I'm not sure how that issue would be handled. But some means could be devised to ensure that Vets can get a reasonably priced policy without creating some vast welfare bureaucracy.
Well, it's kind of a big issue, wouldn't you say? This isn't a minor detail to be filled in. If you want to keep them from being turned away by private insurers, then you need a guaranteed issue rule. And if you want to "ensure that Vets can get a reasonably priced policy" then you're going to need some kind of rating rules to prevent vets from getting hosed simply for being vets.
Except if you're going to apply a guaranteed issue rule to just one particular segment of the population, you risk prompting insurers to exit the market for that segment. See the market for child-only policies in many states following the imposition of guaranteed issue rules (not even with any rating restrictions attached to it). And I'm going to go out on a limb and suggest that the child population generally has a more insurer-friendly risk profile than does the population of veterans (particularly in wartime). Which means you've now got to take steps to avoid that.
The point here being that there isn't a magical policy switch to flip and get just the results you want, you're going to employ a little more finesse in designing your approach. The world is complex.