Veterans' Health Care

When the Department of Veterans Affairs' (VA) health care system was established in 1930, neither public nor private health insurance programs were available to American veterans. With the subsequent growth of public and private health insurance programs, most veterans today have alternatives to VA health care. National health care reform could further reduce the number of veterans lacking health insurance. This briefing report determines (1) how many veterans are receiving services under other federal health programs and the cost of providing those services and (2) how many veterans using VA services are eligible to receive care under other federal programs.

GAO found that: (1) in 1990, 81 percent of veterans had private health insurance and 26 percent were Medicare-eligible; (2) about 62 percent of Medicare-eligible veterans used Medicare services in 1990, and less than 7 percent of Medicare-eligible veterans used VA services; (3) Medicare accounted for $20.6 billion of the $36 billion in federal expenditures for veterans health care in 1990, and VA accounted for $10.9 billion; (4) private health insurance payments for veterans probably exceeded $22 billion in 1990; (5) veterans using VA services tended to have lower incomes and less private health insurance than nonusers; (6) health reform and proposed changes to Medicare could further reduce veterans' use of VA services, since many veterans may turn elsewhere for services if given a choice; (7) the proposed Health Security Act would transform the VA system into managed care plans that would compete with private-sector plans and expand entitlement to free acute-care services; and (8) options for restructuring VA services include maintaining a smaller direct-delivery system strictly for veterans, opening the VA system to other federal beneficiaries, converting some facilities to other uses, merging VA services with other federal health care systems, and contracting to provide hospital services.