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The Honorable Robert A. Petzel M.D.

The Honorable Dr. Robert A. Petzel, M.D., Under Secretary for Health Veterans, Health Administration, U.S. Department of Veterans Affairs

Good morning, Chairman Miller, Ranking Member Michaud, and Members of the Committee.  Thank you for the opportunity to discuss the Department of Veterans Affairs’ (VA) implementation of the Affordable Care Act and the law's impact on VA’s health care system and the Veterans we serve.  I am accompanied today by Ms. Patricia Vandenberg, Assistant Deputy Under Secretary for Health for Policy and Planning, and Ms. Lynne Harbin, Deputy Chief Business Officer, Member Services, Chief Business Office, both from the Veterans Health Administration (VHA).

The Affordable Care Act puts in place comprehensive reforms that improve access to affordable health coverage for everyone and protect consumers.  The law allows all Americans to make health insurance choices that work for them while guaranteeing access to care for our most vulnerable, and provides new ways to bring down costs and improve quality of care.  Since the Affordable Care Act’s enactment, VA has been proactive in working to understand the law’s impact on Veterans, other beneficiaries, and VA’s health care system; and in preparing for implementation of the law.  VA is preparing for Affordable Care Act implementation, with a focus on providing personalized, Veteran-centric health care.  Our ongoing efforts include, for example, developing data tools, coordinating directly with other Federal agencies, including the Internal Revenue Service (IRS) and the Department of Health and Human Services (HHS).

VA is committed to providing Veterans and other eligible beneficiaries timely access to high-quality health services.  VA’s health care mission covers the continuum of care providing inpatient and outpatient services, including pharmacy, prosthetics, mental health, long-term care in both institutional and non-institutional settings, and readjustment counseling.  VA currently provides health care to nearly 9 million enrolled Veterans and other beneficiaries, primarily dependents and survivors.  Enrollment in VA health care programs meets the Affordable Care Act requirement to maintain minimum essential coverage.  This means that Veterans enrolled in VA health care and beneficiaries enrolled in the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA) and Spina Bifida program do not need to obtain additional coverage as a result of Affordable Care Act.

VA welcomes new enrollees for health care on a daily basis.  Veterans currently enrolled in the VA health care system and current beneficiaries enrolled in VA’s CHAMPVA or Spina Bifida program will experience no change in their VA-administered health care programs, services, or benefits.  VA will continue to provide high quality, comprehensive health care.

VA remains proactive in ensuring it is prepared to meet the Affordable Care Act requirements.  One of VA’s initial steps to plan a successful implementation and fulfill the requirements of the Affordable Care Act was to form an internal workgroup prior to the Affordable Care Act’s enactment.  This workgroup reviewed the drafts of the Affordable Care Act legislation to examine the potential impact to Veterans.  Once the Affordable Care Act was enacted, VA has continued to monitor the national landscape to understand the impact that state decisions on Medicaid and Health Insurance Marketplaces may have on Veterans.

The remainder of my statement will highlight the most significant provisions to Veterans and VA and present the current steps VA is taking to ensure the effective implementation of the Affordable Care Act.  It will describe the effect of the Affordable Care Act on Veterans and other VA health care recipients, anticipated outcomes of the law, and VA’s response to the modest but expected net increase in enrollment.  

I.    Affordable Care Act Background and its Key Provisions to VA
Certain Affordable Care Act provisions began taking effect in 2010 soon after the law was enacted, and most elements of the Affordable Care Act are expected to be implemented by January 1, 2014.  Under the Affordable Care Act, the Federal government, State governments, insurers, employers, and individuals are given shared responsibility to reform and improve the availability, quality, and affordability of health insurance coverage in the United States.  Starting in 2014, the individual shared responsibility provision calls for each individual to have minimum essential health coverage (known as minimum essential coverage) for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return.  Under the law, VA coverage meets the definition of minimum essential coverage.

Under the Affordable Care Act States have the option to expand their Medicaid programs but are not required to do so.  VA continues to monitor state decisions to determine the impact on VA beneficiaries in those locations.

Other Affordable Care Act provisions include the establishment of Health Insurance Marketplaces (also referred to as “Exchanges”), where individuals and small businesses can easily compare policies and premiums and shop for coverage.  Certain individuals, based on their income, may be eligible for tax credits to defray the cost of health insurance premiums.  VA is committed to increasing awareness among eligible Veterans of VA health care benefits, an excellent health care option that meets the Affordable Care Act definition of minimum essential coverage.

