Veterans' Administration Health-Care Programs Extension and Improvement Act of 1986

Veterans' Administration Health-Care Programs Extension and Improvement Act of 1986 - Amends Federal veterans' benefits provisions to require Veterans Administration (VA) police officers to enforce State and local traffic laws (currently, only Federal law is enforced) on VA property.

Includes as a veterans' medical benefit medical services necessary to overcome a service-connected disability which impairs the veteran's procreative ability. Includes as a veterans' benefit the continued counseling services for a deceased veteran's family member for up to six months following the veteran's death.

Makes veterans eligible for domiciliary care if such veteran: (1) has a service-connected disability; or (2) is incapacitated with no means of support.

Extends eligibility for readjustment counseling and related mental health services to veterans serving on active duty who also: (1) served on active duty during the Vietnam era; or (2) served on active duty after May 7, 1975, in an area where hostile action occurred.

Authorizes the Administrator of Veterans Affairs, beginning on October 1, 1986, and ending on September 30, 1989, to conduct a pilot program to furnish respite care services to certain veterans with service-connected disabilities. Defines "respite care." Requires the Administrator to conduct a study concerning the furnishing of such care, and to submit the results of such study, together with any recommendations, to the Senate and House Veterans' Affairs Committees no later than February 1, 1990.

Directs the VA, beginning on January 1, 1987, and ending on December 31, 1990, to conduct a pilot program under which certain veterans will be furnished medical, rehabilitative, and health-related care in noninstitutional settings at ten demonstration project sites. Gives priorities for selecting veterans to such program. Outlines certain administrative actions to be taken in order to avoid duplication of services from the VA and other sources, including the providing of case management services by the VA for each veteran furnished such services. Authorizes the Administrator to furnish in-kind assistance to facilities furnishing services to veterans under these provisions. Prohibits the total cost of conducting the pilot program from exceeding 60 percent of the cost incurred by the VA if the VA had instead furnished such services. Requires the Administrator to conduct a study concerning such program, and report the study's findings, concerning the operation of the program during its first 36 months, to the Senate and House Veterans' Affairs Committees no later than February 1, 1990. Requires the Administrator to submit a final report concerning the study to the same committees no later than April 1, 1991.

Extends until September 30, 1989, the authority of the Administrator to contract for medical care for veterans in the Philippines. Extends until September 30, 1989, the authorization of appropriations for making grants to upgrade medical equipment used for veterans in the Philippines.

Extends indefinitely the pilot program of providing independent living services and assistance to certain eligible veterans.

Extends through FY 1991 the authorization of appropriations for making grants to State facilities for the furnishing of medical services to veterans.