Summary

The Department of Veterans Affairs (VA) spent about $1.2 billion in fiscal year 1991 to provide nursing home and domiciliary care to 75,000 veterans in VA and community facilities. For nursing home care, VA is required to collect a fee, known as a copayment, from veterans with incomes above a certain level--about $19,000 for a single veteran. VA picks up the tab for other veterans receiving care. Although VA is able to recover any unpaid nursing home copayments from veterans' estates, VA is not authorized to recover its remaining costs--more than 90 percent of its total costs for providing nursing home and domiciliary care. In GAO's view, an estate recovery program could help ease the financial strains on the government's health care efforts. Estate recovery programs can be structured to recover costs without placing undue hardships on the elderly, are consistent with the government's commitment to provide medical care to veterans, and can more than pay for themselves. Oregon's Medicaid estate recovery program recoups about $13 for every $1 spent administering the program. Congress may want to consider allowing VA to recover from veterans' estates up to the full cost of providing nursing home and domiciliary care. These funds could be used to help offset rising operating costs and provide care for more veterans. VA may need the authority to prevent asset transfers to family members or others that would circumvent cost recovery.

GAO found that: (1) although VA has the authority to recover unpaid nursing home copayments through estate recoveries, it does not have the same authority as states to recover the remaining costs for nursing home and domiciliary care or prevent asset transfers between veterans and family members to avoid future recovery; (2) a significant portion of VA nursing home and domiciliary care costs could be offset if VA had similar collection authority as states; (3) estate recovery programs can be structured to recover costs without placing undue hardships on the elderly, are consistent with the government's commitment to provide medical care to veterans, and can recover significantly more costs than they incur; (4) recovery of nursing home and domiciliary care costs through an estate recovery program has greater potential for veterans than for Medicaid recipients because veterans generally have greater assets and larger estates; (5) the success of the Oregon Medicaid estate recovery program should serve as a model for a VA estate recovery program; and (6) the implementation of a VA estate recovery program would not be difficult, since an administrative framework is already present and elderly advocacy groups generally accept the program because it protects recipients and their families from undue hardships.