II.    Current VHA Preparation, Coordination, and Implementation Efforts
VHA has proactively prepared for health reform by examining the key provisions of the law, identifying the implications for Veterans and VA, and conducting analyses to estimate the potential impact of the law on VA enrollment, demand for services, workforce, and costs.  Additionally, VA is taking steps to ensure a coordinated and collaborative approach to Affordable Care Act implementation.  VA estimates that there are approximately 1.3 million uninsured Veterans who may be eligible for, but not enrolled in, VA health care.   While these Veterans will be a major focus of education and outreach efforts, VA will ensure all Veterans can quickly access accurate and understandable information on the Affordable Care Act’s provisions and the impact on VA health care.

VHA implementation efforts fall into four broad categories: (1) data analysis; (2) communications; (3) operations; and (4) information technology.  The VHA Office of the Assistant Deputy Under Secretary for Health for Policy and Planning, in collaboration with the Chief Business Office, is coordinating health reform efforts within VHA.  Proactive efforts to date include the following:
•    Assessing the potential impacts and opportunities presented by the Affordable Care Act;  
•    Monitoring the national health reform landscape;
•    Developing plans and materials for outreach to Veterans;
•    Identifying, initiating, and testing information system changes needed to support the Affordable Care Act;  
•    Assessing VA’s enrollment business processes and identifying opportunities for enhancing the Veteran experience, including:
o    Providing each enrolled Veteran with a personalized Health Benefits Handbook in order to make Veterans of their health care benefits and enable them to compare those benefits to other health care options.  Each enrolled Veteran is able to read information specific to his or her health care benefits – priority group, co-pay amount, servicing VA medical facility and more – providing a personal link between the Veteran and VA;
o    Expanding call center hours of operations to respond to Veteran inquiries concerning VA health care benefits and the Affordable Care Act;  and
o    Streamlining the VA enrollment application form and process.  
•    Engaging with other Federal agencies including IRS and HHS to identify areas for collaboration and to ensure that VA is in compliance with Affordable Care Act requirements.

To oversee VA’s efforts, and to ensure a comprehensive and coordinated approach to implementation, the Under Secretary for Health established a VHA Health Reform Integrated Project Team (IPT).  The purpose of IPT is to examine strategic and operational issues that affect Veterans and VA as a result of the Affordable Care Act, steer the implementation of Affordable-Care-Act-related activities, and provide a mechanism for information exchange.  It is comprised of representatives from across the Department, to include VHA, Veterans Benefits Administration (VBA), and Office of the Secretary.  

III.    Continued Delivery of High Quality, Comprehensive Health Care
VA will continue to provide eligible Veterans with high quality, comprehensive health care they have earned through their service.  Additionally, the law provides that VA health care coverage meets the definition of minimum essential coverage under the Affordable Care Act.  This means that Veterans who are enrolled in VA health care programs, along with beneficiaries in the CHAMPVA and Spina Bifida program, do not need to take any additional steps to comply with the individual responsibility requirement outlined in the Affordable Care Act.

When key components of the Affordable Care Act are implemented on January 1, 2014, they will provide some Veterans, who are not currently eligible for VA health coverage, with new options for health care through other programs.  Some veterans may become eligible for Medicaid, while others may become eligible for a tax credit to purchase health coverage through the Health Insurance Marketplace.  These changes give VA the opportunity to communicate with Veterans and other stakeholders.  VA’s robust medical benefits package provides the full continuum of health care services for enrolled beneficiaries and there are no enrollment premiums or deductibles.

VA continues to be a leader on Veterans health issues with a commitment to ensuring the highest quality health care possible for our Nation’s Veterans.  VA anticipates a modest net increase in enrollment as a result of the Affordable Care Act.  The net increase will result from eligible non-enrolled Veterans enrolling in VA health care.  The VA medical care budget for fiscal year (FY) 2014 seeks $85 million to ensure VA is prepared to respond to additional Veteran enrollment and utilization of health care services.  In addition, the FY 2014 VA Information Technology budget includes $3.4 million to build out technology functionality related to the Affordable Care Act.

Mr. Chairman, our work to effectively implement the provisions of the Affordable Care Act continues.  We remain focused on providing Veterans and other eligible beneficiaries timely access to high-quality health care services.  We appreciate your support and encouragement in identifying and resolving challenges as we find new ways to care for Veterans.  VA is committed to providing the highest quality of care, which our Veterans have earned and deserve.  We appreciate the opportunity to appear before you today.  My colleagues and I are prepared to respond to any questions you may have.