Administration Seeks $67.7 Billion for VA in 2005

WASHINGTON – Secretary of Veterans Affairs Anthony J. Principi announced today that President Bush will seek $67.7 billion in the fiscal year 2005 budget for the Department of Veterans Affairs (VA), a $5.6 billion increase in budget authority, primarily targeted for health care and disability compensation. "The budget proposal reaffirms the president’s support for providing the best possible health care and benefits to our veterans," Principi said.

The budget request represents a $1.2 billion, or 3.8 percent, increase in discretionary funding over the enacted level for 2004. Overall, the 2005 budget requests $32.1 billion in discretionary funding (mostly for health care) and $35.6 billion in mandatory funding (mostly for disability compensation, pensions and other benefits programs). "With the resources requested in this budget, VA will continue to increase veterans' access to our health care system, reduce the time it takes to process claims for benefits, and ensure our national cemeteries are lasting memorials commemorating veterans," Principi said.

Improving Access to Health Care

The president’s budget requests $29.5 billion for VA’s medical care, an increase of $1.17 billion, or 4.1 percent, over the 2004 level and more than 40 percent above the level in 2001. The medical care budget includes $2.4 billion in collections from third-party health insurance and co-payments from veterans. "The president's proposal includes ending copayments for several categories of veterans, including the poorest of the poor and our POWs," Principi said. "We will eliminate the pharmacy copayment for our most disadvantaged veterans. We will pay for emergency room care or urgent care for veterans in non-VA hospitals."

With the total resources for medical care, VA will be able to provide care to nearly 5.2 million patients, over 1 million more than in 2001, which marks a 20 percent increase. The department has taken several steps during the last year to reaffirm its health care commitment to the highest priority veterans, particularly service-disabled veterans. VA recently issued a directive that ensures veterans seeking care for service-connected medical problems will receive priority access to VA’s health care system. This new directive says that all veterans requiring care for a service-connected disability must be scheduled for a primary care evaluation within 30 days of their desired date.

As a result of the new policy and other regulatory changes presented in the budget, the number of patients within the core service population -- service-disabled veterans, those with low incomes and veterans with special needs such as spinal cord injuries -- will grow to nearly 3.7 million in 2005. Veterans in the highest priority groups will comprise 71 percent of the total patient population in 2005, up from 66 percent in 2003. VA devotes 88 percent of its medical care budget to meet the needs of these highest-priority veterans.

The policy and regulatory changes included in the 2005 budget would require more advantaged veterans to assume a small share of the cost of their health care. These proposals are consistent with recent Medicare reform that addresses the difference in the ability to pay for health care. Among the most significant legislative proposals in the budget are:

• ending pharmacy copayments for veterans in Priority Categories 2 through 5 with incomes between $9,894 and $16, 509;
• ending all copayments for former prisoners of war;
• authorizing the department to pay for emergency room care or urgent care for enrolled veterans in non-VA medical facilities;
• ending hospice copayments;
• increasing co-payments for pharmacy benefits for veterans in Priority Categories 7 and 8 -- those not being paid for service-connected disabilities with income above an income threshold -- from $7 to $15; and
• establishing an annual user fee of $250 for veterans in Priority Categories 7 and 8, who have higher incomes and no compensable service-connected disability.

"My top priority in health care is to ensure that resources are available to care for those veterans who are most deserving of VA’s medical services," Principi said. "The proposals in this budget will assist us in continuing that focus on our core service population in our health care system."

In a major initiative, the 2005 budget would allow the department to pay for emergency room care or urgent care for veterans in non-VA hospitals who have insurance if they have enrolled for care in VA’s health care system. This provision would ensure that veterans with life-threatening illnesses can seek and receive care at the closest possible medical facility. In addition, VA proposes to eliminate the co-payment requirement for all hospice care provided in a VA setting and all co-payments assessed to former prisoners of war.

The medical care resources included in the president’s 2005 budget will allow the department to continue to improve veterans’ access to health care. During the last three years, VA has opened 194 new community clinics, bringing the total to 676. Nearly nine out of every 10 enrolled veterans now live within 30 minutes of a VA medical facility. This expanded level of access has resulted in an increase in the number of outpatient visits from 44 million in 2001 to 51 million in 2003, as well as a 26 percent rate of growth in the annual number of prescriptions filled to a total of 108 million last year.

To further highlight the emphasis on the delivery of timely, accessible health care, the department has set a 2005 performance goal of 93 percent for the share of primary care appointments that will be scheduled within 30 days of the desired date; 99 percent of all appointments will be scheduled within 90 days. For appointments with specialists, the comparable performance goal is 90 percent within 30 days.

Veterans of the nation’s recent conflicts are among those for whom the department provides care. Of the veterans of the war in Iraq who have been discharged by the military, 12 percent, or 9,700, have sought and received VA medical care. More than 9 percent of discharged veterans of Operation Enduring Freedom -- nearly 1,400 -- have received VA health care.

The 2005 budget includes $524 million to move forward with the Capital Asset Realignment for Enhanced Services (CARES) program, more than doubling funds from last year to modernize VA's health care infrastructure. "CARES is about caring for veterans' future needs," Principi said. "We want the highest quality of health care closer to where most of our enrolled veterans live."