GAO discussed the potential effects of health financing reforms on the Department of Veterans Affairs' (VA) health care system. GAO noted that: (1) the demand for VA inpatient services would decrease by 18 percent if employer-mandated health insurance was available to workers or employers paid a tax to obtain health insurance; (2) the demand for VA inpatient services would decrease by 47 percent under a nationwide universal health plan; (3) the availability of cost-free care from private-sector physicians through combined Medicare and Medicaid coverage could reduce elderly veterans' demand for care, since low-income veterans are more likely to seek VA health care services; (4) if future employer-mandated health insurance provides coverage for nursing home care, it will not have a significant effect on the demand for VA-supported nursing home care; (5) universal coverage could have a more significant effect on the demand for VA nursing home care, since the universal health plan provides for long-term care services; and (6) reforms of the VA eligibility system could have a significant effect on the future demand for VA health care services.