U.S. HOUSE OF
REPRESENTATIVES
REPORT
TO THE
COMMITTEE ON THE BUDGET
FROM THE
COMMITTEE ON VETERANS’ AFFAIRS
SUBMITTED PURSUANT TO SECTION 301 OF THE
CONGRESSIONAL BUDGET ACT OF 1974
ON THE
BUDGET PROPOSED FOR FISCAL YEAR 2004
February 28, 2003
Honorable Jim Nussle
Chairman
Committee on the Budget
U.S. House of Representatives
Washington, DC 20515
Dear Mr. Chairman:
Enclosed with this letter is the report of the Committee on Veterans’
Affairs on the fiscal year 2004 budget for veterans’ benefits and
services.
The Committee has carefully reviewed the Administration’s budget
proposal for the Department of Veterans Affairs (VA). On February 11,
2003, the Committee held a hearing to receive the testimony of the
Secretary of Veterans Affairs and veterans service organizations on the
Administration’s proposed budget, as well as views on the Independent
Budget proposed by four major veterans organizations. While the
Administration has again proposed a substantial increase in the budget
for veterans’ affairs, there remains a gap between the level of
resources it would provide and that needed to meet unprecedented growth
in demand for VA health care. There is also a serious backlog of
maintenance and repair projects necessary to transform many of our
National Cemeteries from neglected graveyards to national shrines.
The Administration’s proposed fiscal year 2004 budget requests total
resources for the medical care business line of $27.5 billion, a net
increase of $2 billion over the fiscal year 2003 level for equivalent
accounts; of this $2 billion, only $1.5 billion is appropriated funds.
Of the total increase requested in the 2004 budget, about $525 million
would come from increased collections. Payments by veterans for VA
health care are projected to increase by $187 million due to several
proposed policy changes; increased collections from third parties
account for $349 million of the $525 million projected increase, with
proposed legislative changes accounting for $69 million of this amount.
Adoption of these policies
would result in a significant reduction in demand for VA health care
from veterans who do not have a compensable service-connected disability
and who are not poor.
The VA’s ability to provide long-term care would be severely impaired by
the Administration’s proposal to close about 5,000 of its 12,000 nursing
home beds. Given the expected number of elderly veterans from World War
II and the Korean War who are expected to seek nursing home care over
the next ten years, the Committee is strongly opposed to any proposal
that would result in the closure of even a single VA nursing home bed.
The Administration’s health care budget also is predicated on achieving
“management efficiencies” totaling $950 million. Previous VA budgets
contained similar proposals, and while the Committee does not wish to
discourage efforts to make VA health care more efficient, there is
little evidence that such savings have been or will be achieved. Thus,
the Committee is reluctant to rely on projections of this magnitude as a
substitute for funding veterans’ health care.
The Committee observes that funding for veterans’ health care has become
one of the most contentious topics year after year, and that it is
nearly impossible to manage veterans’ health care on a rational,
business-like basis with the current unreliable funding situation. The
Committee is convinced that veterans’ health care funding must be put on
a more firm foundation that matches funding with the actual number of
veterans who seek care from VA. Consequently, the Committee believes
that Congress should make a commitment to funding VA health care for
enrolled veterans on a fiscally responsible and guaranteed basis, and
the Committee recommends that the Budget Committee provide for this
funding change in the budget resolution.
For veterans’ entitlement benefits, the Administration proposes $33.4
billion in entitlement programs for compensation, pensions, education,
vocational rehabilitation and employment, housing, insurance and burial.
The Committee recommends legislation that would permit surviving spouses
of veterans killed on active duty to retain their VA benefits if they
remarry after age 55. Every other Federal survivor benefit permits the
continuation of benefits to spouses who remarry after a certain age.
College Board data show the current $900 Montgomery GI Bill monthly rate
would need to be $1,496 for a veteran-student to attend a four-year
public college as a commuter student. The Committee recommends an
incremental increase in basic monthly benefits to $1,200, and
elimination of the initial $1,200 participation fee servicemembers must
pay. The total first-year cost of these and
other benefit enhancements is estimated by the Committee to be $701
million, and the Committee strongly recommends that these benefit
improvements be accommodated in the 2004 budget resolution.
The Administration budget also requests $422 million to pay burial
benefits to veterans’ families, operate 121 National Cemeteries, develop
new national cemeteries, expand existing cemeteries, and establish or
expand state veterans’ cemeteries. The Committee welcomes this
initiative, but believes that an additional $65 million is needed to
address the $279 million in recently identified cemetery maintenance and
restoration projects.
Although the VA has made considerable progress in implementing a number
of recommendations made by a task force that studied the benefits claim
backlog, the Administration’s budget inexplicably does not provide any
additional funding to continue implementation of a number of
recommendations. The Committee recommends a modest increase of $12
million to implement these recommendations, as well as $17 million to
retain existing staffing in VBA’s various programs.
We believe the increases recommended by the Committee and more fully
justified in the accompanying views and estimates for fiscal year 2004
are necessary to adequately fund veterans programs. We particularly wish
to reiterate that Congress must find a better way to fund veterans’
health care in order to meet the obligation to care for those who have
answered the Nation’s call to duty.
We thank the Committee on the Budget for considering our recommendations
and look forward to continued discussion on these important issues.
Sincerely,
CHRISTOPHER H. SMITH LANE EVANS
Chairman Ranking Democratic Member
Enclosures
BACKGROUND AND
COMMITTEE RECOMMENDATIONS
DEPARTMENT OF
VETERANS AFFAIRS
Veterans Health Administration
The
Status of VA Health Care. – Beginning in the mid-1990s, the Department
of Veterans Affairs accelerated internal reforms of its health care
delivery system for veterans, greatly emphasizing primary and managed
care, while expanding sites of clinical service. Today, VA health care
is widely available to millions of veterans in 1,300 locations, ranging
from major urban academic medical centers to rural storefront clinics.
VA health care is recognized for its world-class patient safety program
and provides veterans a measurable advantage in quality of care. As
provided by law, VA manages veterans’ access to care through a formal
enrollment system. Through outreach VA has enrolled nearly seven million
veterans, about five million of whom are regular patients.
While the number of veterans enrolled in VA medical care has increased
dramatically, appropriated funding is not keeping pace with the growth
in enrollment or the increased needs of elderly veterans. Further, much
of VA’s capital infrastructure (hospitals and clinics) is outdated or
not receiving adequate maintenance. Many VA health care structures are
subject to severe seismic risk and some, in fact, have been damaged by
earthquakes in recent years. Some obsolescent facilities need complete
replacement.
