VA Bill Means a New $50 Billion Entitlement
Policy + Politics

VA Bill Means a New $50 Billion Entitlement

Wikimedia Commons

Congress is rushing to pass Veterans Affairs Department spending legislation to respond to the patient scheduling scandal that may have cost the lives of dozens of veterans who were intentionally kept off an official electronic appointment list and didn’t receive the prompt treatment they required.

Last week, the House and Senate swiftly and overwhelmingly approved bills to greatly expand veterans’ medical coverage, including allowing veterans living more than 40 miles from a VA facility and having trouble scheduling an appointment to turn to private doctors and health care facilities that accept Medicare patients.

Related: The Government's Next Big Health Care Experiment

The legislation would also grant the VA authority to spend $500 million of its budget to hire more doctors and nurses to expand services, as well as strengthening the VA’s hand in firing or demoting incompetent administrators.

While there is near political unanimity on the need for the legislation, some experts warn the long-term budget implications are getting short shrift.

Unless lawmakers are more careful in hammering out the final version of the legislation, they say, Congress may be en route to creating a new open-ended entitlement costing an additional $50 billion a year, based on a preliminary and partial Congressional Budget Office estimate.

Related: Disapproval of Obama’s VA Management Could Hurt Dems in Midterms    

That would come on top of the $44 billion the VA currently spends each year for veteran health care services. In effect, the legislation would eventually double the government’s annual spending for those services.

For now, Congress is treating the alternative private care provision as short term, designed to be phased out by 2016 when the planned expansion of VA medical staff is completed. However, Congress will likely come under pressure from veterans groups and others to make the private care alternative permanent – with serious budgetary implications.

The Committee for a Responsible Federal Budget, a government-spending watchdog, says that if the program were permanently extended, fully phased in and adjusted for inflation, the overall cost would exceed $500 billion in the next decade.

Related: Shinseki Falls on Sword in VA Scandal

“The provision could create an entitlement bigger than Medicare Part D when it was enacted,” the group said in a new analysis. “For the cost of making this new entitlement permanent, policy makers could fully repeal the defense sequester.”

Senate Veterans Affairs Committee Chairman Bernie Sanders (I-VT) and Sen. John McCain (R-AZ), the chief authors of the legislation, said last week that the government has a moral obligation to do all it can for those who have served the country.

“If anyone disagrees with taking care of veterans, they shouldn’t send them off to war in the first place,” Sanders told The Washington Post.

Sen. Jeff Sessions of Alabama – one of only three Senate Republicans who opposed the measure on the final vote – said he was concerned Congress was breaching existing budget constraints and adding to the deficit by declaring “emergency” conditions, MSNBC reported.

Related: Lots of Ideas, No Quick Fix for VA Health Care

“There are some good things in the bill,” said Sessions, the ranking Republican on the Senate Budget Committee, according to the report. “But … I cannot suggest to my colleagues that the budget violations now before us should be waived. They should not.”

Congress has declared “emergencies” over the years to fund hurricane disaster relief, drought, massive flooding and other calamities by adding to the deficit instead of seeking offsetting cuts elsewhere. The Senate had to vote to waive so-called pay-go rules to approve the bill without offset cuts – something 19 Republicans voted against.

Usually, bills granting an agency new authority are left to the Appropriations Committee to determine how much to spend. In this case, the VA legislation grants an unlimited mandatory appropriation designated as “such sums as are necessary.”

“That spending would proceed automatically without any further action by Congress or oversight from the Appropriations Committee,” according to the Committee for a Responsible Federal Budget analysis.

“The ‘emergency’ designation is for sudden, unforeseen, and temporary needs – none of which define this situation – not a tool for politicians who are unwilling to pay the bills,” said CRFB president Maya MacGuineas in a statement. “Washington is once again looking for the easy way out.”

Because Congress has moved so quickly to pass legislation and get it to President Obama, CBO had little time to evaluate the bill’s long-term cost.

CBO said in its preliminary report that “the magnitude of the budgetary effects of the bill is highly uncertain” and that “a significant number of veterans could receive new and expanded health care benefits” under the proposed law.

“The VA currently has about 8.4 million veterans enrolled in its health care program,” said CBO. “Of the remaining 13 million veterans, CBO estimates that about eight million qualify to enroll in VA’s health care program but have not” done so.

Related: VA Scandal Exposes Single-Payer Health Care Flaws

“CBO expects that some of those people will choose to enroll because of the improvement in access to health care through VA,” the report continued. “Most of the costs incurred to provide that care would be for care financed by other payers, including Medicare.”

The VA wait list scandal has prompted swift bipartisan action by Congress like few other issues in recent memory. The controversy led to the resignation of VA Secretary Eric Shinseki and the firing of other senior officials. The scandal first erupted after reports by CNN that at least 40 U.S. veterans might have died while waiting for medical appointments through a VA facility in Phoenix.

It was later discovered that more than 100,000 veterans nationwide were kept off waiting lists for medical appointments. Acting VA Secretary Sloan Gibson disclosed that at least 18 Arizona veterans died while awaiting doctor appointments, though it was unclear if those deaths were directly related to the long waits, USA Today reported.

Top Reads from The Fiscal Times: