Corporate Politicians Are Privatizing the VA, the Crown Jewel of Socialized Medicine

Amid the debt ceiling debate, House Republicans are pushing for cuts to the Veterans Administration, and corporate Democrats are continuing to support privatizing the agency’s socialized medicine. Both are an attack on working-class veterans.

Wounded soldiers who have recently returned from Iraq receiving treatment at Walter Reed Army Medical Center in Washington, DC on January 7, 2005. (David S. Holloway / Getty Images)

When the new House Republican majority passed its grab bag of government spending cuts last month, setting up an ongoing game of chicken with the White House over any federal debt limit increase, they also targeted essential services for military veterans, a constituency long courted by their own party. Included in the “Limit, Save, Grow Act of 2023” was a proposed 22 percent reduction in funding for the Department of Veterans Affairs (VA).

Right-wing Republicans scrambled to provide political cover for themselves by insisting that “our budget-cutting plan doesn’t harm veterans.” Instead, claimed Mike Bost, a former Marine from Illinois who now chairs the House Veterans’ Affairs Committee, his conservative colleagues were just trying to force a long-overdue discussion of whether VA funding is “actually helping veterans.”

Fortunately, a VA patient, elected to Congress last year, took the House floor to accuse the Republican majority of passing a “B.S. plan” that’s “an absolute betrayal and a disgrace.” As former Navy officer Chris Deluzio (D-PA) noted, House Republicans are “threatening to blow up our economy and to push us into default unless we agree to cuts to the VA and veterans, and to so much else. There is not a single protection, not a single one for veterans in their bill. [. . .] Millions of veterans are going to be screwed by this plan. They won’t get the care they’ve earned, and they will have to wait longer for benefits.”

Deluzio’s fiery speech generated much media attention and set the tone for other Democrats, like Joe Biden and California congressman Mark Takano, who have weighed in with similar criticisms of GOP hypocrisy. Democratic Party consultants and strategists are undoubtedly already sketching out the kind of attack ads — focusing on Republican support for VA benefit cuts — that will be aired to help the White House woo the “vet vote” away from right-wing candidates next year.

A Timely Smoke Screen

That forthcoming paid media blitz will have one downside. It will further obscure the fact that current threats to veterans’ programs are not just coming from the House majority or conservative Republicans in the Senate like Jerry Moran (R-KS). Biden and pro-business lawmakers are harming veterans by undermining the public provision of their care. Moran, along with former Democrat Kyrsten Sinema, has just introduced the Veterans Health Empowerment, Access, Leadership, and Transparency for our Heroes (HEALTH) Act of 2023, which would force the administration to double down on VA privatization.

As this political collaboration illustrates, the incremental defunding of direct care for nine million veterans has long been a bipartisan project. From Barack Obama to Donald Trump to Biden, three successive presidential administrations have embraced the idea that turning VA patients into customers of the private health care industry is better policy than strengthening the nation’s largest public health care system and best-working model of socialized medicine.

VA outsourcing has greatly accelerated since a coalition of conservative Republicans and corporate Democrats passed the VA MISSION Act of 2018. Implemented by Trump — and, now, Biden himself — this legislation diverts more than $30 billion a year from the agency’s direct care budget and showers that money on private medical practices and for-profit hospitals often less well prepared to treat veterans. This amount roughly equals the VA funding shortfall that would result from House speaker Kevin McCarthy’s biggest legislative achievement so far — the above-mentioned “Limit, Save, Grow Act of 2023.”

Thanks to the MISSION Act, the VA has been partially converted into a Medicare-style payer of bills submitted by outside vendors, with many of the same paperwork hassles, lax quality controls, and opportunities for fraud and abuse. The powerful private interests that gained this lucrative new federal revenue stream are fighting to preserve and expand it. They include some of the same companies who are undermining traditional Medicare coverage by enlisting more than half of all seniors in Medicare Advantage plans, with active assistance from the Trump and Biden administrations.

“Healthy Competition” or Disadvantaging the VA?

