximately 2,300,000 attended colleges and universities, 3,500,000 received school training, and 3,400,000 received on-the-job training. The number of degrees awarded by U.S. colleges and universities more than doubled between 1940 and 1950, and the percentage of Americans with bachelor’s degrees, or advanced degrees, rose from 4.6 percent in 1945 to 25 percent a half-century later,” as reported by Our This proved to be a success during the following seven year as approximately 8 million veterans received educational benefits.




The Veterans’ Readjustment Benefits Act was enacted to combat the economic recession and high unemployment rate Vietnam veterans faced when returning home. The Act prohibited “job discrimination and requires federal contractors and subcontractors to take affirmative action to employ and advance in employment qualified Vietnam era veterans, special disabled veterans, recently separated veterans, and veterans who served on active duty during a war on in a campaign or expedition for which a campaign badge has been authorized,” according to the U.S. Department of Labor.

The Act offered one month of educational assistance for each month of service. Another response was purchasing the Servicemen’s Group Life Insurance from a commercial insurer offering a $10,000 maximum coverage and later incrementally increased to $200,000 until 1992.

Between 1960 and 1978 the number of veteran pensions grew as World War II veterans were reaching 65 and declared disabled. In 18 years, pension payments increased by 1.16 billion dollars; therefore, the 95th Congress passed the Veterans’ and Survivors’ Pension Improvement Act requiring all persons applying for an improved pension to report the income and estate of each spouse and child on account of whom such added pension is applied for or received.


Persian Gulf

Congress passed the Persian Gulf Conflict Supplemental Authorization and Personnel Benefits Act in 1991, which considered the conflict for determining eligibility for veterans’ benefits. The legislation extended to wartime-only pensions, medical treatment, educational benefits, housing loans, and unemployment payments. It offered psychological counseling at Vet Centers for veterans having trouble reintegrating into civilian life. Furthermore, the act authorized increases in the monthly educational benefits provided by the Montgomery GI Bill.

The VA then decided to group all hospitals into 21 Veterans Integrated Service Networks. This reorganization was part of the demand of changes in health-care delivery. The changes included population-based planning, decentralization, universal availability of primary care, a shift to outpatient care from inpatient care, and an emphasis on measuring health-care performance on the outcome of patient treatment. Two years later in 1997, the department began enrolling most veterans in the VA healthcare system and made eligibility for inpatient and outpatient care identical. VA began establishing community-based outpatient clinics across the country to increase points of access to health-care.



The Veterans Health Administration is the largest integrated health care system in the United States. There are 1,243 health care facilities, including 170 VA Medical Centers and 1,063 outpatient sites (VHA outpatient clinics), and serving more than 9 million enrolled veterans each year. The benefits veteran receives today include:

·         GI Bill and other education benefits

·         Certificate of Eligibility for a VA-backed home loan

·         Life insurance for you and your family

·         Pre-discharge disability claim

·         Converting your life insurance after separation

·         Educational and career counseling

·         Active duty service members and VA health care

·         Vocational Rehabilitation and Employment

·         Disability compensation

·         Support for Veteran-owned small businesses

·         Veterans Pension program

·         Aid and attendance or housebound allowance

·         Disability housing grants

·         More life insurance options

·         Pre-need eligibility determination for burial in a VA national cemetery