The Obama administration dropped a proposal to require some disabled veterans to pay for medical treatments through their private insurance companies, heeding a chorus of outrage from veterans groups and Capitol Hill lawmakers who said the idea was immoral, unconscionable and un-American.
The White House decided to scrap the plan after meeting with a contingent of veterans and military advocacy groups on Wednesday for the second time this week.
"In considering the third-party billing issue, the administration was seeking to maximize the resources available for veterans," said White House spokesman Robert Gibbs. "However, the president listened to concerns raised by the [veterans groups] that this might, under certain circumstances, affect veterans and their families' ability to access health care."
The proposal, which the administration said was never a certainty, called for generating an estimated $540 million in savings by tapping veterans' private insurance for service-related injuries and ailments that for decades the government has been obligated to pay.
Opponents of the plan said they were concerned it would cause insurers to increase premium rates to cover service-connected disabled veterans and their families. They also worried that some employers, especially small businesses, would be reluctant to hire veterans with service-connected disabilities due to the negative impact their employment might have on obtaining and financing company health care benefits.
After a public outcry over the proposal erupted that included Democrats and Republicans, the administration decided it was politically untenable to press forward on the matter.
Veterans groups learned of the administration's decision at a meeting later in the day at the Capitol with House Speaker Nancy Pelosi, California Democrat.
"Based on the respect that President Obama has for our nation's veterans and the principled concerns expressed by veterans' leaders, the president has made the decision that the combat-wounded veterans should not be billed through their insurance policies for combat-related injuries," Mrs. Pelosi told the veterans group representatives, who greeted the news with a standing ovation.
The veterans groups, which only a day earlier were livid with the administration, praised the president Wednesday, saying they appreciated his willingness to listen and respond to their concerns.
"The president was very open and candid when he met with veterans groups earlier this week, and we are pleased that he has heard our concerns and taken them to heart," said Disabled American Veterans Executive Director David W. Gorman.
Veterans of Foreign Wars' Commander Glen M. Gardner Jr. said he was impressed the president kept his word to listen to the veterans' community if it objected to the proposal.
"Now we can move forward and work with his administration and Congress to ensure that the rest of the Department of Veterans Affairs budget recommendation is signed into law," he said.
The administration's about-face also received bipartisan applause on Capitol Hill.
"President Obama made the right decision not to move forward," said Senate Veterans Affairs Committee Chairman Daniel K. Akaka, Hawaii Democrat, who on Tuesday vowed his panel would neither draft nor advance any legislation that would shift veterans' health care costs to the private sector and away from Veterans Affairs (VA).