VA Health Care

Offsetting Long-Term Care Costs by Adopting State Copayment Practices Gao ID: HRD-92-96 August 12, 1992

The Department of Veterans Affairs (VA) could offset more of the costs of providing nursing home and domiciliary care in VA and community facilities if Congress allowed it to increase charges to veterans. In fiscal year 1990, VA offset less than one-tenth of one percent of its costs to provide care. In comparison, the eight states GAO visited required copayments of between four and 43 percent of state home operating costs. If VA had offset similar percentages, its yearly recoveries would have been between $43 million and $464 million. State homes offset a larger percentage of their operating costs through copayments than does VA because more veterans are required to make copayments and veterans who contribute toward the cost of their care typically must make larger copayments. State homes also provide safeguards to help prevent copayments from impoverishing a veteran's spouse or dependent children and to help ensure that veterans capable of returning home retain enough financial resources to return to the community.

GAO found that: (1) states have implemented or increased copayments for state veterans home residents to avoid deficits and home closings; (2) VA has not focused on increasing veterans copayment amounts to offset mounting costs; (3) in 1990, VA offset $260,389, or less than one-tenth of 1 percent of its budget; (4) a 4-percent copayment increase would have saved VA $43 million, and a 43-percent increase would have saved $464 million; (5) state homes require over 90 percent of veterans to contribute copayments, and grant fewer exemptions; (6) VA homes require veterans to contribute about 1 percent and exempt veterans more frequently than state homes; (7) states require veterans to make higher copayments than VA homes and community nursing homes; and (8) safeguards to prevent nursing home charges from causing financial hardship on veterans or their families involve not requiring veterans to sell their homes, granting personal needs allowances, and protecting spouses from impoverishment.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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