The growing vets' disability scandal: an interview with James Terry Scott of the Veterans' Disability Benefits Commission

Something like a scandal has been brewing about health insurance for disabled vets.  NPR had a report on the situation on April 20 2007.  Here's an excerpt from that report:

Tim Ngo almost died in a grenade attack in Iraq. He sustained a serious head injury; surgeons had to cut out part of his skull. At Walter Reed Army Medical Center in Washington, D.C., he learned to walk and talk again.

When he got back home to Minnesota, he wore a white plastic helmet to protect the thinned-out patches of his skull. People on the street snickered, so Ngo's mother took a black marker and wrote on the helmet: U.S. ARMY, BACK FROM IRAQ. On this much, everyone agrees.

But here is the part that is in dispute: The Army says Tim Ngo is only 10 percent disabled.

"I was hoping I would get at least 50 or 60 or 70 percent," Ngo says. "But they said, 'Yeah, you're only going to get 10 percent'... And I was pretty outraged."

When a service member is retired for medical reasons, the military's disability rating makes a difference. If Ngo had been rated 30 percent disabled or higher, he would have gotten a monthly disability check instead of a small severance check. He also would have stayed in the military's health-care system.

Instead, Ngo enrolled with the Department of Veterans Affairs. Typically, there's a waiting period for the VA.

In October, while he was uninsured, Ngo had a seizure, caused by his war injury. He remembers being outside and blacking out; he fell to the ground on the driveway.

"My girlfriend was freaking out because she didn't know what to do," Ngo says. "She didn't know if I was going to die because I had hit the wrong side of my head."

An ambulance took Ngo to the nearest emergency room for treatment. It cost him $10,000. Ngo says that today, the bills for the incident are still unresolved.

The report was followed by this interview with the chairman of the Veterans' Disability Benefits Commission, James Terry Scott.

NPR: James Terry Scott, the retired Army general, chairs the Veterans' Disability Benefits Commission. He says based on the data so far he thinks he knows how to solve the problem of such low disability ratings made by the armed forces.

James Terry Scott: I'm speaking today for myself, not for the Commission or the other commissioners. What I think would best serve our service members, and for that matter the services in the Veterans Administration, is for the DOD to make an assessment of fitness or non-fitness for duty and the service member then passes immediately to the VA for evaluation of disability or disabilities. That should cut out the wide variation amongst the services and between DoD and the VA.

NPR: Given that the VA has a backlog in the hundreds of thousands, are they in any position to take on a new responsibility?

JTS: Well, 80% of those soldiers who appear before the fiscal evaluation board show up at the VA's doorstep anyway. That's about 12,000 a year. So 20% or 2400 more cases would have to be adjudicated by the VA. My sense is that there is agreement that the veterans disability side of the veterans' secretariat needs more people in the adjudication business and I sense that's part of the solution.

NPR: Back to what the situation is now -- we heard you say in your Senate testimony that, as you see it, the Pentagon has a strong incentive to rate people under 30% disabled because that way they limit their obligation to them to severance pay rather than very expensive medical costs. Do you believe that incentive was actually articulated to people who were doing the ratings -- that somebody would say "let's keep 'em low because we can't afford too many disabled vets qualifying for lifelong DoD medical care," or did people just understand what the incentive was?

JTS: I don't think that has ever been articulated. There is a very widespread perception in the veterans community -- in the Veterans' Service Organizations community -- that DoD does in fact take that into consideration. Obviously there is no evidence of that, and I would prefer to think that it's just a matter of perception and the fact that there's a fine shade of difference between 30 and not-30.

NPR: Explain to us for people who are unfamiliar with these systems: if somebody is rated, say, 30% or 40% disabled by the Department of Defense, and they qualify for health insurance, what is the difference for them and their families between that situation and coming out, say, 20% disabled and then going to the veterans' hospital instead?

JTS: Well, the primary difference is the family care. The Veterans Administration does not offer family care for anyone who is not 100% disabled. So if you fall into something below 100%, your family is not eligible for medical care from the VA. On the other hand, if you are above the 30% threshhold in disability as determined by the DoD, then your family is eligible for, essentially, healthcare. Now that's... There are co-pays. We're not talking free! We're talking about a very solid good healthcare plan for the family.

NPR: So it just happens that the issue of disability coming out of the armed services collides with the broader question we're facing in American society which is health insurance, who has it and who doesn't?

JTS: Exactly! If there were universal health insurance of some kind, most of this would go away in terms of the difference between 29% and the 31% disability. But in the current environment, it does make, as you well know, a big differences as to whether or not your family has insurance coverage.