Veterans' Benefits:

Savings From Reducing VA Pensions to Medicaid-Supported Nursing Home Residents

HRD-92-32: Published: Dec 27, 1991. Publicly Released: Dec 27, 1991.

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Pursuant to a congressional request, GAO reviewed the Department of Veterans Affairs' (VA) administration of its veterans' and survivors' pension program, focusing on: (1) reductions to pensions paid to veterans without dependents who receive Medicaid-supported nursing home care, expected to result from provisions of the Omnibus Budget Reconciliation Act (OBRA) of 1990; (2) estimates of additional reductions if OBRA is amended to include survivors; and (3) VA implementation of OBRA.

GAO found that: (1) OBRA 1990 could enable VA to reduce pensions by about $174 million annually for veterans receiving Medicaid-supported nursing home care and could reduce pensions by an additional $296 million if Congress enacts a pending legislative proposal to treat veterans and survivors equally in OBRA; (2) VA plans to transfer the combined $470- million cost savings to the Department of Health and Human Services and the states under the Medicaid program, which could result in annual net federal savings of about $202 million; (3) VA has not fully implemented the OBRA 1990 legislation; (4) VA has not timely reduced pensions for all affected veterans, given veterans clear and informative payment reduction notices, and adequately controlled its case review process; and (5) VA is planning to initiate changes to identify veterans' cases where pensions should be reduced.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Legislation reducing survivors' pensions was enacted. VA provided regional offices with a control listing of cases to be reviewed in a review of surviving spouses' cases.

    Recommendation: To improve the implementation of pension reduction legislation for survivors if their pensions are reduced, the Secretary of Veterans Affairs should provide VA regional offices with a control listing of cases to be reviewed for pension reduction and require the regional offices to use the listing to record the results of the review of each case.

    Agency Affected: Department of Veterans Affairs

  2. Status: Closed - Implemented

    Comments: Legislation reducing survivors' pensions was enacted. VA, through coordination with the Medicaid Bureau, added language to the Medicaid notification letters to more clearly explain the impact of pension reduction.

    Recommendation: To improve the implementation of pension reduction legislation for survivors if their pensions are reduced, the Secretary of Veterans Affairs should prepare and send notification letters that will clearly explain the impact of the pension reduction.

    Agency Affected: Department of Veterans Affairs

 

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