VA to Bill Medicare Advantage and Private Insurers Directly for Veteran Healthcare Costs Starting 2026

The new GUARD Veterans Health Care Act is essentially a major financial cleanup for the Department of Veterans Affairs (VA), ensuring they get paid back when they provide care that someone else—like a private insurer or a responsible third party—should cover. Think of it as the VA finally getting the administrative muscle to collect its debts faster and more aggressively.

Closing the Medicare Advantage Loophole (Sec. 2)

If you’re a veteran who uses the VA but is also enrolled in a private Medicare plan (Medicare Advantage or Part D), this section is for you. Starting with plan years on or after January 1, 2026, the VA will be able to bill your private Medicare Advantage or drug plan directly for any healthcare services they provide you. Right now, there are often gaps where these private plans don't pay the VA back for care they cover, even when the veteran is dual-eligible.

This change cuts through the red tape. The bill states that even if the private plan has its own rules about pre-authorization or claims processing, the VA can still collect the cost of care. The money recovered goes straight into the VA Medical Care Collections Fund. The practical takeaway? This should stabilize and increase funding for the VA healthcare system, which ultimately benefits all veterans by ensuring more resources are available for medical services.

New Rules for Insurance Companies: Pay Up or Pay Interest (Sec. 3)

Section 3 ramps up the VA’s ability to recover costs when a veteran receives care for a non-service-connected disability—like a car accident or a slip-and-fall injury—and a third party (like an auto insurance company or a liability insurer) is responsible for paying the medical bills. The government already has the right to recover these costs, but this bill adds teeth to the process.

It sets strict deadlines for third parties. If the VA sends a claim, the third party has 45 days to either pay the claim or provide a detailed, written explanation for why they won’t pay. If they miss that deadline, they start accruing interest, calculated monthly. If they ask for more information, the VA has 45 days to send it, and then the insurer has just 15 days to process the claim or face interest charges.

This is a huge shift. For insurance companies and third parties, this means they can’t drag their feet or rely on complex internal procedures to delay payment. For veterans, this means the VA is less likely to absorb costs that should be covered by liability settlements or insurance payouts, preserving VA resources for service-connected care.

The Triple Damage Penalty

The most significant change for third parties is the penalty structure. If an insurer willfully refuses to pay a “clean claim”—meaning a claim that can be processed without needing extra information—they face a penalty of the higher of triple the claim amount or up to $50,000 per violation (with adjustments for inflation).

This high-stakes penalty is designed to eliminate payment disputes and delays instantly. While this might lead to some administrative headaches and potential disputes over what constitutes a “clean claim,” the intent is clear: responsible parties must pay the VA what they owe promptly, or they will face massive financial repercussions. This provision is a powerful tool aimed squarely at protecting the VA’s bottom line, ensuring that the cost of care is borne by the entity legally responsible for the injury.