Specifically, it discusses the evolution of the VA health care system and VA eligibility; the problems that VA’s current eligibility and health care contracting provisions create for veterans and providers; the extent to which VA provides veterans with health care services for which they are not eligible; legislative proposals to reform VA eligibility and contracting rules and their potential effect on the ease of administration, equity to veterans, costs to VA, and clarity of eligibility for veterans’ health benefits; and • approaches that could be used to limit the budgetary effects of eligibility reforms. We focused on the extent to which the proposals would (1) change VA health care funding from discretionary to mandatory, (2) expand eligibility for VA health care services, (3) create a uniform benefit package(s), (4) guarantee availability of covered services, and (5) provide new sources of funding for expanded benefits. The problems created by these provisions include the following: • Veterans are often uncertain about which services they are eligible to receive and what right they have to demand that VA provide them. • Physicians and administrative staff find the eligibility provisions hard to administer. Specifically, VA hospitals and clinics cannot, under current law, sell veterans those services not covered under their veterans’ health care benefits even if the veterans (1) have public or private health insurance that would pay for the care or (2) agree to pay for the services out of their own funds. As a result, it has important implications for veterans. Specifics follow: • Four of the proposals would retain the discretionary funding of VA health care. Other Improvements in VA Health Care System Could Heighten Increased Demand

If concurrent changes are made in the accessibility of VA health care services, in VA customer service, and in the extent to which veterans are allowed to use private providers under contract to VA, the effect of eligibility reforms on demand for VA care will likely be heightened. • Expanded outpatient eligibility could result in a corresponding increase in demand for hospital care. The American Legion proposal would require VA to establish both comprehensive and basic packages as well as a supplemental benefit package to cover specialized services. The American Legion proposal is the only major proposal that would specifically limit the number of veterans, and the number of services, covered under VA’s medical care appropriation. Another limitation is that the American Legion proposal would deem VA facilities to be Medicare providers without requiring them to meet Medicare quality, utilization, and reporting requirements. Conclusions and Agency Comments

The VA health care system was neither designed nor intended to be the primary source of health care services for most veterans. For those veterans who do not have public or private health insurance, however, eligibility reform is more important. It could improve their access to comprehensive health care services, including preventive health care services. These approaches generally involve placing limits on the number of veterans given expanded benefits, narrowing the range of benefits added, or increasing cost sharing to offset the costs of added benefits. A significant reduction in the number of veterans covered by the entitlement would be needed if the proposal was to be budget neutral.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed various proposals that would simplify and expand eligibility for veterans' health care benefits.

What GAO Found

GAO found that: (1) the VA health care system was neither designed nor intended to be the primary source of health care services for most veterans; (2) as the eligibility requirements for VA health care have evolved over the years, they have become increasingly complex and a source of frustration to veterans who are often uncertain about which services they are eligible to receive and to VA physicians and administrators who find them difficult to administer; (3) unlike private health insurance, VA health care does not have a defined, uniform benefit package and cannot guarantee the availability of covered services, and VA is limited to providing only those services covered by an individual veteran's VA benefits; (4) a VA facility is not permitted to provide a noncovered service even if it has the resources to provide the service and the veteran is willing to pay for it; (5) GAO recognizes the need for eligibility reform, which, for most veterans, might result in additional health care services not covered under their public or private insurance; (6) for veterans who do not have other insurance to meet their health care needs, eligibility reform is more important and could result in access to comprehensive health care services, including preventive care; (7) four legislative proposals would simplify and expand veterans' eligibility for VA care, and a fifth proposal, by the American Legion, has not yet been introduced as a legislative proposal; (8) each of the proposals has significant implications regarding the number of eligible veterans as well as the cost of providing care; (9) four of the proposals, which retain the discretionary funding of VA health care, could more than double demand for VA outpatient services, forcing VA to either ration care or seek larger appropriations; (10) the American Legion proposal, which would create an entitlement, would likely require significantly increased appropriations; (11) other issues in the proposal include provisions to exempt VA from most federal contracting laws and to deem VA as a Medicare provider; (12) GAO's work suggests that eligibility reforms could be developed to both strengthen VA's safety net mission and preserve its ability to provide specialized services; (13) among the approaches that could be pursued are placing limits on the number of veterans given expanded benefits, narrowing the range of benefits added, or increasing cost sharing to offset the costs of added benefits; and (14) the American Legion proposal provides a good starting point for developing future reform proposals, but changes would be needed to reduce the number of veterans covered by the entitlement if significant increases in VA appropriations are to be avoided.