WASHINGTON (CNN) - Veterans groups are angry after President Barack Obama told them Monday that he means to go ahead with a proposal to have treatment for service-connected injuries charged to veterans' private insurance plans.
Leaders of the country's most prominent veterans groups met Monday at the White House with Obama, Veterans Affairs Secretary Eric Shinseki, White House Chief of Staff Rahm Emanuel and Steven Kosiak, the director in charge of defense spending for the Office of Management and Budget.
Some of the veterans groups were caught off guard when the president said the administration wants to go ahead with the idea as a way of generating $540 million for the Department of Veterans Affairs in 2010. The groups and some members of Congress have been very vocal in opposing the idea.
The message, according to some of the people in the room, was that if the groups do not like this idea, they need to come back with another way of saving or raising revenues for the VA.
"I got the distinct impression that the only hope of this plan not being enacted is for an alternative plan to be developed that would generate the desired $540 million in revenue" said Cmdr. David Rehbein of the American Legion, in a written statement.
Obama did most of the talking for the administration, with Emmanuel speaking, too, meeting participants said. Shinseki did not speak much in the meeting, which was described as "professional" by David Gorman, executive director of Disabled American Veterans.
The president was sympathetic to the needs of veterans, Gorman said, but insisted the insurance companies are getting away with not paying for anything.
"The vets are paying premiums to insurance companies and that is a free ride that needs to stop," Gorman said in describing the president's message to the group.
The groups oppose the idea because they believe the government has a moral obligation to pay for service-connected injuries for the men and women who risked their lives serving the country.
"This flies in the face of the VA's covenant to cover all service-related health-care expenses," said Jay Agg, a spokesman for AMVETS.
The groups also say that the cost of treating service-connected injuries could lead to veterans quickly maxing out their benefits in third-party insurance, risking coverage for not just them, but their families who are also covered under the plans. In addition, they foresee premiums rising to cover the cost of treating the service-connected injuries.
"We are going to go back in and fight this thing tooth and nail," Gorman
He said the president complained that instead of commending the significant budget increase for the VA - an 11 percent increase in 2010 and $25 billion over five years - the groups are complaining about this proposal. But Gorman said the issue of third-party billing is fundamental to the VA and it is a "distraction" from discussing the budget increases.
Another group, the Iraq and Afghanistan Veterans of America, said that while they are encouraged by the increase in money for veterans' health care, the billing proposal is not acceptable.
"Veterans of all generations agree that this proposal is bad for the country and bad for veterans. If the president and the OMB want to cut costs, they can start at AIG, not the VA," said Paul Rieckhoff, the group's executive director, in a written statement.
The opposition is not a surprise to the White House. The groups had sent a letter opposing the idea when it was just a rumor. Last week, Congress weighed in when members of both the House and Senate Veterans Affairs committees told Shinseki at separate meetings that they objected to the plan.
Shinseki was told by Sen. Patty Murray, D-Washington, that it would be "dead on arrival." Rep. Mike Michaud, D- Maine, said if it was presented he would oppose the entire budget.
It is unconscionable and it is an insult to our veterans who have been hurt overseas," Michaud said. "It is just unbelievable that anyone would ever think of doing that in this budget."
At the time, Shinseki would say only that the idea was under consideration but no decision had been made.
The groups have another meeting with the White House on Thursday to suggest other options. Both AMVETS and Disabled American Veterans believe that the VA could raise more revenue by being more aggressive about pursuing billings for non-service-connected treatments. Increasing third-party billing for non-service related injuries by 10 percent, suggested Agg, would free up more money to help service-related injuries.
Another idea that will be presented would be to bill Medicare.
"This we believe, would more easily meet the president's financial goal," said Rehbein of the American Legion.
Gorman said his group is willing to concede some money in the VA budget to avoid the insurance proposal.
"If it comes down to this issue, which is fundamental to the VA and what it should do, we are willing to give up a couple billion to salvage this issue," Gorman said.
VA spokesman deferred all questions to the White House. White House
officials were not immediately available for comment.
- CNN's Rachel Streitfeld contributed to this report