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Members of Congress Inquire about VA Health Care

Yesterday, 45 members of Congress, led by Glenn Nye (D-Va), sent a letter to the president opposing any possible plan to bill third party insurers for veterans care for service related injuries and disabilities.  While no official proposal has been drafted by the administration, they have confirmed that the idea is still on the table.

March 17, 2009

The Honorable Barack Obama
President of the United States
The White House
Washington, DC

Dear Mr. President,

We first want to take this opportunity to thank you for the clear commitment your administration’s budget outline makes to our nation’s veterans.  The proposed 10 percent increase in discretionary funding for the Department of Veterans Affairs (VA) for next fiscal year is truly historic.  We believe the 2010 budget will ensure the VA never again faces the chronic under-funding that prevented countless veterans from receiving the health benefits they have earned.

While we strongly support your plans to increase funding for the VA by $25 billion over the next five years, it is with equal conviction that we oppose the proposal to bill veterans’ private health insurance plans for care and treatment of service-connected injuries or disabilities.

We do not give our veterans health care – they earn it – and it would be unacceptable for the VA to ask our veterans to pay for the treatment of injuries received while serving our nation in uniform. That responsibility belongs to the VA, and it would be wrong to outsource the responsibility of covering the care of those veterans to private insurance companies.

Additionally, this proposal could harm our veterans and their families in unintended, yet very serious ways, jeopardizing their families’ health care and even negatively affecting veterans’ employment opportunities.  Billing a veteran’s private health insurance for the treatment of service-connected injuries could lead to increased health care premiums, and could potentially discourage employers from hiring veterans.

We know you are committed to expanding employment opportunities for veterans. Already this year, your administration and Congress have worked to create countless jobs for veterans returning from the wars in Iraq and Afghanistan, but this proposal would undermine our efforts.

We urge you to take this proposal off the table, and let us instead focus on ensuring that our veterans receive the full care and benefits they have earned.  The moral obligation our nation has to our veterans demands nothing less.  We are happy to discuss these issues with you further as we move toward a final budget for the VA.

We would like to thank you again for your commitment to improving care for the men and women who have borne the battle, and who have sacrificed their health and well-being in serving their country.  Thank you for your service to our nation.


Glenn Nye

This request from Congress follows letters from major veterans groups also opposing the third party payer system.

First, much of the internet hullabaloo about this topic has been inflammatory, emotional, and inaccurate. The Obama administration has not proposed that the VA start collecting from insurance companies for non-service related care.  As Secretary Shinseki keeps saying, it’s simply an idea at this point.  It hasn’t been actually proposed yet.

The administration’s goal in considering charging insurance providers for service related care is, of course, to increase the funds the VA has for patient care.  There are some advantages to this.  The VA system is stressed and stretched to its limits.  There are too many veterans seeking VA care and not enough resources to care for them.  In shifting the burden for service related care to insurance companies, many of those now seeking care at VA facilities will turn to private physicians and facilities, thus reducing demand for VA services.


The most obvious problem with this plan is, of course, that it will shift the bureaucratic and administrative burden to the veteran.  Most of us have fought with insurance companies over coverage at one time or another.  We’ve also received bills from doctors or hospitals demanding immediate payment when our insurance companies are slow to process claims.  Frankly, our veterans don’t need that.  VA care is a promise made to our men and women in uniform and its one that should be kept if at all possible.  It’s part of the cost of defending our country.

Insurance policies will also become more expensive for businesses, employees, and those with individual insurance contracts if service related care must be covered by that insurance.  Veterans groups worry that employers will be reluctant to hire veterans with service related injuries and disabilities and that it will become even more difficult for veterans to acquire individual insurance policies.  Their fears are certainly well founded.

The insurance contracts themselves will also raise obstacles to the third party payer idea.  Most individual insurance contracts specifically exclude coverage for pre-existing conditions.  While this is a problem with our health care system in general, it hasn’t yet been fixed.  It seems nonsensical to demand payment under an insurance contract that will certainly be denied.  Normally, insurance regulation has been left to the individual states.  However, under Art. 1 sec. 10 of the Constitution, no state may “pass any Law impairing the Obligation of Contracts.”  Any effective system would require congressional action to mandate coverage for pre-existing service related care under private insurance contracts.


It seems as if everyone wants the same thing here. We all want to ensure that the VA has enough money to fund the care our veterans need. No one wants to burden veterans with more bureaucracy and paperwork. Nor do we want veterans and surviving family members to have to fight insurance companies on the VA’s behalf. So here’s our suggestion:

Drop the idea of making veterans use private insurance to pay for service related injuries and disabilities. instead, go after the outstanding third party claims the VA is already sitting on for non-service related care. That’s right. The VA already charges insurance for non-service related care and takes a co-pay from the veteran. Veterans are not responsible for paying any remaining balance of VA’s insurance claim not paid or covered by their health insurance.

For 2008, the VA’s budgeted third party collections were $2.5 billion. The proposed 2009 budget lists third party payments at $3.4 billion, although it doesn’t state whether this increase will be from current non-service care payments or from the considered service care insurance payments. This is an increase from $1.4 billion the VA collected in 2005, the $804 million in 2003, and the $687 million it collected in 2002.  Moreover, the VA has begun to contract out its bill collection services.  It doesn’t seem like a giant leap to suggest that the VA might be able to make up the $900 million shortfall if it concentrated on actually collecting the money already due from insurers for non-service related care.

Whatever the administration decides – and Congress actually passes – let’s not make things more difficult for military families and our veterans.

Cross posted at MOMocrats.


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