Mandatory VA funding not a good idea

Tom Philpott, Military Update

If John Kerry has his way, any veteran who served two years on active duty or, if mobilized, even less, would be rewarded with lifetime access to healthcare from Department of Veterans Affairs (VA).
That’s the logical consequence of Kerry’s call for “full, mandatory funding” of veterans healthcare, if the Democratic presidential nominee is elected and Congress accepts his plan to open VA healthcare to any veteran.
“What’s critical is that people who served their country and want to go to a veterans’ hospital will have the ability to choose to do so,” said Kerry, in a phone interview on Wednesday, following his address to the Veterans of Foreign Wars in Cincinnati.
The Bush administration opposes mandatory funding of VA healthcare.
It would require Congress to finance VA healthcare to a level sufficient to cover medical needs of all enrollees, using a per capita cost formula.
Mandatory funding, in effect, would put teeth into the Veterans’ Health Care Eligibility Reform Act of 1996 which authorized the opening of VA healthcare to any veteran.
But Congress did not fund open access. Instead it gave the VA secretary authority to control access to stay on budget.
The Congressional Budget Office estimates the added cost of mandatory VA health funding at $30 billion in fiscal 2005 and more than $165 billion from 2005 through 2008. That assumes many more veterans will enroll on learning that VA funding is assured.
Current enrollment is 7 million veterans but only 5.2 million were expected to receive care in 2004.
As conceived by Kerry and congressional Democrats, mandatory funding also would remove barriers to enrollment, which would mean reversing a decision by VA Secretary Anthony Principi in January 2003 to suspend enrollment of Category 8 veterans — those with income or total worth above poverty level and no service-connected injuries or ailments.
In an interview, Principi said not only would mandatory funding add many billions of dollars to VA healthcare costs but it would dampen VA and congressional oversight of healthcare spending by relying on a formula.
“We have a responsibility to the American people to be efficient, effective and to provide high quality care,” said Principi.
Mandatory funding would end some of the “checks and balances” to do that.
Principi conceded that healthcare funding has been a worry for veterans and support organizations as enrollment grew. But mandatory funding, he said, could change the VA from a provider of healthcare to a “payer” for healthcare, and bring “serious unintended consequences.”
VA already “vouchers out” a rising portion of care because VA hospitals and clinics can’t meet demand. Mandatory funding would accelerate this growth, though contracting for care is preferred to building more hospitals and clinics which, by 2020, could be deemed excess as veterans from World War II and Korea pass on.
Principi’s concern is that as more care is contracted out, the VA could begin to look like any national healthcare system, and pressure would mount to merge, perhaps with Medicare. If that happened, he said, the uniqueness of VA healthcare, from expertise in treating spinal cord injuries to vast experience with post-traumatic stress disorder, could be lost.
“If you lose the VA, you would lose all of those unique specialized programs,” said Principi.
Kerry, in his VFW speech, promised to “lead the fight” for mandatory funding, referring to 500,000 veterans denied enrollment from the ban on accepting more Category 8 veterans. Later, in our brief conversation, Kerry didn’t balk at the prospect of lifetime care going to veterans with little time in service and no exposure to combat or service-connected ailments.
“I have a plan that’s going to provide healthcare to 97 percent of Americans within three years of the passage of the bill,” said Kerry. “So it is absolutely logical that veterans should be a priority within that structure.”
In his speech, he criticized Bush administration proposals to collect a $250 annual healthcare enrollment fee for veterans with no service-connected conditions and above-poverty incomes, and to increase their co-payments on VA-provided drugs, from $7 up to $15 for a 30-day supply.
Principi defended these decisions. He suspended enrollment of Category 8 veterans last year, he said, because the disabled and poor were getting squeezed out. He also defended the proposed enrollment fee and higher co-payments, calling them reasonable cost-control initiatives. If it’s OK for an E-6 retiree to pay $230 a year to enroll in TRICARE Prime, why is it inequitable for a veteran who served as few as two years, and doesn’t have a military-related disability, to pay $250, Principi asked.

Tom Philpott can be contacted at Military Update, P.O. Box 231111, Centreville, Va. 20120-1111, or by e-mail at: milupdate@aol.com