Obama Backs Down on Controversial Veteran Health Care Services Policy

March 23, 2009 – President Barack Obama has backed down from recent demands that wounded war veterans have their private health insurers pay the cost of their injuries suffered in the line of duty instead of following through on his administration’s obligation to provide health care coverage for wounded soldiers.

The Obama administration has said proposal specifics will be revealed when the President’s proposed budget is submitted to Congress in April, although the administration did not indicate whether Congress actually would read the measure before voting on them. The proposal would provide some $540 million in additional revenue for a proposed federal budget that many economists say would create an annual budget deficit of nearly $1 trillion over the next 10 years.

Veterans services organizations and several Capitol Hill lawmakers strongly oppose the President’s proposal. Officials for veterans groups met with the President on March 16 and were told by Chief of Staff Rahm Emanuel that Obama would go through with the plan unless veterans groups came up with another idea.

“It became apparent during our discussion today that the President intends to move forward with this unreasonable plan,” American Legion Commander David K. Rehbein said after the March 16 meeting. “He says he is looking to generate $540-million by this method but refused to hear arguments about the moral and government-avowed obligations that would be compromised by it.”

The proposal would require the U.S. Department of Veterans Affairs and the Veterans Administration to charge private health insurance companies treating injuries and medical conditions caused by military service in Iraq, Afghanistan and elsewhere. Health insurance is void when going to war, and the federal government is responsible for the cost of caring for wounded war veterans. But Obama’s proposal would change that to the detriment of American consumers and war veterans, according to critics.

Veterans groups say the President’s proposal means job providers would be less likely to hire wounded war veterans due to fear or increasing their health care costs and insurance benefits for families of veterans would be endangered. And forcing private health insurers to foot the bill for injuries sustained during military service will increase costs for American families already struggling to afford health insurance, several lawmakers contend.

“This reimbursement plan would be inconsistent with the mandate ‘to care for him who shall have borne the battle’ given that the United States government sent members of the armed forces into harm's way and not private insurance companies,” Rehbein said. “The American Legion does not and will not support any plan that seeks to bill a veteran for treatment of a service connected disability at the very agency that was created to treat the unique need of America's veterans!”

Rehbein was among a group of senior officials representing veterans service organizations recently meeting with the President, White House Chief of Staff Rahm Emmanuel, Secretary of Veterans Affairs Eric Shinseki and Steven Kosiak, the overseer of defense spending at the Office of Management and Budget.