In July 2002, VA reported to Congress that it estimated that 310,000
veterans were waiting more than six months for initial appointments. By
December 2002, that number had been reduced to 236,000, but two-thirds
of these were new enrollees, not respondents to the initial data review
from July.
The Secretary of Veterans Affairs, the Honorable Anthony J. Principi, on
February 11, 2003, presented the VA’s budget request for fiscal year
2004 to the Committee. In his testimony, the Secretary observed: “[t]he
demand for VA health care has risen dramatically in recent years. From
1996 to 2002, the number of patients to whom we provided health care
grew by 54 percent. Among veterans in Priority Groups 7 and 8 alone, the
number treated in 2002 was about 11 times greater than it was in 1996.”
The Department has confirmed to the Committee that in the current fiscal
year, it projects a shortfall in resources of $1.9 billion to meet the
anticipated needs for medical services of those already enrolled. At the
Committee’s hearing on the state of the VA health care system on January
29, 2003, the Under Secretary for Health, the Honorable Robert H.
Roswell, testified that to adequately meet the needs of VA’s core
constituency of service-disabled and poor veterans, the Veterans Health
Administration would require annual budgetary increases of 13 to 14
percent. The Department received a record health care funding increase
of 11 percent from the omnibus appropriations bill signed by the
President on February 20, 2003, Public Law 108-7. This increase,
however, did not address the reported $1.9 billion shortfall.
The FY 2004 budget proposes closing 5,000 VA nursing home beds at a time
when older veterans’ needs for nursing home care are growing. VA would
substitute non-institutional alternatives, as well as state and
community nursing home beds for these VA nursing home beds, but does not
request sufficient resources to match the level of capability eliminated
by removing these beds from service. VA also proposes that Congress
double VA’s prescription copayment for some veterans. The Secretary of
Veterans Affairs already has the authority to increase copayments when
necessary without intervening action by Congress, provided the copayment
does not exceed the actual cost for these drugs. In February 2002, VA
more than trebled the prescription copayment amount. The Committee does
not recommend additional increases.
The Administration proposes that Congress impose an annual enrollment
fee of $250 on Category 7 and 8 veterans. The Committee is concerned
about ramifications of such a policy and is opposed to its enactment as
a solution to VA’s recurring financial problems. Other alternatives to
resolving VA’s funding deficits should be exhausted before imposing this
additional cost on veterans. Proposals designed to discourage veterans’
use of services could prove unnecessary, for example, with passage of a
meaningful drug benefit. The Committee recommends an additional $773
million to account for needs associated with retention of nursing home
beds, expansion of alternative programs and maintaining veterans’ access
to care.
The Committee notes that the Secretary of Veterans Affairs has announced
an agreement in principle with the Secretary of Health and Human
Services to execute an agreement under the Medicare Part C program so
that VA facilities with available capacities may participate in a
“VA+Choice” managed care plan for a small number of Priority 8 veterans
now temporarily excluded from direct enrollment in VA health care. Also,
over a quarter million veterans currently enrolled in VA care are
simultaneously enrolled participants in the military TRICARE program;
the VA should actively seek greater cooperation from the Department of
Defense in coordinating benefits for military retirees who are enrolled
as veterans in the VA health care system.
If a private or other public health insurance plan covers a veteran,
whether through a private employer or the Federal government, VA should
have access to that information. The Committee supports the
Administration’s proposal to make accurate insurance disclosure a
requirement and expects to report legislation providing this authority
along with other measures, such as deeming VA a preferred provider for
purposes of receiving payment from managed care organizations. These new
authorities would aid VA’s collections program.
Inflation. – The medical care component of the Consumer Price Index
(CPI) continues to escalate, outpacing all other items in the CPI for
the past seven years. The Bureau of Labor Statistics (BLS) released
inflation rate data in December 2002 that showed the overall health care
inflation rate was 5 percent for calendar year 2002. Within that level,
hospital care inflation was the highest single component at 10.2
percent, followed by prescription drugs and medical supplies at 6
percent. An experimental price index Congress directed BLS to develop
also reveals that persons 65 years of age and over are spending more
than twice as much on health care as the total population. During the
Committee hearing on January 29, 2003, Dr. Roswell testified as follows:
“One of the things that we have determined is that in a typical year,
our expenses increase 6 to 7 percent by new enrollment in Priorities 1
through 7. In addition to that [enrollment growth], increased
utilization, because the veteran population ages, and health care
expenditures and health care utilization increase. With every increasing
year of age, particularly in an elderly population, we have another 2 to
3 percent incremental cost every year. So a 7 percent increase
associated with enrollment in our highest priority groups, coupled with
another 2 to 3 percent of increased utilization costs, coupled with a
conservatively estimated health care inflation rate of 4.5 or 5 percent,
yields a 13 or 14 percent per year increase in the money available to
take care of just our core population of veterans.”
Rising Pharmaceutical Costs. – VA expects to spend about $4.4 billion
this year on its pharmaceutical programs. VA’s budget for prescription
drugs has nearly doubled over the past three years and, at the current
rate of growth, will exceed $7 billion by the end of fiscal year 2008. A
budget growth of such magnitude stems from both higher utilization of
the program by veterans and increased use of new drugs. From December
2000 to December 2002, the Veterans Health Administration reported that
enrolled veterans increased from 4.7 million to 6.7 million, with about
4.7 million expected to be active consumers of VA health care services.
VA should request adequate funding to ensure that it remains capable of
providing state of the art pharmaceutical drug treatment.
Capacity and Demand for Long-term Care Services. – Public Law 106-117,
the Veterans Millennium Health Care and Benefits Act of 1999, expanded
VA's mission to provide and maintain specialized capacities to care for
aging veterans. The Committee has been in regular communication with the
Secretary concerning a noted decline in VA nursing home beds
(approximately 2,000 beds). On May 8, 2002 the Secretary made a
commitment to restore these beds to their prior level, provided that
Congress appropriates an increase in VA’s medical care appropriation for
fiscal year 2003. In the omnibus appropriation approved by Congress on
February 13, 2003, VA received $1.1 billion more than what was requested
by the President for the period.
The
Committee is disappointed by the Secretary’s proposal in this budget to
close thousands of additional VA nursing home beds. VA’s own long-term
care model, based on the medical needs of its users, indicated a need
for 17,000 new nursing home beds by 2020. The Committee does not believe
that VA can replace 5,000 nursing home beds with outpatient programs for
elderly, chronically ill veterans.
