Watchdog report flags major gaps in care for Palau, FSM, Marshall Islands veterans

By Bryan Manabat

Veterans from the Federated States of Micronesia, the Marshall Islands and Palau continue to face steep barriers to accessing Department of Veterans Affairs health care, despite long‑standing promises made under the Compacts of Free Association, according to the Government Accountability Office.

GAO conducted the review because the Compact of Free Association Amendments Act of 2024 required independent oversight of the VA's evaluation —and ultimately decision—to decline new authority to expand hospital care, medical services, telehealth, and travel reimbursement for eligible veterans in the freely associated states.

Lawmakers asked GAO to examine VA’s 2025 decision and determine whether the agency had adequately assessed options for delivering care in the region.

The report, released Sept. 25, found that veterans living in the FAS must navigate a system that effectively requires them to leave their home islands for care, often traveling thousands of miles to VA facilities in Honolulu or Guam.

Because VA does not reimburse travel between the FAS and the United States, veterans shoulder the full cost of airfare—typically more than $1,000 round‑trip—just to access basic services.

GAO said the lack of accessible care is rooted in limited specialty services, inconsistent infrastructure, and the absence of VA telehealth in the FAS. Mental health care is especially scarce.

“Psychiatric and mental health services and facilities are limited,” the report states, noting “insufficient mental health providers in the FAS to treat specific needs of veterans.” Officials in all three countries told GAO that untreated PTSD and suicide risk remain serious concerns.

Congress granted VA discretionary authority in 2024 to expand care in the FAS, directing the agency to conduct outreach, assess implementation options, and engage with FAS governments.

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VA spent a year conducting an environmental scan and policy analysis, outlining two paths: maintain the status quo at an estimated annual cost of $2 million, or fully implement expanded care at a projected $26 million for currently enrolled veterans — and up to $200 million if all 1,100 potentially eligible veterans participated.

Full implementation would require new reimbursement models, expanded travel benefits, telehealth infrastructure, and regulatory changes expected to take more than two years. VA warned that full implementation would give FAS veterans benefits not available to other veterans living overseas, raising equity concerns.

In April 2025, VA informed Congress it would not exercise its new authorities. Engagement with FAS governments stopped soon after. GAO noted that VA’s decision left veterans with the same limited options they have had for decades: the Foreign Medical Program, which reimburses only service‑connected care, and travel to distant VA facilities in U.S. jurisdictions.

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But VA reversed course in mid‑2026. Officials told GAO they had resumed discussions with FAS governments and were pursuing partial implementation of the law, including telehealth services, pharmaceutical delivery, reimbursements for care in the FAS, and travel benefits for service‑connected veterans. In August, VA submitted a draft action memo to the State Department to begin the Circular 175 process required for international agreements.

No timeline has been provided.

FAS governments, which had prepared for expanded VA services in 2024 and 2025, welcomed the renewed engagement. FSM established a national Office of Veterans Affairs, and Palau updated its data systems to track veterans’ needs. But officials told GAO that veterans remain frustrated — many leave their home islands for extended periods to access care in Guam or Hawaii, weakening local workforces and straining families.

GAO said the lack of accessible care undermines both U.S. commitments to veterans and broader strategic goals in the Pacific, where the FAS remain key partners in regional security and U.S. efforts to counter China’s influence.

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