Elderly Veterans Ignored in Rx Policy Debate

Published August 1, 2002

Millions of retired elderly veterans eligible for benefits under the U.S. Department of Veterans Affairs’ (VA) health care system have been largely forgotten in current health care policy debates. Nowhere is this more problematic than in the discussion of prescription drug policy.

Thousands of retired military personnel wait years just to see a Veterans Health Administration doctor. The system is struggling mightily to cope with a rapidly increasing patient population and rising drug costs.

Queuing Commonplace

At Bay Pines Veterans Medical Center, outside St. Petersburg, Florida, more than 4,400 veterans will have to wait until October 2005 for their first doctor appointment. According to current VA policy, only a VA doctor can write a prescription to be filled by a VA pharmacy.

In parts of Arizona, Florida, Iowa, Kansas, Missouri, and Nebraska, veterans wait months just to enroll at clinics. Enrollment is open to all honorably discharged veterans with at least two years of service. The service requirement does not apply to those discharged before September 7, 1980 or to one-time members of the National Guard or U.S. Army Reserve who were called to active duty.

Once enrolled, veterans find the VA a daunting adventure in frustration caused by rationing services to control costs. Administrators, frustrated as well, have proposed limiting eligibility to reduce the number of beneficiaries and using an income test to increase prescription drug copayments.

VA officials acknowledge reform is necessary. As the U.S. population generally is aging, so is the population of veterans. Without reform, the strain on the veterans’ health care system will only get worse over time.

System Sprawl

America’s 25.5 million veterans are already older, on average, and more dependent on medication than the general senior citizen population in the U.S. Nine million veterans remain from World War II and the Korean War. There are now 510,000 veterans 85 or older, and the VA predicts there will be 1.2 million by 2010.

The number of veterans enrolled in the sprawling VA network of clinics, hospitals, and pharmacies has doubled since the mid-1990s, to six million. The department’s pharmaceutical costs have more than doubled, from $1.1 billion in 1996 to $2.9 billion in 2001. Congress increased the VA health care budget just 42 percent over that five-year period.

According to the Department of Veterans Affairs, 163 hospitals, 137 nursing homes, and 850 outpatient clinics, staffed by 15,000 doctors and 30,000 nurses, are part of the VA network. In an effort to bring services closer to where many veterans live, the VA has added 400 clinics since 1996.

Not all health care facilities in the VA network experience excessive queuing. As older veterans migrate to the South, Southwest, or Midwest, they cause excess capacity in the facilities they leave behind, and inadequate capacity in the facilities that serve their new homes.

“There is adequate capacity in the total, but it’s mostly in the wrong place,” explained one doctor, who requested anonymity, at the Truman Memorial Hospital in Columbia, Missouri. “Until Congress understands the logistics of the problem, the system will continue to short-change our veterans.” He called the rule that VA beneficiaries must have their prescriptions written by VA doctors for filling at VA pharmacies “a classic example of mis-micromanagement that only adds to the queue.”

Category 7

In 1996, during the Clinton administration’s tenure, veterans won an expansion of health care benefits allowing any veteran to use the VA system of hospitals, clinics, and pharmacies under the rules of Category 7. The military-style code is for those veterans who are not disabled or low-income and do not have service-connected medical problems. The floodgates opened and enrollment doubled as the system took on thousands of veterans fleeing the private health care system, where benefits are shrinking.

Most veterans enrolled in recent years have been in Category 7, drawn in by the advantage of low-cost prescription drugs. The VA increased Category 7 drug copayments last year, to $7 a prescription from $2, but even the new charge is well below the copayments some private health plans require for some drugs. Charges at VA facilities are adjusted by income, with some low-income veterans still paying only $2 for a prescription filled at a network pharmacy.

The department has also tried to control costs by rationing some services, but most efforts are met with protests by veterans’ groups and some politicians and have been blocked on Capitol Hill.

Last November, for example, Secretary of Veterans Affairs Anthony J. Principi announced he would suspend new enrollments by Category 7 veterans in fiscal year 2003. But the plan was short-lived, as President George W. Bush promised during budget negotiations the VA would get extra money to cover Category 7 veterans. For the current fiscal year, the administration included $142 million for the VA in its request for additional appropriations for the Pentagon.

Fixing the System

According to research by the National Center for Policy Analysis (NCPA) the best solution is not more V.A. hospitals or more money. What is needed, say NCPA policy experts, is a GI Health Care Bill as a provider of last resort for veterans.

When Congress created the GI Bill, it permitted veterans to choose the type of college or vocational school they wanted to attend. Our colleges are better for the competition the GI Bill created, and our veterans received a quality education, exercising the same choices available to other citizens.

A GI Health Care Bill would provide eligible veterans with a voucher they could use to purchase a traditional health insurance policy, a Medical Savings Account (MSA), an HMO membership, or even premium support for veterans still employed and covered by group insurance.

The NCPA notes, “Such a bill would give veterans the same options as the privately insured.” For veterans with known high medical expenses, the voucher could be used to pay for coverage under the private-sector/state-run partnership plan typically known as high-risk insurance pools.

If all veterans have access to private health insurance, there would be no need for the VA hospitals, clinics, nursing homes, and other capital equipment. According to the VA, its capital equipment is worth close to $6.0 billion. Selling it, says NCPA, “…perhaps to private hospital systems, could generate significant income for the U.S. government. This money could be invested in treasury notes and the interest applied to the cost of the GI Health Care Bill.”

The NCPA notes, “With these options, veterans would have the same choices as everyone else. Our politicians would have one less pork barrel to empty. And our veterans would not face waiting lines or substandard health care. Having served our country so well, they deserve better.”