VA
has never fulfilled the promise of its landmark mid-1980’s study, Caring
for the Older Veteran. That study recommended large increases in both
inpatient and alternative programs, such as respite, hospice, adult-day
and home-based care, so that VA could approach the needs of World War II
veterans with meaningful, health and end-of-life care programs, on both
institutional and non-institutional bases. This has not been achieved.
In order to aid the Department in maintaining its current nursing home
bed level, the Committee recommends that VA’s budget request be
augmented by an additional $297 million. Furthermore, VA should fund
effective alternatives to long-term care and reopen long-term care
nursing beds which have been closed.
Health Care for World War II Filipino Veterans. – Last year, the House
approved legislation to authorize VA to provide health care to certain
Filipino World War II veterans now legal residents or citizens of United
States. The Administration supported this provision and the Secretary
stated that VA would absorb the $12 million estimated cost of
implementation in the Departments budget. The Committee recommends an
additional $12 million to support this proposal.
Mental Health Programs for Disabled Veterans. – Over the past five
years, the Department has shifted resources and programs away from
institutional mental health care. However, as VA planned new
community-based intensive case management programs, it was understood
that sufficient resources would be preserved to provide an appropriate
level of care for VA’s chronically mentally ill patients.
The
VA Advisory Committee on Seriously Mentally Ill Veterans estimates the
shift in resources from mental health programs may be as much as $600
million. VA has dramatically expanded its primary care clinics. While
the Committee certainly supports the primary care clinics, VA should
partially restore lost support for mentally ill veterans. Again this
year the budget request does not address this need. The VA Program
Evaluation Resource Center maintains a registry of veterans suffering
with psychosis and bipolar disorder that contains 200,000 individuals.
These veterans cannot be sustained medically without intensive efforts.
Due to the nature of their illnesses, most cannot speak for themselves.
Accordingly, the Committee recommends a number of funding adjustments in
the following areas:
1.
Mental health intensive case management teams – The Committee
understands that VA presently operates about 50 intensive case
management teams assigned to aftercare of VA patients with serious and
chronic mental illness. Some of these teams that already had a minimal
staffing complement have recently suffered reductions in staff. A fully
functioning team's annual average direct cost (primarily in staffing) is
approximately $400,000. The Committee recommends an additional $40
million for fiscal year 2004 to fund 100 additional teams for a total of
150 Mental Health Care Intensive Care Management teams to provide
vulnerable veterans better follow-up care and improved coordination of
community based services.
2.
Mental health in community primary care – The Department operates
approximately 650 community based outpatient clinics nationwide. When VA
made the decision to provide better access to community-based primary
care, it did not sufficiently provide for mental health needs in these
clinics. Approximately half of these facilities offer dedicated mental
health services, but the remaining sites do not. The addition of
qualified mental health staff to support effective professional services
in these settings is a way to ensure that mental health care becomes
more accessible and convenient. Adding a small cadre of mental health
professionals at approximately 200 locations (according to their need)
would provide a more complete service in VA community-based clinics. A
$40 million enhancement to mental health capacity would also give VA
better options to care for not only the de-institutionalized chronically
mentally ill, but also to provide new services to veterans with acute
mental health needs who may not otherwise receive adequate care.
3.
Substance-abuse programs – VA Currently cares for 130,000 veterans with
substance abuse problems. Over the past decade, VA shifted its drug
treatment programs from residential care to ambulatory-based programs.
VA has acknowledged in its report under section 1706 of Title 38, United
States Code, that capacity in the substance-abuse disorder programs is
declining. The Committee believes these programs should be restored.
Opioid-substitution programs are insufficiently available in VA
facilities and some metropolitan areas do not provide enough care to
meet the needs of the veteran population. The Committee recommends $20
million in additional funds to address these shortcomings.
Medical Care Collections Fund. – VA is authorized to bill health care
insurers for covered non-service-connected care provided to veterans.
The Department projects medical care collections for 2004 to be $2.1
billion. This would be the largest one-year increase in collections in
the program since Congress authorized it in 1986 – 32 percent above the
estimated end-of-year collections for 2003. The Department is attempting
to achieve this remarkable goal by implementing a revenue cycle
improvement plan and collecting better, verifiable insurance information
sooner in the process of patient care. VA also is pilot testing a
business plan to reconfigure the revenue collection program with
contracted efforts and commercial collections systems using standard
practices.
The
Committee supports the Department’s efforts at improving performance in
first- and third-party collections, but the Committee remains skeptical
that VA can achieve all it promises in fiscal year 2004. If VA fails to
achieve its goal of such a significant one-year increase, veterans will
be denied care to the extent of that failure. The Committee is unwilling
to assume VA will be successful in increasing collections as promised.
Assuming the Department can accomplish a 10 percent increase in
collections in fiscal year 2004 over the current estimate for this year,
the Committee recommends that $363 million be restored to Medical Care
to account for the difference between VA’s budget level and the
practical effect of its actions.
Management Improvements and Efficiencies. – The Department’s 2004 budget
proposes to achieve management savings of $950 million, three times the
level of savings projected for fiscal year 2003, from management
efficiencies and improvements. VA’s plans include implementing a
competitive out-sourcing plan, reforming the health care procurement
process, increasing employee productivity, increasing health resources
sharing with the Department of Defense, and continuing the trend of
shifting patients from inpatient to outpatient levels of care.
The
Committee concludes that VA will be able to achieve only about a quarter
of the management savings it has proposed in this budget. Therefore, the
Committee recommends an additional $625 million for veterans’ medical
care.
Homelessness Among Veterans. – With the passage of the Homeless Veterans
Comprehensive Assistance Act of 2001, the Committee enunciated a goal of
ending chronic homelessness in the veteran population within a decade.
More than a year since enactment of this law, the Committee is not
satisfied with VA’s responsiveness to the mandates of this Act. Among
some of the most effective activities that need additional funding are
VA homeless domiciliaries; VA’s grant and per diem program for community
providers; and the so-called “Health Care for Homeless Vets’
initiative.” VA also funds several programs in mental health and
coordinates with other Federal agencies (principally the Departments of
Housing and Urban Development, and Labor) to address veterans’
homelessness. VA has yet to implement a prison and institutional
outreach-transition initiative and a special needs authority provided in
the Act.
