VA Health Care

Issues Affecting Eligibility Reform Efforts Gao ID: HEHS-96-160 September 11, 1996

The evolution of the Department of Veterans Affairs (VA) during the past 60 years has resulted in a maze of complex eligibility rules. These rules frustrate veterans, who cannot understand what services they can get from VA, and VA physicians and administrative staff, who have to interpret the eligibility provisions. Proposals to simplify and expand eligibility for veterans' health care benefits have been put forth by Congress, the administration, and leading veterans service organizations. This report discusses (1) the evaluation of the VA health care system and VA eligibility; (2) the problems that VA's current eligibility and health services contracting provisions create for veterans and providers; (3) the extent to which VA provides veterans with health care services for which they are not eligible; (4) legislative proposals to reform VA eligibility and contracting rules and their potential effect on ease of administration, equity to veterans, costs to VA, and clarity of eligibility for veterans' health benefits; and (5) approaches that could be used to limit the budgetary effects of eligibility reforms.

GAO found that: (1) the VA health care system was neither designed nor intended to be the primary source of health care services for most veterans; (2) as the eligibility requirements for VA health care have evolved over the years, they have become increasingly complex and a source of frustration to veterans who are often uncertain about which services they are eligible to receive and to VA physicians and administrators who find them difficult to administer; (3) unlike private health insurance, VA health care does not have a defined, uniform benefit package and cannot guarantee the availability of covered services, and VA is limited to providing only those services covered by an individual veteran's VA benefits; (4) a VA facility is not permitted to provide a noncovered service even if it has the resources to provide the service and the veteran is willing to pay for it; (5) GAO recognizes the need for eligibility reform, which, for most veterans, might result in additional health care services not covered under their public or private insurance; (6) for veterans who do not have other insurance to meet their health care needs, eligibility reform is more important and could result in access to comprehensive health care services, including preventive care; (7) four legislative proposals would simplify and expand veterans' eligibility for VA care, and a fifth proposal, by the American Legion, has not yet been introduced as a legislative proposal; (8) each of the proposals has significant implications regarding the number of eligible veterans as well as the cost of providing care; (9) four of the proposals, which retain the discretionary funding of VA health care, could more than double demand for VA outpatient services, forcing VA to either ration care or seek larger appropriations; (10) the American Legion proposal, which would create an entitlement, would likely require significantly increased appropriations; (11) other issues in the proposal include provisions to exempt VA from most federal contracting laws and to deem VA as a Medicare provider; (12) GAO's work suggests that eligibility reforms could be developed to both strengthen VA's safety net mission and preserve its ability to provide specialized services; (13) among the approaches that could be pursued are placing limits on the number of veterans given expanded benefits, narrowing the range of benefits added, or increasing cost sharing to offset the costs of added benefits; and (14) the American Legion proposal provides a good starting point for developing future reform proposals, but changes would be needed to reduce the number of veterans covered by the entitlement if significant increases in VA appropriations are to be avoided.

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