“This is another part of the Koch brothers agenda. They’ve actually formed an organization to try to begin to convince Americans we should no longer have guaranteed health care, specialized care for our veterans. I will fight that as hard as I can. I think there’s where we can enlist the veterans service organizations, the veterans of America, because, yes, let’s fix the V.A., but we will never let it be privatized, and that is a promise.”
–Hillary Clinton, Democratic debate on MSNBC, Feb. 4, 2016
“Secretary Clinton is absolutely right, there are people, Koch brothers among others, who have a group called Concerned Veterans of America, funded by the Koch brothers. The Koch brothers, by the way, want to destroy Social Security, Medicare, Medicaid, every governmental program passed since the 1930s. Yes, there are people out there who want to privatize it.”
–Bernie Sanders, Democratic debate on MSNBC, Feb. 4, 2016
During an exchange about veterans’ health care, moderator Rachel Maddow asked the two candidates: “How will you win the argument on that issue given the problems that have been exposed at the V.A. in the last few years? What’s your argument that the V.A. should still exist and should not be privatized?” Maddow cited efforts to “abolish” or privatize large portions of the VA.
Then, just days after the debate, Clinton was quoted referring to the plan to “abolish the Veterans’ Administration.”
Clinton: "I will defend the VA against the Koch Brothers' efforts to abolish the Veterans Administration"
— Zeke Miller (@ZekeJMiller) February 6, 2016
Such an effort is most closely associated with Concerned Veterans for America, a veterans advocacy group in the Koch brothers’ political network. What exactly is the group’s proposal to overhaul the Department of Veterans Affairs?
Concerned Veterans for America, or CVA, has been one of the most vocal critics of the VA since the wait time scandal that unfolded in 2014. Whistleblowers alleged that dozens of veterans died at the Phoenix VA while waiting for medical care, and the VA Office of Inspector General eventually acknowledged that wait lists may have contributed to the veterans’ deaths. The inspector general also found patient and appointment record falsification and manipulations to be a systemic, years-long problem.
CVA was one of two major veteran groups that called for the resignation of then-VA Secretary Eric Shinseki and launched a “Fire Shinseki” petition. Shinseki resigned in May 2014.
In response to the scandal, Congress passed a bipartisan $16.3 billion bill to overhaul the VA. Sanders worked on this landmark compromise as chair of the Senate Committee on Veterans Affairs.
As we’ve noted previously, many veteran groups still criticize the senator for not reacting to the scandal quickly enough. They still point to Sanders’s comments in May 2014, the month after the Phoenix VA problems were aired publicly, saying that the VA is a large health care system that inevitably has problems. Members of the Senate VA Committee also wrote a letter urging Sanders to hold more oversight hearings and said their previous requests for hearings had not been fulfilled.
In 2015, a bipartisan task force commissioned by CVA proposed drastic changes, including converting the Veterans Health Administration into an independent, government-chartered, nonprofit corporation. This is the element of the proposal that gets called “privatization,” which usually refers to a complete outsourcing of government services to a private industry.
The Sanders and Clinton campaigns pointed to news coverage calling CVA’s proposal a privatization of the VA and to VA Secretary Robert McDonald’s criticisms of CVA’s proposal as privatization. But there is more to the proposal than that.
The crux of the proposal is to split up the current Veterans Health Administration’s payor and provider responsibilities by creating two new entities, one for health insurance and another for health delivery:
Health insurance through Veterans Health Insurance Program (VHIP)
- VHIP would be a program office at the Veterans Health Administration, which would continue to exist. Veterans would continue to be eligible for free VA health insurance, but would also receive premium support for private insurance.
- Ultimately, this office would provide direct subsidies for veterans’ health care, whether veterans get it from private or public providers. (CVA denies it proposes vouchers.) The premium support program would be similar to the Federal Employee Health Benefits Program. Veterans can access private health care by selecting from a menu of insurance plans.
- Highest-priority veterans with 50 percent or more service-connected disabilities are offered larger amounts of support. Future veterans in the lowest-priority groups would not qualify (see Priority 7 and Priority 8 on Page 27 of the proposal). Future veterans would be subject to cost-sharing based on levels of disability or financial need, according to Stars and Stripes.
Health delivery through Veterans Accountable Care Organization (VACO)
- VACO would be a nonprofit government corporation independent of the VA. This organization would oversee the VA’s health facilities and compete with the private market and contract with the VHA to provide care. The current VA would continue providing domiciliary care, research, training for health care personnel, and contingency support for national emergencies and times of war.
- The VACO would follow the model of Amtrak, which is run by the National Railroad Passenger Corporation (which is partially government-funded, for-profit corporation). It would receive congressional appropriations, be run by a board appointed by Congress and be subject to congressional oversight, said Dan Caldwell, CVA’s vice president for political and legislative action.
- The proposal also calls for inefficient VA medical centers and clinics to be shut down after a review by a panel appointed by the president.
“There isn’t a true privatization of a complete privatization of any real function of the VA. What it does is, it provides veterans the choice to access private health care. It doesn’t force them to do so,” Caldwell said.
The Clinton campaign pointed to criticisms of plans to privatize the VA, but some of the criticism were not specifically about the CVA’s plan. An op-ed in Military Times cited some advocates who say CVA has grown too political and that the proposal mixes the health care process with the claims process.
Frankly, these attacks on the VA proposals remind us of false claims Democrats have previously made about GOP proposals for Social Security and Medicare. (Sanders even said during the debate that the Koch brothers want to “destroy” Social Security and Medicare.) For more, see our previous fact checks on bogus Social Security claims and stale Medicare claims.
The Pinocchio Test
We can’t fact-check opinions. Candidates and veterans advocates who believe CVA’s proposal is too drastic, unrealistic or ineffective are clearly free to have their opinions. But the claim that CVA’s proposal would “privatize” the VA is not accurate.
The proposal would give veterans the choice to receive subsidized private care and would create a new, nonprofit government corporation to oversee the VA’s medical facilities. The new corporation would be modeled after Amtrak, which is not a private entity.
There are elements in the plan that open up veteran health care to the private market. But when people — especially politicians — talk about “privatization,” they usually refer to the wholesale transfer of government services to the private industry. That does not accurately describe CVA’s proposal, and both Clinton and Sanders earn Three Pinocchios. But a warning to politicians: The rhetoric that the proposal would “abolish” the VA is a Four Pinocchio claim, and we will treat it as such.
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