The
Department has made a $5 million commitment to provide health care
services and case management in a VA-HUD-HHS joint venture that would
open 300-400 new beds in sites yet to be announced. VA is prepared to
commit $10 million to provide dental services to homeless veterans as
authorized in the Act. The Department has not made a transitional
housing loan as authorized by 1998 legislation despite a commitment to
do so. The Committee rejects the VA proposal that Congress convert the
transitional housing loan program to a grant program.
The
Act authorized funding of $75 million for the several in-house homeless
assistance programs for fiscal year 2003, but VA is requesting no
funding in its budget. Also, the Act authorized $5 million for homeless
domiciliaries in fiscal year 2003, and an additional $5 million in 2004.
VA made no request for these funds. The Committee recommends that $75
million be added to the VA’s budget to address the still unmet needs of
about one-quarter million homeless veterans.
Medical and Prosthetic Research. – The Department carries out an
extensive array of research and development as a complement to its
affiliations with medical and allied health professional schools and
colleges nationwide. While these programs are specifically targeted to
the needs of veterans, VA research has defined new standards of care
that benefit all Americans. Among the major emphases of the program are
aging, chronic diseases, mental illnesses, substance-use disorders,
sensory losses, and trauma-related illnesses. VA’s research programs are
internationally recognized and have made important contributions in
virtually every arena of medicine, health, and health systems.
The
Secretary has requested a 2004 budget for VA Medical and Prosthetic
Research of $408 million, an increase of $8 million or 2 percent over
the fiscal year 2003 level. The Committee strongly supports an increase
in the research account to $460 million (15%) in 2004, as recommended by
both the Independent Budget as well as the Friends of VA Research
coalitions. The Committee believes this additional funding is needed in
VA’s research programs to keep pace with funding developments in the
Federal biomedical research community. A 16 percent funding increase was
provided in the 2003 omnibus appropriations bill for the National
Institutes of Health. Additional funding of $52 million in VA biomedical
research in fiscal year 2004 would provide coverage for inflation and
permit a small program expansion.
Emergency Preparedness in Bio-Terrorism. – The Department of Veterans
Affairs Emergency Preparedness Act of 2002 mandated VA to establish four
national emergency preparedness centers and an educational curriculum
for medical students and professionals for response to weapons of mass
destruction. The Act authorized $20 million per year for the support of
the centers. Due to unavailability of funds, the Department has yet to
proceed with establishment of the centers. These centers are critical to
enable VA to aid the Department of Defense and other Federal agencies to
contend with the war on terrorism, and even more importantly, to aid VA
in preparing itself to deal with the effects of the use of weapons of
mass destruction. The Committee urges the Committee on the Budget to
include $20 million to support the establishment of these new
bio-terrorism research centers. The Act also authorized the
establishment of an education program to be carried out through VA. The
education and training curriculum would include a program to teach
current and future health care professionals how to diagnose and treat
casualties who have been exposed to chemical, biological, or
radiological agents. The Committee also urges the Committee on the
Budget to include an additional $5 million to support the requirement.
Medical Administration and Miscellaneous Operating Expenses. – For
national program administration, the Secretary proposed an increase in
the Medical Administration and Miscellaneous Operating Expenses (MAMOE)
account of $9.4 million in fiscal year 2004. The budget requests a total
of $87.5 million in MAMOE to provide improved corporate leadership and
support to VHA. Specifically, by providing VHA a basis to increase
staffing in national program administration from the fiscal year 2003
estimated level of 545 to a planned 588, this increase will have a
beneficial effect on the development and implementation of policies,
plans, and broad program activities. The increased funds are intended to
help complete the restructuring of the Office of the Under Secretary for
Health which began in 2002. Part of this restructuring is focused on the
Capital Assets Realignment for Enhanced Services (CARES) process and the
creation of a new Deputy Under Secretary for Health Policy to better
coordinate federal health care benefits between various agencies, and to
enhance the prospects for VA-DOD sharing. The Committee supports $87.5
million as requested for MAMOE.
CARES
and the Continuing Needs of Veterans. – VA is continuing its initiative
to identify the most effective and efficient use of its infrastructure
in health care delivery to veterans. The Committee held a number of
hearings during the 107th and earlier Congresses dealing with VA’s
capital assets. VA hospitals were primarily built or converted after
World War II to rehabilitate and care for wounded, sick and traumatized
soldiers, sailors, airmen, and marines. For the past thirty years VA has
gradually changed its health care approach from an institutional
provider of physical medicine and rehabilitation, long-term psychiatry,
and restorative care to that of an outpatient and acute primary care
provider to serve an older population with chronic illnesses. The
capital infrastructure built for its previous approach does not easily
lend itself to VA’s new delivery model.
Even
though VA’s CARES process will take several years to complete, the
Committee strongly believes that VA’s most pressing capital
infrastructure needs must be addressed. Due to the CARES process, in
recent years VA has proposed few construction projects.
Outside consultants and VA’s own reports show a growing need and rising
backlog of major and minor projects. For example, a 1998 Price
Waterhouse report suggested VA, in proportion to the value of its $35
billion infrastructure, should be investing in the range of $700 million
to $1.4 billion annually on replacement and modernization projects. A
second consultant report disclosed dozens of VA patient care buildings
at the highest level of risk for earthquake damage or even collapse.
Another report revealed $57 million in needed projects to protect
women's privacy in VA health facilities.
Major
Construction Projects. – In the 107th Congress, the Committee authorized
nearly $800 million in major medical facility construction needs, but
little of this funding was appropriated. Last year, the Department
advised Congress of its major construction priorities, as follows:
1.
Palo Alto, CA: This project would include seismic corrections,
correction of patient privacy deficiencies, correction of fire safety
deficiencies, and functional improvements for the Mental Illness
Research, Education and Clinical Center.
2.
Cleveland, OH: This project would include the replacement of all
mechanical, electrical, and architectural systems installed in this
facility built in 1961.
3.
San Francisco, CA: This project would seismically upgrade the main
inpatient building at the San Francisco VA Medical Center.
4.
Anchorage, AK: This project would consolidate the Alaska Veterans
Affairs Health Care System and Regional Office at Elmendorf Air Force
Base, Alaska.
5.
West Los Angeles, CA: The upgrade of Building 500 would strengthen
braced frames below the second floor, strengthen collector plate
connections to the braced frames, and add new collector plates to
transfer loads in the central core area to the braced frames located at
the wings.
6.
West Haven, CT: This project would renovate three inpatient wards to
correct for patient privacy inadequacies as well as consolidate
associated support services.
7.
Long Beach, CA: Building 7 of the VA Long Beach Medical Center would be
seismically upgraded and retrofitted.
