Veterans Groups, Lawmakers Condemn Obama Idea to Bill Private Insurers for Service-Related Care

By Ann Scott Tyson
Washington Post Staff Writer
Wednesday, March 18, 2009

An Obama administration proposal to bill veterans' private insurance companies for treatment of combat-related injuries has prompted veterans groups to condemn the idea as unethical and powerful lawmakers on Capitol Hill to promise their opposition.

Nevertheless, the White House confirmed yesterday that the idea remains under consideration, and Chief of Staff Rahm Emanuel and leaders of veterans groups are scheduled to meet tomorrow to discuss it further.

The proposal -- intended to save the Department of Veterans Affairs $530 million a year -- would authorize VA to bill private insurance companies for the treatment of injuries and medical conditions related to military service, such as amputations, post-traumatic stress disorder and other battle wounds. VA already pursues such third-party billing for conditions that are not service-related.

Veterans groups said the change would be an abrogation of the government's responsibility to care for the war wounded. And they expressed concern that the new policy would make employers less willing to hire veterans, for fear of the cost of insuring them, and that insurance benefits for veterans' families would be jeopardized.

Lawmakers explicitly ruled out the proposal yesterday in budget recommendations from the Senate and House veterans' affairs committees.

The chairman of the Senate panel, Daniel K. Akaka (D-Hawaii), said a majority of the committee members say the plan is fundamentally unfair.

"America's veterans and their families pay the true cost of war everyday, and we must pay for the care and benefits they have earned. I look forward to working with my colleagues and the Administration to pass a budget worthy of their service," Akaka said in a statement.

Sen. Patty Murray (D-Wash.), a senior member of the Veterans' Affairs and Budget committees, warned VA Secretary Eric K. Shinseki last week that the idea would be "dead on arrival," and she vowed yesterday that any budget containing the provision "is not going to pass."

"The VA has an obligation to pay for service-related care, and they should not be nickel-and-diming vets in the process," she said in an interview. "This proposal means that family members will be hurt because, if a vet meets the maximum [benefit amount] for their insurance, their wife and kids would not be able to get insurance [benefits] anymore. . . . God forbid a wounded vet from Iraq has a wife who gets breast cancer."

White House press secretary Robert Gibbs said yesterday that the Obama administration has not made "the final . . . decision on third-party billing as it relates to service-related injuries."

At the same time, Gibbs noted that the administration is seeking an 11 percent increase in discretionary spending in the VA budget, a decision lawmakers and veterans groups have praised. "This president takes very seriously the needs of our wounded warriors that have given so much to protect our freedom on battlefields throughout the world," Gibbs said at a White House news conference.

VA and the Office of Management and Budget did not respond to requests for more details on the proposal.

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