Getting Veterans Off Medicaid

January 18, 2012
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As states grapple with growing Medicaid costs in an era of sluggish economic growth and antipathy to taxes, they are very pleased when they find a way to increase benefits to citizens while reducing their own expenditures. I predict many states will follow the example of Washington, which since 2003 has run a program to identify Medicaid enrollees who are eligible for benefits from the Department of Veterans Affairs.

As states grapple with growing Medicaid costs in an era of sluggish economic growth and antipathy to taxes, they are very pleased when they find a way to increase benefits to citizens while reducing their own expenditures. I predict many states will follow the example of Washington, which since 2003 has run a program to identify Medicaid enrollees who are eligible for benefits from the Department of Veterans Affairs.

Surprisingly (to me anyway) there are numerous veterans who end up on Medicaid instead of turning to the VA system, which offers richer benefits. For example, some veterans qualify for the VA’s Aid and Attendance Pension, which helps low-income veterans and widows receive long-term care in their home or an institution. Medicaid may attempt to recover costs by going after an enrollee’s estate, while the VA doesn’t. And the VA may also provide a pension for elderly and disabled veterans and their survivors, and a death benefit.

The state of Washington considers its efforts a “win-win” that offers enhanced benefits to veterans while achieving $30 million of cost avoidance for the state (which pays a share of Medicaid benefits but not VA benefits). As the number of people eligible for Medicaid expands under the Affordable Care Act, I’m sure Washington and other states will find ways to achieve even greater savings by diverting potential Medicaid enrollees into VA programs.

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I’m completely in favor of this program and believe that veterans should receive all the benefits they have earned. However, as a society we should do more to recognize the full cost of our military policy. Cost accounting for the Iraq and Afghanistan wars should include the long-term VA and other costs of returning veterans, and the state of Washington should also at least acknowledge what the increased impact is on the federal budget. If every state followed Washington’s example, taxpayers would pay more money not less, as any reduction in state spending is more than made up for by increases on the federal side. I’d also like to see unclaimed benefits estimated and publicized.