8.
Palo Alto, CA: Renovations would include seismic corrections, correction
of fire safety deficiencies, and functional laboratory improvements in
areas formerly occupied by inpatient psychiatric wards. Building 205,
Menlo Park campus, would be demolished. Most research personnel would be
relocated.
9.
Tampa, FL: This project would relocate three Spinal Cord Injury (SCI)
inpatient wards and ancillary support functions to a new SCI building.
10.
VISN 4 (PA, WV, NJ, DE, OH): This multi-facility project would renovate
and expand outpatient clinics at seven different medical centers. Six of
the eight projects would renovate and expand primary and specialty care
clinic areas. The other two projects would expand outpatient ambulatory
surgery and outpatient day programs.
11.
Beckley, WV: This project would consist of design and construction of a
nursing home care unit with 120 beds.
12.
Lebanon, PA: This project would reconfigure two floors at the VAMC which
is currently unfit to house inpatients. A new elevator shaft and
entrance would be built to meet the needs of the patients.
13.
San Diego, CA: This project would seismically strengthen the Medical
Center by adding two new exterior unbonded braced frames at the end of
each building wing, replacing the braces in all of the existing braced
frames with new unbonded braces, and adding new collector elements.
14.
Hines, IL: A blind rehabilitation center (authorized and appropriated in
fiscal year 2002) would be relocated and modernized.
15.
San Juan, PR: The air conditioning would be repaired and overhauled in
conjunction with asbestos abatement and further seismic protections in
three areas in the existing basement, first, and second floors.
16.
VISN 6 (WV, VA, NC): This multi-facility project would renovate five
VAMCs’ Mental Health and Spinal Cord Injury/Dysfunction Units. The
project includes privacy improvements, hazardous materials abatement,
window replacement, and HVAC and utilities upgrading.
17.
VISN 4 (PA, WV, NJ, DE, OH): This multi-facility, VISN-wide project
would renovate and upgrade seven major VA medical centers for patient
safety and patient/employee welfare.
18.
Atlanta, GA: The renovations would correct patient privacy issues,
improve staff efficiencies, improve the functional layout, and meet ADA
requirements and female patient issues.
19.
Tampa, FL: This project would provide approximately 1,170 additional
parking spaces for the Tampa VA Medical Center.
20.
Washington, DC: This project would allow for three new clinics to
improve patient flow between primary care and specialty care clinics.
While
the House passed an authorization measure supporting the completion of
many of these high-priority projects, only the Hines, IL project on the
above list received appropriations in fiscal year 2002. No funds for any
of the other projects were appropriated in fiscal year 2003.
The
Committee understands that the sale of the underutilized VA Lakeside
hospital in Chicago was expected to be a direct source of funding to
improve the West Side VA facility as a key acute inpatient facility for
the veterans of Chicago. VA indicates in the budget that CARES will
provide the funding for the project which is now estimated at $98.5
million, considerably less than the previous estimate.
The
Colorado University School of Medicine plans a major relocation of all
its facilities to the site of the closed Fitzsimons Army Hospital. VA is
considering whether to recommend replacement of the Denver VA Medical
Center, a 50-year-old structure now co-located with the Colorado medical
school as a part of that relocation. These two meritorious projects
alone, the West Side tower and the new Denver VA Medical Center, are
estimated to cost nearly $500 million.
In
addition, there are many other worthy projects high on VA’s established
priority list that lack funds. Many are medical centers that will not be
affected significantly by CARES and that are needed to continue
providing good health care to veterans. The Committee will further
explore these needs and will recommend projects to meet them.
Consequently, the Committee recommends an additional amount of $500
million for the major medical facilities construction account in fiscal
year 2004.
State
Home Grants Programs. – In 47 states, 114 homes for veterans provide
nursing, domiciliary care, and adult day care to over 21,300 veterans
whose care is coordinated with the Department of Veterans Affairs.
States commit to pay 35 percent of the construction costs of projects
for state home facilities, and to bear most of the cost of facilities
operations and health care that exceeds amounts contributed by VA.
Fiscal year 2003 applications totaling $287 million for new construction
and renovation grants to state veterans homes are pending in the
Department. A new round of requests will be solicited in April 2003 for
fiscal year 2004 awards.
Congress revised the state home program in Public Law 106-117 to provide
a higher priority for critically needed renovations in existing state
homes, especially those projects involving fire and life safety
improvements. Prior to enactment of P.L. 106-117, these long-delayed
projects were given a lower priority for funding than grants for
constructing new state home beds. Although VA has implemented the
provisions of the Act affecting the ranking criteria for funding
projects, renovation projects remain 63 percent of the overall backlog
of unfunded projects. The budget requests $102 million to support the
grant program, a two percent increase over the fiscal year 2003
appropriated level. The Committee recommends additional funding of $30
million to support a more adequate VA response to the growing demand for
long-term care facilities and to modernize and renovate existing
facilities in the states’ inventories. Provision of these funds will
support the establishment of approximately 360 new nursing home and
domiciliary beds in state veterans’ homes.
Veterans Benefits Administration
Compensation and Pension Service. – The ability of VA to provide
accurate, timely and quality benefits delivery is dependent on a number
of factors, including an adequate number of properly trained staff,
effective business process and computer modernization initiatives,
accountability measures, inter-departmental cooperation between the
various VA administrations and military service departments, including
the National Personnel Records Center and the Center for Unit Records
Research, and assistance from the veterans service organizations.
Entitlement benefits are provided to 2.5 million veterans, more than
316,000 survivors, and 1,115 children.
The President is requesting $29.9 billion and 8,586 FTEE to support the
compensation and pension entitlement benefits programs. This represents
a $3.4 billion dollar increase over the enacted fiscal year 2002 level,
but a decrease of 190 FTEE is also proposed. The Committee is concerned
that a decrease in FTEE could detract from continued improvements in
claims processing. The Committee notes that a number of VBA employees
have been called to active military service and that additional
activations may adversely impact claims processing.
Both the President and the Secretary have made timeliness and quality in
claims adjudication a top priority, and have set a goal of adjudicating
claims within 100 days by the summer of 2003. In December 2002, the
average days pending for a rating-related claim were 168, reduced from a
high of 203 days in January 2002. Additionally, the reported national
accuracy rate increased from 78 percent in 2001 to 80 percent in fiscal
year 2002, with a target of 90 percent in 2004. VBA decreased its claims
workload from 344,183 rating-related claims at the end of September 2002
to 328,566 as of December 2002.
