We find that in recent years, when fiscal conditions have been tight, health insurance premiums for state workers have grown materially less rapidly than premiums for comparable private- sector employers; this slower premium growth for state workers reflects, for example, changes from traditional comprehensive plans to networked plans, increases in deductibles, and/or non-transparent reductions in access due to reductions in payments to providers. Interestingly, the share of the premium paid by state workers has tended to rise in states with high rates of public-sector unionization, where the employee share started at a low base, while the share has fallen elsewhere.
The results in this presentation expand on those published in Congressional Budget Office, Options for Reducing the Deficit: 2014 to 2023 (November 2013) using the most recent CBO baseline. The analysis provides estimates of the impact on coverage of 3 alternative policy options:
- Totally eliminate the tax exclusion for federal income tax and payroll tax purposes;
- Eliminate the tax exclusion for federal income tax but not for payroll tax purposes;
- Cap income and payroll tax exclusions at the median premium for employment-based plans
Revelations of chronic delays at Veterans Administration VA hospitals and inexcusable fraud in record keeping have spurred calls for reform of the VA system. Politicians have been eager to jump in front of cameras to declare their support for veterans. But House and Senate VA reform bills represent only tentative first steps towards empowering veterans to take ownership over their health care and hold the VA accountable.
The bigger problem is the absence of a coherent co-payment system to incentivize veterans to think through their health care decisions. Contrary to conventional wisdom, VA health care is free only to veterans with severe, service-related conditions. A byzantine co-insurance system exists in which the cost of care is linked to the severity of a veteran’s condition and the degree to which the condition is service-related. Veterans additionally receive a monthly tax-free cash payment based on the severity of their service-related health condition. The result is that veterans face perverse incentives to let their health deteriorate to the point where they can avoid copayments and receive higher monthly financial support. Reform should focus on redesigning VA co-insurance to give veterans incentives to embrace preventive care and take greater ownership over their health care decisions.
Thursday, July 17, 2014 | 10:00 a.m. – 11:30 a.m.
AEI, Twelfth Floor 1150 Seventeenth Street, NW Washington, DC 20036
About This Event: Recent scandals at medical centers for veterans have trained a spotlight on longstanding inefficiencies within the US Department of Veterans Affairs VA. In the case of the VA’s disability system, a nearly century-old approach to wounded veterans still prevails. The widespread consensus is that the problem goes much deeper than falsified waiting lists and delayed access to care, and necessitates a global overhaul. What would a renewed vision of veteran care look like, and how should we clarify the objectives of the VA’s disability system? In the interim, what short-term reforms are practical?
Please join AEI as former VA Assistant Deputy Secretary for Policy Michael H. McLendon presents a blueprint for reform, followed by a discussion with experts in health care, disability, and public administration.
Staff members at dozens of Department of Veterans Affairs hospitals across the country have objected for years to falsified patient appointment schedules and other improper practices, only to be rebuffed, disciplined or even fired after speaking up, according to interviews with current and former staff members and internal documents.The growing V.A. scandal over long patient wait times and fake scheduling books is emboldening hundreds of employees to go to federal watchdogs, unions, lawmakers and outside whistle-blower groups to report continuing problems, officials for those various groups said.
The Department of Veterans Affairs is in the news over a serious scandal. But the focus on VA hospitals obscures a separate but massive problem in the VA’s disability-benefits system, whose function should be to treat and rehabilitate veterans to enhance their ability to work.There are huge backlogs of disability claims, increasing numbers of medical conditions that count as disabilities, and, most important, a set of bureaucratic procedures at the Veterans Benefits Administration that cost hundreds of millions of dollars and create all the wrong incentives for recovery. There’s one common thread with the other VA scandal: In both cases, the agency’s genuine desire to serve veterans has exceeded its ability to deploy a system that works well in practice.
Senate Vets Bill Could Create New $500 Billion Entitlement Program | Committee for a Responsible Federal BudgetJune 12, 2014
The Senate voted 93-3 yesterday on new legislation to expand veterans’ benefits by allowing beneficiaries to seek out private non-VA health care paid for by the Department of Veterans Affairs VA. Although recent events highlight a real need to improve the veterans health system, the Senate-passed legislation provides an unprecedented “blank check” to the VA, violates every principle of good budgeting, and could add substantially to the national debt.While the fast timeline of the legislation gave the CBO little opportunity to score the cost of the bill, a preliminary partial CBO estimate suggests just one provision of the legislation could cost more than $35 billion through 2016. Importantly, however, that assumes the provision takes time to ramp up and then the new authority expires after 2016. If enacted, there could be tremendous pressure to extend this new benefit beyond 2016. CBO estimates that, if fully phased in, this provision would cost $50 billion per year — more than doubling what is currently spent on VA health care.
The real test is that only 16 percent of veterans identify the free services of VA as their primary source of medical care, and only one-third more even use it in emergencies. They know what they are doing. The best estimate finds that veteran suits against the VA yielded $845 million in malpractice payments over the past decade. The New England Journal of Medicine found that private practice pays about 20 percent of malpractice suits brought against them, compared to 25 percent for VA, a rate one-quarter higher. The decorated and wounded Army General Shinseki did not know what he was up against: “I can’t explain the lack of integrity among some of the leaders of our healthcare facilities,” he said. “This is something I rarely encountered during my 38 years in uniform. I cannot defend it because it is indefensible.” House Veterans Affairs Committee chairman Jeff Miller had warned “his people were not telling him the truth” even as Shinseki visited more facilities than any previous secretary, an absolutely corrupt bureaucracy lying right to his face.
The most important thing to understand about the Veterans Health Adminstration is that it truly is socialized medicine. We often throw the term “socialized medicine” around to describe any government health care program, but the distinction is really important to understand.
Socialized medicine, properly understood, is a system in which the state owns and controls everything. The government owns the hospitals; it employs the physicians; it pays for the health insurance and the health care. That, in a nutshell, is the VA. It’s also, for the most part, the system in place under the British National Health Service.
Single-payer health care, on the other hand, is only partly socialized. In a single-payer system, the government is the sole insurer, but hospitals can be widely privately owned and operated, and doctors can work for private hospitals or for themselves. Medicare and Medicaid, at the outset, were designed as single payer programs.
At the heart of the VA’s scheduling procedure is a software system inaugurated a year after Steve Jobs unveiled the first Macintosh computer in 1984. It has been repeatedly patched, but never completely overhauled. It still allows schedulers to omit basic things like when a patient first requests a visit. It also lacks the ability to oversee the system as a whole, beyond individual VA medical systems scattered across the country, the GAO says.
“We’ve got to tackle the overarching system and bring it into the 21st century, so that doesn’t have to have all of these workarounds,” said Philip Matkovsky, assistant deputy under secretary for health for administrative operations in the VA, in response to Ms. Draper’s comments. “The system is largely unchanged” since it was used for the first time to schedule an appointment in April 1985.