- The Washington Times - Wednesday, March 6, 2002

In a Department of Veterans Affairs budget proposal noteworthy for its 7 percent increase in veteran's health care spending, one proposal has met with skepticism: a $1,500 annual deductible affecting "Priority 7" veterans.

These veterans have no service-connected disability and have incomes above statutory low-income thresholds ($24,000 for singles and $28,000 for those with dependents). Affected veterans would pay a percentage of their medical charges, not including medications, up to the deductible limit and then modest copays thereafter. The deductible proposal has two overarching goals: keeping the doors open for all vets and maintaining quality and accessibility. Some history will provide context.

In 1996, Congress created enrollment for VA health care. Until that time, VA care was largely restricted to veterans with service-connected injury or those who were indigent. This change initiated a priority system, with veterans of varying levels of service-connected disability and economic hardship in priorities 1-6. Those with neither, "Priority 7s," were welcomed into the system, although they were to be assessed modest co-pays to help defray their costs. Finally, although all care for service-connected injury is free of charge in the VA system, care given for nonservice-connected injury may be billed to a veteran's insurer (except for Medicare and HMOs but that's another story).

In the last decade or so, the VA has undergone change, and change for the better. It is not "your father's VA" or the VA of indifferent standards and shoddy care depicted by Hollywood. The VA is a leader in American medicine in quality management with programs recognized for excellence in patient safety, surgical standards, computerized patient records, telemedicine and rehabilitation of the blind. In an "accessibility revolution," the VA now has some 800 community-based outpatient and ambulatory care clinics. More than 85 percent of VA patients live within a half-hour of a VA health care facility. There is a generous standard benefits package with a prescription drug benefit. Today, VA care is quality care.

Quality, accessibility and openness have brought rapid growth. The total caseload since 1996 has doubled to more than 6 million enrollees. Figures for Priority 7 veterans have increased by 500 percent. In these times of economic sluggishness and multiple HMO collapse, high demand areas have seen Priority 7 enrollment growth rates of 20 percent to 25 percent for the last several years. This record expansion, which is continuing, has stressed the system, increasing waiting times and jeopardizing the hard-won quality enhancements of recent years.

One solution would be to restrict enrollment, as the law provides for, and to keep new Priority 7 veterans out of the system altogether. In December, this approach was considered and explicitly rejected by the president. What now has been proposed the deductible would maintain an open system of enrollment for all veterans while asking those mid- to higher-income veterans without service-connected injury, and their insurance companies, to confront more, but by no means all, of the costs of their care.

This is not "balancing the VA budget on the backs of veterans," as some critics have charged. The VA estimates that it will collect only about $260 million in increased insurance collections, or about 1 percent of the total VA health care budget of $25.5 billion. Given the economics of 21st-century American health care, this is a reasonable, even modest, expansion of the cost-sharing principle that has always applied to priority 7 veterans. More importantly, it will help moderate the runaway growth of recent years and allow VA to maintain a quality system open to all veterans.

The deductible proposal deserves a good look. It is not solely, or even primarily, a "revenue enhancer" as its critics maintain. Rather, it is a serious proposal put forth in hard times to deal with the dynamics of a challenging situation. Let us all hope it receives the due consideration it merits.

Leo S. Mackay Jr. is deputy secretary of the Department of Veterans Affairs.

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