In October 2001, the VA Claims Processing Task Force made 34
recommendations to improve claims processing. Of the 66 action items, 38
have been implemented – 28 completely and 10 which are being monitored
to ensure that the goals of the recommendations are being met. The
Committee recommends $12 million for VBA to implement the medium and
long-term recommendations, to include hiring nurses and other
medically-trained individuals, including veterans who have worked as
medical corpsmen or in similar military specialties, to work on
compensation and pension claims, to establish a more permanent claims
adjudication training cadre, and to out-base rating specialists at 70 of
the largest VA medical centers.
VBA Staffing for all Business Lines. – The Committee commends VBA for
its recent improvements in claims adjudication; however, the Committee
remains concerned that FTEE levels across the board are actually below
the fiscal year 2002 level. The Committee recommends an additional $17
million to sustain employment and other critical operational process
improvements within VBA’s major business lines: compensation, pensions,
education, housing, vocational rehabilitation and employment, insurance
and burial.
Regional Office Staffing. – The Committee is concerned about the
apparent lack of a long-term strategy for addressing the claims needs of
veterans served by poorly performing regional offices. The Committee
expects that VA will clearly articulate a plan for addressing this
critical problem and will effectively use any funding for additional
personnel to improve performance. The Committee also expects that VA
would closely monitor the quality and productivity of any regional
office that receives additional funding or staff.
Homeless Veterans Coordinators. – Public Law 107-95 requires the
Secretary to ensure that there is at least one full-time employee
assigned to oversee and coordinate homeless veterans programs at each of
the 20 regional offices that the Secretary determines have the largest
homeless populations within the regions of VBA. The Committee
understands that, although the offices have been designated and
personnel nominally assigned as coordinators, some of these employees
have multiple responsibilities and are not able to devote full-time
efforts to addressing the needs of homeless veterans. The Committee
expects that employees will be assigned to perform the oversight and
coordination activities mandated by Public Law 107-95 on a full-time
basis and that general operating expense funding for fiscal year 2004
will be used to support the positions.
National Cemetery Administration
The President is requesting $156 million for (1) National Cemetery
Administration (NCA) operation and maintenance of 124 national
cemeteries and 33 soldiers’ and sailors’ lots in private or municipal
cemeteries, monument sites and confederate cemeteries, and (2) VBA
adjudication of veterans’ death benefits. The President’s budget request
supports 1,588 FTEE in NCA – an increase of 69 FTEE from the Fiscal Year
2003 request – and 177 FTEE in VBA, an increase of two FTEE over last
year’s request.
The President is requesting $108.9 million to develop new national
cemeteries, create additional gravesites at existing national
cemeteries, and establish/expand state veterans cemeteries. The funds
would be used to develop and/or expand cemeteries in the following
locations:
• Detroit area, phase one development of a new national cemetery;
• Ft. Snelling, Minnesota, expansion of and improvements to national
cemetery; and
• Barrancas National Cemetery, Florida, expansion of and improvements to
national cemetery.
The President’s request does not provide funding for 928 full-scale
cemetery restoration and repair projects, estimated to cost $279
million, or funding for development of new national cemeteries beyond
those currently in development in Pittsburgh, Sacramento, Southern
Florida, and Atlanta. A study mandated by Public Law 106-117 of future
burial needs determined that based upon 1990 census data, NCA would need
to develop 31 new cemeteries by 2020 to meet the burial needs of
veterans and their survivors. NCA is currently reevaluating that
recommendation with recently available data from the 2000 census.
The National Cemetery Administration (NCA) maintains almost 2.5 million
gravesites at 124 national cemeteries in 39 states, the District of
Columbia and Puerto Rico. Of these, 61 have available, unassigned
gravesites for burial of both casketed and cremated remains; 26 will
only accept cremated remains and the remains of family members for
interment in the same gravesite as a previously deceased family member;
and 33 are closed to new interments, but may accommodate family members
in the same gravesite as a previously deceased family member.
Occupied graves maintained by NCA are projected to increase from
2,380,500 in fiscal year 2000 to over 2,998,100 in 2008. VA is
continuing to develop new cemeteries in areas not presently served by
NCA: Atlanta, Georgia; Detroit, Michigan; Fort Sill, Oklahoma; Miami,
Florida; Pittsburgh, Pennsylvania; and Sacramento, California. However,
an independent study – mandated in Public Law 106-117 – of veterans’
burial needs based on VA planning guidelines found that VA should
establish 31 additional cemeteries through 2020 to provide service to 90
percent of veterans within 75 miles of their homes. This assumed a
veteran population threshold of 170,000. This study was based upon data
from the 1990 census. The Committee understands that the report is being
updated to reflect 2000 census data. Upon completion of that update, the
Committee may direct the Secretary to begin the planning phase for the
construction of seven new veterans’ cemeteries in those areas, with a
veteran population threshold of 150,000, that are deemed most in need
between 2005 and 2020.
The Committee recommends a five-year, $300 million restoration and
improvements project at existing cemeteries. The Committee recommends an
initial, first-year appropriation of $65 million for fiscal year 2004 to
address this problem.
Board of Veterans’ Appeals
The President is requesting $50.4 million and 448 FTEE to support its
operations at the Board of Veterans’ Appeals (the Board). In fiscal year
2002, the Board received 28,158 appeals and decided 17,231 appeals: 27.7
percent were granted in the veterans’ favor, 19.3 percent were remanded
to a regional office for further development, and 49.9 percent were
denied. The Committee recognizes that due to a number of factors,
including the large number of remands following enactment of legislation
mandating the VA’s “duty to assist” claimants, the number of appeals
decided during fiscal year 2002 was unusually low. Based upon new
appeals filed during 2002, the Committee expects that the number of
decisions will return to more historic levels (between 30,000 and
40,000), assuming adequate staffing at the Board during future fiscal
years.
During the past year, the Board has begun to assist in developing some
claims rather than remanding all of them to the regional offices. The
Board has converted 31 attorney positions to support staff positions to
staff the Evidence Development Unit. It appears the loss of these
attorneys has had a significant impact on the Board’s capacity to
produce final decisions in a timely manner. According to the Fiscal Year
2002 Report of the Board Chairman and the Administration’s budget
request, without additional FTEE, the Board will not be able to keep
pace with the additional appeals it receives. With current staffing and
a 25 percent productivity increase projected in the budget request, the
Board is expected to develop a backlog of 6,000 to 8,000 appeals per
year. However, no additional funding has been requested. The Committee
expects that the Board will manage its operations to fulfill its primary
function of deciding administrative appeals without developing an
unacceptable backlog.
