Tuesday, July 29, 2014

Obamacare is going to make the VA's problems worse

Jeff Hutchens/Getty Images News

Despite the ongoing scandal, demand for health services at the VA probably won't shrink next year. It will probably grow — and Obamacare is largely to thank.

Nearly ten percent of veterans — about 1.3 million men and women who have served our country — are uninsured. Those veterans need to fulfill Obamacare's mandate to carry insurance or else pay a penalty, just like everyone else.

Enrolling in VA coverage satisfies that mandate. This means you could see some veterans who are eligible for health benefits — but haven't yet signed up — deciding to enroll in that coverage to dodge Obamacare's penalties.

For uninsured vets, VA benefits may be the cheapest health insurance option available. The VA requires co-payments at visits, but not monthly premiums. Veterans could give up their VA coverage and seek subsidies to buy private insurance on a state exchange if their income is low enough to qualify, but any premium associated with an exchange plan — even a very well-subsidized one — is more expensive than no premium at all.

These new enrollees could strain a health care system already stressed by a lack of resources. A doctor shortage has been plaguing nation for years. The VA isn't immune to these pressure — it is reportedly trying to find 400 primary care physicians to fill current vacancies.

Veterans also have other options

Medicaid may have fewer out-of-pockets costs than VA benefits, but veterans don't have to choose; they can be enrolled in both programs simultaneously. In 2007, eight percent of veterans reported Medicaid enrollment in addition to their VA benefits. With the Medicaid expansion moving forward in over half of states, that number will grow.

It's not clear how many of the currently uninsured veterans are eligible for VA benefits; Census data doesn't provide the kind of information necessary to tease that out. But the number is certainly greater than zero, and Obamacare's requirement to carry insurance will probably draw many out of the woodwork.

The VA certainly expects this to be the case: they requested an additional $85 million in their 2014 budget just to accommodate the hike in enrollment they expect from health reform. Additional funding is necessary but not sufficient to address access issues; the VA needs to actually scale up their capacity, too.

Medicaid expansion could relieve some pressures on the VA system. For some veterans, geographic access could be a serious barrier to care, since VA benefits are typically provided at VA facilities. Medicaid coverage has its own shortcomings, but dual eligibility would permit veterans to seek care wherever it was most readily available.

Of course, almost half of states are still refusing to expand the public program, affecting an estimated 258,600 uninsured veterans. That's a scandal in itself.

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