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Obama abandons veterans' private insurance plan
Joe Byrne
Published: Wednesday March 18, 2009

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After today's meeting between veteran advocacy leaders and the Obama administration, the White House announced that it will be abandoning a plan to make veterans use private insurance for war-related injuries.

Obama's proposal, which officials insisted he was 'non-committal' about, would force veterans out of a taxpayer-funded health care system, even if treatment was needed for injuries and illnesses related to their service. The Department of Veterans Affairs now bills third-party insurers only for non-service related injuries and illnesses such as the flu. If the injured vet requires prosthetics or ongoing therapy for a war injury, the VA picks up the tab. Obama's proposal would have changed that.

The White House was hoping that private insurers, who already sell coverage to vets, would be forced to pay their fair share. In a veterans meeting on Monday, Obama estimated that this could save $540 million. However, wounded vets can only purchase private insurance because the insurers know that any service-related injury will be covered by the VA. If this proposal had gone through, many feared, costs for war-related treatment might become prohibitive.

Along with the proposal to privatize veterans' insurance came a plan to boost funding for the VA by $25 billion over the next five years. According to White House spokesman Robert Gibbs, veterans can be confident that "This president takes very seriously the needs of our wounded warriors that have given so much to protect our freedom on battlefields throughout the world." The abandoned proposal might have helped take financial pressure of the VA, which has recently come under fire for being a bureaucratic mess.

Veterans advocates and politicians from both parties were fuming over Obama's proposal after a White House meeting on Monday and a press conference on Tuesday. Commander David Rebhein of American Legion left Monday's meeting angered by Obama's refusal “to hear arguments about the moral and government-avowed obligations that would be compromised by [the proposal]." In a letter sent to the White House yesterday, Representative Glenn Nye (D-VA) and a group of House Democrats expressed their frustration over the proposal and warned that such a plan “could harm our veterans and their families in unintended, yet very serious ways, jeopardizing their families' health care and even negatively affecting veterans' employment opportunities.”

Even John Stewart was ready to criticize Obama's proposal to make vets pay for their own service-related injuries. In a new segment called “That Can't Be Right,” Stewart blasted the White House for their money-saving scheme, instead proposing sponsored commendations like “the Frito Lay Medal of Honor.”

The 11 leaders of veterans advocacy groups left today's meeting feeling relieved that veterans' health care wasn't going to be further jeopardized. Journalists caught up with Norbert Ryan, president of Military Officers Association of America, after the meeting. Ryan told reporters, "Our voices were heard. They made the right decision on this."

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