DEPARTMENT OF LABOR
Veterans’ Employment and Training Service
The Jobs for Veterans Act, Public Law 107-288, redesigned the nationwide
delivery system of veterans’ employment and training services based on
themes of incentives, results, accountability, and flexibility. In early
December 2002, the Department of Labor (DOL) established a comprehensive
work group of state and federal representatives to draft a broad plan
for implementing the new law. The Committee commends this prompt action.
The states reported an average Entered Employment Rate (percentage who
register for work with the Job Service or a One-Stop Career Center and
gain employment) for veterans for the first three quarters for fiscal
year 2002 (October 1, 2001 – June 30, 2002) of 41 percent. For fiscal
years 1999, 2000, and 2001, the Entered Employment Rate for veterans
averaged about 30 percent. The Committee views the improvement in
Entered Employment Rate as a promising start.
The most recent DOL-published unemployment rate data are as follows:
Average 2002 Unemployment Rates for Male and Female Veterans
Age Male Veterans Female Veterans
All Ages 4.7% 5.0%
20-24 10.8% 13.3%
25-34 5.7% 5.5%
35-44 5.3% 5.0%
45-54 4.6% 3.4%
55-64 4.2% 2.5%
Average 2002 Unemployment Rates for Black and Hispanic Veterans
Male/Female Black/Hispanic All Ages 20-24
Black Male 7.0% 17%
Black Female 6.6% 23.9%
Hispanic Male 4.7% 8.7%
Hispanic Female 9.9% 21.6%
Further, according to the Bureau of Labor Statistics, 50.7 percent of
all disabled male veterans were in the labor force in August 2001. The
unemployment rate for disabled male veterans was 4.4 percent. The
unemployment rate for “special” disabled male veterans (rated at least
30 percent disabled by VA) was 8.5 percent. The Committee notes Public
Law 107-288 authorizes the Secretary of Labor to create a “weighted”
placement system that provides greater job placement credit for
harder-to-place veterans, such as those who are disabled or have other
unique needs.
The Administration is requesting $219,993,000 for VETS for fiscal year
2004: $162.415 million for state grants for Disabled Veterans Outreach
Program Specialists and Local Veterans Employment Representatives,
$29.028 million for federal program administration, $2 million for the
National Veterans’ Employment and Training Services Institute (NVESTI),
$19 million for the Homeless Veterans’ Reintegration Program (HVRP), and
$7.55 million for the Veterans Workforce Investment Program. The fiscal
year 2003 appropriation for VETS is $214,212,000. The Committee
recommends an additional $1 million for the NVESTI. Congress authorized
funding of $50 million for HVRP in Public Law 106-117.
The Committee believes that the HVRP is one of the most cost effective
job placement programs in the Federal government. During fiscal year
2002, DOL competitively awarded 102 grants: 43 to non-profit
organizations, 11 to faith-based organizations, and the remainder to
state and local agencies. These grants resulted in the enrollment of
12,142 homeless veterans in the program. Of those enrolled, 6,605
successfully entered employment, despite in many cases having to
overcome major obstacles to being employable. The Committee accordingly
recommends an additional $31 million for HVRP.
LEGISLATION THE COMMITTEE MAY REPORT
WITH DIRECT SPENDING IMPLICATIONS
Montgomery GI Bill. – The current Montgomery GI Bill (MGIB)-Active Duty
basic benefit is $900 per month, effective October 1, 2002. This benefit
increases to $985 per month effective October 1, 2003, per Public Law
107-103, enacted December 27, 2001. The Committee recommends an increase
in the MGIB to $1,200 per month effective October 1, 2004. Against the
current baseline, the Committee estimates this measure would cost about
$405 million in 2004, and $2.63 billion over five years. This increase
would represent an interim step toward implementing the bipartisan
Servicemembers and Veterans Transition Assistance Commission
recommendation for an MGIB that pays tuition, fees, and a monthly
subsistence allowance, thus allowing veterans to pursue enrollment in
any educational institution in America limited only by their
aspirations, abilities, and initiative.
Based on data from the College Board’s “Trends in College Pricing for
the 2002-2003 Academic Year,” the Committee concludes that the current
monthly basic MGIB benefit would need to be $1,496 per month for a
veteran-student to be able to pay the average tuition and expenses as a
commuter student at a four-year public college for academic year
2002-2003. The College Board’s 2002-2003 academic year statistics
reflect that average annual tuition and fees, books and supplies, room
and board, transportation and other expenses for attending a four-year
public college amount to $13,463 for a commuter student and $12,841 for
a student who lives on campus. Four-year private institutions cost
$27,695 and $27,677, respectively. With the current basic MGIB annual
benefit of $8,100, however, a veteran is expected to pay tuition, fees,
room and board, and other living expenses during the academic year. The
disparity between these ever increasing costs and a veteran’s ability to
pay for them using the MGIB benefits seems clear.
The Committee also recommends repeal of the current $1,200 pay reduction
under the MGIB-Active Duty program. The Committee estimates the cost of
the repeal would be $227 million in the first year and $1.18 billion
over five years. This repeal was a recommendation of the Congressional
Commission on Servicemembers and Veterans Transition Assistance. The
Committee notes the MGIB is the only form of federal student financial
aid in which the student is required to furnish $1,200 in cash
“up-front” to establish eligibility for the program.
Congress has not updated the on-the-job training and apprenticeship
programs under the MGIB and other VA educational assistance programs
essentially since World War II. The Committee may report legislation to
update this program to reflect on-job training and apprenticeship in
business and industry today. Such legislation may incur limited costs
against the baseline of $3 million or less per year.
Option of $50 monthly MGIB pay reduction. – A servicemember’s pay is
reduced $100 per month for the first 12 months of active-duty service to
establish eligibility for the MGIB. The Committee views the $1,200 as a
burdensome fee that discourages veteran participation in the program. No
other federal education program charges such a fee. The Committee
recommends legislation to give servicemembers the option of a pay
reduction of $100 per month for 12 months or $50 per month for 24
months. The Committee estimates the cost to be $101 million in 2004 and
$101 million over five years.
Access to Entrepreneurship. – The Committee recommends legislation to
help veterans start small businesses. The legislation would: (1) allow
veterans to use VA education benefits to enroll in non-credit small
business courses sponsored by Small Business Development Centers and
others, (2) liberalize current law language to make it easier for
graduates of a VA vocational rehabilitation program to go directly into
business for themselves, and (3) make revisions to current law to allow
disabled veterans a greater opportunity to compete for contracts with
the Federal government. The Committee estimates costs of $2 million or
less per year.
