Congress, feeling its way into an area of great political difficulty, appears about to take some steps to rationalize the eligibility rules at veterans' hospitals. The budget resolution adopted as the two houses went on vacation calls for cuts in veterans' programs of $300 million next fiscal year and $1.2 billion through fiscal 1988. The assumption was that these cuts (which do not mean that spending on veterans will decline, only that it will rise less than otherwise) would be made in health programs, and that is where the veterans committees of the two houses are looking. The questions before them are which veterans should be admitted to the hospitals and whether all care should continue to be free. The questions have to do not with past service to the country but with ability to pay.
The problem before the committee members is not just to do their share in reducing the deficit; it has to do with demography as well. There are 28 million veterans in the country, of whom about 11 million served in World War II. The World War II generation is rapidly reaching age 65, at which, under current rules, all veterans are eligible for free care in veterans' hospitals regardless of income, assuming only that beds are available. There are now more than 4 million veterans over age 64; by the year 2000 there will be about 9 million. Absent some change in the rules, they will put enormous upward pressure on a budget that is already fairly high. Veterans Administration health services now cost about $10 billion a year; that is on top of about $15 billion in other veterans' benefits.
In its budget in January, the administration proposed two steps to cut VA health costs. One involves those cases where veterans go to VA hospitals even though they have private health insurance; the administration proposed making the private insurers pay. It also called for a means test for admission to VA hospitals except for veterans with service-connected disabilities. For a veteran with one dependent it suggested an income cutoff of $15,000 a year.
Veterans groups have not been happy with either proposal; their view is that all who have served should receive the nation's care. The insurance industry has also resisted the idea of making private insurers pay. It complains that the administration is simply trying to shift the cost of a public responsibility to private insurance premiums. There is also a legal dispute as to whether the government has the power to force a private insurer to offer a particular kind of insurance. But in terms of the way it would allocate costs, the idea makes sense to us.
So does a means test (though not necessarily as restrictive a test as the administration proposed). Veterans groups and other critics say that this, too, would produce more cost-shifting than savings. Older veterans now cared for in VA hospitals would be thrown back on Medicare, for example. The VA argues as well that beds emptied by the means test will quickly be filled by poorer veterans now cared for in part by other public programs. But that at least would harden the rationale for the VA system.
The veterans groups have influence in Congress. An effort this spring to amend the Senate budget resolution to allow a much smaller cut in veterans' programs failed by only two votes, 47 to 49. But there is no reason to maintain a separate and costly health service for veterans whose military service did not leave them disabled and who are not poor. The cuts contemplated are the right thing to do.