In years past, Bush administration proposals to charge low-priority VA health care users a $250 annual enrollment fee and higher co-payments on prescription drugs were declared “dead on arrival” on Capitol Hill.

Not this year.

The initiatives, to boost VA revenues by $424 million, appear to have survived a first vigorous round of attacks by veterans’ service organizations. Credit — or blame — new, more fiscally conservative chairmen of the House and Senate veterans affairs committees and a strategy to paint the VA enrollment fee as “only fair” given Tricare enrollment fees for retirees.

Both the change in tone by chairmen and the “equity” argument for VA enrollment fees were on display during budget hearings this month.

The Department of Veterans Affairs budget once again seeks two cost-sharing increases for VA health-care users in priority categories 7 and 8, veterans who have no service-connected disabilities and incomes above geographic poverty thresholds set by the federal government.

Besides paying a $250 enrollment fee, 2.4 million Priority 7 and 8 enrollees would see co-payments on VA-filled prescriptions rise to $15, from $7, for a 30-day supply. VA estimates that 213,000 would disenroll rather than pay the higher fees.

Jim Nicholson, the new secretary of veterans affairs, described the enrollment fee as “similar to the fee legally required of military retirees enrolled in the Tricare system.” Given that military retirees must have served at least 20 years, and VA enrollees “as few as two years,” Nicholson suggested the VA fee is “more justified.”

To the criticism that $250 a year is unaffordable for many veterans, Nicholson said no Priority 7 and 8 veterans are destitute, and Priority 8 veterans have incomes above a geographic means test that, for those with no dependents, ranges from $25,000 in low-cost areas up to $71,000 in pricey areas, such as San Francisco.

Sen. Larry Craig, R-Idaho, new Senate committee chairman, said that “such proposals have been declared dead on arrival perhaps even before … analyzed. I do not intend to take that approach.” But he conceded the new VA budget is “considerably less friendly then it was during the flush years of the past four.”

The cost-saving initiatives, particularly affecting Priority 7 and 8 veterans, drew vehement opposition from veterans’ service organizations. But at the House VA committee hearing the next day, new chairman Rep. Steve Buyer, R-Ind., embraced Nicholson’s argument for enrollment fees.

“We’ve got an inequity in the system that we’re going to need to address,” Buyer said.

Nicholson presented a chart showing that military retirees under 65 pay $230 for individual Tricare Prime coverage and, thereafter, monthly Medicare Part B premiums now set at $78.20.

At both hearings, Nicholson acknowledged that VA’s proposed $70.8 billion budget could be $1.8 billion short if assumptions about new efficiencies and streamlining aren’t met and if Congress fails the cost-savings initiatives including limiting VA long-term care to veterans with service-connected disabilities and cutting VA nursing home capacity and state grants.

Neither Craig nor Buyer criticized VA assumptions, however. Both mentioned that, in a tight, wartime budget environment, VA health care and services must focus on the most worthy and most needy of veterans.

Democrats joined with representatives of veterans’ groups to lambaste the budget and its cost-savings initiatives, calling them dishonest, aimed at driving veterans from the health care system, and doomed.

Sen. John Rockefeller of West Virginia predicted the enrollment fee and drug co-pays will get an “automatic rejection, I think, in both houses.” Daniel Akaka of Hawaii, the ranking Democrat on the Senate panel, said the administration seeks to shift routine cost growth in health services “onto the backs of veterans.”

In one testy exchange, Rep. Bob Filner, D-Calif., suggested Nicholson was abandoning the VA secretary’s traditional role of veterans’ advocate.

“You’re not going to make the efficiencies and you know it. You’re not going to get the legislative proposals and you know it. You’re going to have less money than you want or need,” Filner said. “You ought to just state that.”

Buyer pressed representatives of seven veterans’ groups to acknowledge that an inequity in enrollment fees exists between military retirees and VA health care users. None did.

Richard Jones of AMVETS described the targeted veterans as heroes “who answer our nation’s call and, with God’s grace, return from service whole and able to continue their lives without disabling injuries.” Giving them access to VA health care, unencumbered by annual fees, “is the least our nation can do for those on whom America depends to defend her liberty.”

But Buyer said co-pays and deductibles are effective tools to “modulate” health service usage. He said he felt no such “pushback” from retiree groups when Congress set Tricare fees.

Critics blamed administration priorities. Jones pointed to the $1 billion, four-year program passed last year to pay health-care costs of illegal aliens.

Sen. James Jeffords of Vermont said the White House would rather cut veterans benefits than roll back “expensive tax cuts given to the richest segment of American society.”

To comment, write Military Update, P.O. Box 231111, Centreville, VA 20120-1111, e-mail or visit

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