Dependency and Indemnity Compensation for Surviving Spouses Who Remarry
after Age 55. – Dependency and Indemnity Compensation (DIC) provides a
partial substitute for the economic loss suffered by the survivors upon
the service-connected death of a veteran. For a survivor to be eligible,
the veteran must have died during military service, from a
service-connected disability, or have had a service-connected disability
that was rated 100 percent for 10 years prior to death from a
non-service-connected condition. DIC terminates upon the remarriage of a
surviving spouse, although benefits may be restored in the event that
the subsequent remarriage ends in death or divorce. DIC is the only
federal annuity program that does not allow a surviving spouse who is
receiving compensation to remarry at an older age and retain the
annuity. Public Law 107-330 provided that a surviving spouse, upon
remarriage after attaining age 55, would retain health insurance under
the Civilian Health and Medical Program of the Department of Veterans
Affairs (CHAMPVA). The Committee recommends legislation to allow a
surviving spouse who remarries after age 55 to retain DIC, education,
and home loan benefits. In 2002, the Congressional Budget Office
estimated the cost of this eligibility change to be $38 million in 2003,
$368 million over five years, and $779 million over ten years.
Vocational Training for Non-Service-Connected Pension Recipients under
Age 50. – The non-service-connected disability pension program provides
financial help to more than 348,000 low-income veterans. To be eligible,
veterans must have served on active duty for at least 90 days including
at least one day of wartime service, and be totally and permanently
disabled for employment purposes as a result of disability not related
to their military service, or over age 65. To ensure the availability of
vocational training to newly eligible VA non-service-connected pension
recipients age 45 or younger, the Committee recommends legislation to
reinstate a pilot program that expired in December 1995. The program
would afford pension recipients the opportunity to receive training,
along with a stipend, in order to return to the job market rather than
requiring these veterans to rely solely on the VA pension program for
their financial well being. The Committee estimates the cost to be $1
million in the first year and $9 million over 5 years.
Accrued Benefits for Veterans’ Survivors. – Current law restricts a
surviving spouse to receiving no more than two years of accrued benefits
if a veteran dies while a claim for VA periodic monetary benefits (other
than insurance and servicemen’s indemnity) is being processed. VA is
making efforts to lower claims processing times, but it can sometimes
take more than two years to correctly determine and adjudicate a claim
for disability compensation or non-service-connected pension benefits.
The Committee recommends legislation to repeal the two-year limitation
so that the veteran’s survivor may receive the full amount of the award
and not be penalized if VA does not process claims in a timely manner.
The Committee estimates the cost to be $1 million per year.
Special Compensation for Former Prisoners of War. – The Committee
recommends legislation to establish a three-tiered special monthly
pension to former prisoners of war, to be based upon the length of
captivity. Those who were detained 30-120 days would receive $150 per
month, those detained 121-540 days would receive $300 per month, and
those detained 540 or more days would receive $450 per month. In 2002,
the Congressional Budget Office estimated a direct spending increase of
$24 million in 2003, $345 million over five years, and $634 million over
ten years for special compensation to former prisoners of war. The
Committee also recommends legislation to extend VA dental benefits to
all former prisoners of war, regardless of their length of captivity.
The Congressional Budget Office estimates this program expansion would
cost less than $500,000.
National Cemetery Administration. – As discussed above, the Committee
may direct the Secretary to begin the planning phase for the
construction of seven new veterans’ cemeteries in those areas, with a
veteran population threshold of 150,000, that are deemed most in need
between 2005 and 2020. In addition, the Committee recommends a
five-year, $300 million restoration and improvements project at existing
cemeteries to ensure that national cemeteries are dignified and
respectful settings.
Increase Auto Allowance and Specially Adapted Housing Allowance for
Severely Disabled Veterans. – VA is authorized to provide a one-time
reimbursement to severely disabled veterans of $9,000 for the cost of an
automobile. According to the American Association of Motor Vehicle
Administrators, the average cost of a new automobile was estimated to be
$21,605 in 2001. The Committee recommends legislation to increase the
auto allowance to $11,000. VA also provides a grant to offset the cost
of modifying a home to accommodate a veteran’s disabilities. The
Committee also recommends legislation to increase the grant for
specially adapted housing for severely disabled veterans to $50,000 and
for less severely disabled veterans to $10,000. The Committee estimates
combining these two proposals to cost $6 million in 2004, $34 million
over 5 years, and $74 million over 10 years.
Vendee Loans. – The Committee opposes VA’s January 23, 2003, decision to
administratively terminate the vendee loan program. When a purchaser
agrees to buy a foreclosed VA home, VA often offers to finance the sale
by establishing a vendee loan to encourage the prompt sale of the home.
Vendee loans are made at market interest rates and often require a down
payment. Borrowers are assessed a 2.25 percent funding fee that is paid
in cash.
The Committee views vendee loans as an important tool to obtain a higher
return on property sales, which reduces the overall cost of program
operations. VA makes, and subsequently sells, $800 million to $1.2
billion in such loans each fiscal year. There is an ample body of
empirical data indicating that offering vendee financing is cost
effective. In March 2002, Booz, Allen, and Hamilton, Inc., independently
analyzed the cost effectiveness of vendee loan financing. Their report
indicated a savings to the government of $16 million in fiscal year 1999
due to vendee financing. The Committee believes the vendee loan program
is based on sound business principles and recommends legislation to
reinstate the program.
Guaranteed Health Funding. – Because VA health care discretionary
appropriations have not kept pace with the needs of veterans enrolled in
the VA health care system, H.R. 5250 was introduced in the 107th
Congress to establish a funding formula to guarantee sufficient annual
funding to meet the medical care needs of these veterans. The bill was
intended to stabilize VA’s health care financing and promote more
efficient use of funds.
The Committee recommends to the Committee on the Budget that it convert
the veterans health care account from discretionary to mandatory
funding. The Committee believes the conversion would be essentially
budget neutral because the increase in mandatory funding would be offset
by a decrease in current discretionary appropriations for veterans
health care. The continuing health care of veterans would be funded
through a new financing system similar to the financing systems used for
the military TRICARE for Life program, the Medicare program and the
Federal Employees Health Benefits Program. In none of these programs has
the funding formula itself been the source of increased costs. Veterans
deserve a health care program with an equally reliable funding
mechanism.
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