As a House Veterans’ Affairs Committee hearing revealed in 2022, VA spending on private sector care soared by 116 percent in the years after the passage of the MISSION Act, while funding for VA medical center staff grew by only 32 percent. Since Deluzio joined the committee this January, he has been the rare House Democrat willing to question this disastrous trend. At a recent hearing, attended by VA secretary Denis McDonough, Deluzio said he was “proud to receive my health care at the VA,” noting that many research studies have confirmed its higher quality and cost-effectiveness relative to the private sector.

In an exchange with McDonough, Deluzio pointed out the continuing disparity between Biden administration budget allocations for in-house vs. outsourced care for his fellow veterans. He then invited McDonough to “walk me through why we are seeing that growth on the one side and what is constraining the VA’s ability to do more within VA facilities?” McDonough hid behind the disingenuous claim that his hands are tied by Congress.

In reality, since January 2021, the VA secretary has failed to replace administrative rules for the MISSION Act, promulgated under Trump, that require the VA to refer patients to millions of appointments outside its own system, where wait times have often been longer. In a report to Congress last September, McDonough made the alarming, but accurate, prediction that the “VA is rapidly approaching a point where one-half of all care” will be outsourced. In the same document, he acknowledged that in-house care is cheaper, faster, higher quality, and preferred by veterans themselves. But McDonough insists that his agency and its 1.2 million private contractors are nevertheless engaged in a form of “healthy competition” that benefits patients, providers, and the public.

Frontline caregivers strongly disagree with this assessment. Several thousand responded to a survey conducted last year by the American Federation of Government Employees (AFGE), the largest VA union. In a March 2023 report called Disadvantaging the VA, they warned that their ability to care for veterans has been seriously compromised by Biden’s continuation of Trump administration policies and personnel practices. Survey respondents reported service cutbacks, facility closing threats, lack of new hiring, and resulting staffing shortages, exacerbated by a disruptive shift of thousands of health care professionals from providing direct care to monitoring the performance of private sector providers.

As the AFGE-backed report argues, “Even within the statutory constraints of the MISSION Act, Secretary McDonough can promulgate new regulations that would prioritize medical necessity, quality, and timeliness of care, above all else,” as the basis for patient referrals outside the VA. As in the past (ie., before Obama, Trump, and Biden), individual veterans could still be “sent outside the system if appropriate care was unavailable inside it.”

The Sinema-Moran Bomb

That course correction will never occur if Senator Sinema, a Veterans Affairs’ Committee member with five hundred thousand veterans among her constituents in Arizona, builds momentum for further privatization. Under the guise of expanding “veteran choice,” her Veterans HEALTH Act would open the floodgates for outsourcing in new and more destructive ways because it “would codify and expand the existing criteria for determining when a veteran is eligible for [non-VA] care.” Among the endorsers of this legislation are longtime proponents of VA privatization like the Koch Brothers–funded Concerned Veterans for America and the Trump-connected Independence Fund, plus the American Legion and the Veterans of Foreign Wars (VFW).

The conservative Legion and VFW both let their own members down five years ago when they pressured Congress to pass the MISSION Act, a surrender to corporate health care interests. Unlike these old-line organizations, smaller progressive groups like Common Defense and Veterans for Peace have challenged VA privatization and related bipartisan assaults on social programs for all poor and working-class Americans.

Two years ago, for example, Common Defense spotlighted Sinema’s ties to the health care and pharmaceutical industries, two major beneficiaries of VA outsourcing. Five former members of the military serving on her veterans’ advisory council resigned in protest, and their action was amplified in a seven-figure ad buy. Air Force veteran Sylvia González Andersh was among those blasting the senator for “answering to big donors rather than your own people.”

Common Defense members and other Arizona voters betrayed by Sinema are now rallying behind Congressman Ruben Gallego, a forty-three-year-old Marine combat veteran, who is her likely Democratic opponent next year. The son of immigrants from Colombia and Mexico and a member of the Congressional Progressive Caucus, Gallego launched his campaign in January at an event with fellow veterans at a Legion post in Guadalupe, Arizona.

In that announcement and other interviews, he linked his own struggles with post-traumatic stress disorder to his decision to enter politics and fight for public programs like Medicare and the VA. “The rich and the powerful — they don’t need more advocates,” Gallego says. “It’s the people who are trying to decide between groceries and utilities who need a fighter for them.”