Military veterans will have more health insurance options under the Affordable Care Act, but some vets, like many Americans, may still struggle to find affordable, accessible care that meets their needs.

Roughly 40 percent of the 22.3 million military veterans receive health-care services from the Veterans Health Administration, which operates a nationwide network of medical centers, hospitals and clinics.

Many veterans are eligible for both VA health care and Medicare, Medicaid or Tricare, the health plan for active and retired military and their families. About half of veterans have private insurance; approximately one in 10 veterans younger than 65 are uninsured.

Veterans who were honorably discharged after being on active duty for at least two years may qualify for VA health services. Since funding for the VA health program is limited, however, priority is given to veterans who have service-related disabilities or low incomes.

Although there are no premiums for VA health care, some veterans may owe co-payments for services. Veterans who return from active military duty are typically eligible for free VA health care for five years.

Under the Affordable Care Act, most people will have to have health insurance starting in January or pay a penalty. Veterans who are enrolled in VA health care won’t have to buy additional coverage, although they can supplement their coverage if they want to.

Mike Sage, 64, a Vietnam War combat veteran, pays $15 per visit for primary-care services and $50 for specialist care at the VA clinic near his home in Monmouth, Ill. Prescription drugs are $8 for a 30-day supply. But his wife, Kay, like many veterans’ spouses, doesn’t qualify for VA health care. They plan to check out the policies offered on the Illinois health insurance exchange this fall to see if there’s a better option than the catastrophic-coverage plan with a $5,000 deductible that she currently carries.

Sage was relieved to learn that his VA health care counts as coverage under the ACA. “As long as I’m not subject to a penalty [for not having insurance], we’ll do some comparative shopping for her,” he says.

Kay Sage might qualify for a premium tax credit for coverage on the exchange if the couple’s household income is between 100 percent and 400 percent of the federal poverty level ($15,510 to $62,040 for a family of two in 2013), according to the Treasury Department.

The expansion of Medicaid under the Affordable Care Act — which states are currently wrestling over whether to implement — could also affect veterans’ health care. The law allows the expansion of the federal-state program for low-income people to include adults with incomes up to 138 percent of the federal poverty level ($15,856 in 2013).

According to an analysis published by the Urban Institute last month, four in 10 uninsured veterans have incomes below 138 percent of the federal poverty level, potentially enabling them to qualify for Medicaid if their states expand the program. Most of those veterans have incomes below 100 percent of the poverty level.

“For these veterans, it’s critical that their state expand Medicaid,” says Jennifer Haley, a research associate at the Urban Institute who co-authored the report.

In states that don’t expand their programs, veterans whose income falls below 100 percent of the poverty level will generally not qualify for Medicaid, nor for subsidized coverage on the exchanges.

Even though a non-disabled veteran may meet the income threshold for VA health care — nationally, about $34,000, further adjusted by geographic location — he or she may not live near VA facilities or know that VA care is available, according to the report.

At a hearing last month before the House Committee on Veterans’ Affairs, VA officials said they expect a net increase of 66,000 veterans seeking health care through VA facilities when the mandate to have health insurance kicks in next year. 

Some veterans will come into the VA system but others will leave to seek coverage on the exchanges or through Medicaid, they said. Those who are eligible for more than one health program may pick and choose, using one program for cheaper prescription drugs, for example, and another for specialist care.

But more choices may not mean better care, says Kenneth Kizer, director of the Institute for Population Health Improvement at the UC Davis Health System.

In an opinion piece published last year in the Journal of the American Medical Association, Kizer, a former VA official, noted that having access to multiple plans can lead to fragmented care, increasing the chances of errors and other complications.

“Tests get repeated, drugs get prescribed that may not be compatible with each other,” he says. “One provider may not realize what the other is doing.” 

This article was produced by Kaiser Health News with support from The SCAN Foundation.

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