WASHINGTON (CNN) — The Obama administration is abandoning a controversial plan to charge private insurers for treatment of veterans’ service-connected ailments, House Speaker Nancy Pelosi said on Wednesday.
White House Chief of Staff Rahm Emanuel met with veterans’ groups on Wednesday.
Pelosi made the announcement while meeting with a group of veterans on Capitol Hill.
Veterans’ representatives and members of Congress have angrily opposed the proposal, which White House spokesman Robert Gibbs said was never finalized.
Leaders from 11 veterans groups discussed their position in a meeting Wednesday afternoon with White House Chief of Staff Rahm Emanuel.
On Monday, the groups met with President Obama, Emanuel, Secretary of Veterans Affairs Eric Shinseki and Steven Kosiak, director in charge of defense spending for the Office of Management and Budget.
The administration saw the plan as a way of raising more than $500 million in revenue for the Department of Veterans Affairs. However, veterans groups saw it is a violation of what they said is the government’s moral obligation to treat veterans injured during service to their country.
In addition, they believed it would lead to veterans and their families losing their private insurance or premiums rising because of the high costs of treating many service-related injuries.
The head of the Senate Veterans Affairs committee, Daniel Akaka, D-Hawaii, said Tuesday his committee would “not advance any such legislation.”
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His counterpart in the House, Bob Filner, D-California, said his committee wouldn’t take up the proposal either. In a statement released by his office, Filner said the idea is “DOA” and said the budget “cannot be balanced on the backs (or legs, or kidneys, or hearts) of our nation’s combat-wounded heroes.”
The president pushed back during the meeting on Monday, telling the groups the private insurance companies were getting a free ride. He challenged the veterans to come up with an alternative way to raise revenues.
One of the groups — AMVETS — planned to propose that billings be pursued more aggressively for injuries that are not service-related.
A 2008 Government Accountability Office study found that about $1.7 billion in treatment that could have been charged to private insurance never was, nor was it collected by the VA.
