Health Care for Dependents and Survivors of Veterans
Released: 2018-02-26T00:00:00

Overview

The Veterans Health Administration (VHA) of the Department of Veterans Affairs (VA) provides health care services to veterans who meet certain eligibility requirements. The VHA is primarily a direct service provider of primary care, specialized care, and related medical and social support services to veterans though an integrated health care system. In 1973, Congress enacted the Veteran Health Care Expansion Act of 1973 ( P.L. 93-82 ), which, among other things, established effective September 1, 1973, the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA) as a means of providing health care services to dependents and survivors of certain veterans. As stated in the House report accompanying P.L. 93-82 :

The nation has long recognized that the widow and children of a veteran who dies of service-connected disease or injury or of a veteran who has a service-connected total disability are in a special category and deserving of substantial compensation and assistance in return for the sacrifice the family has made. This recognition has been shown in title 38 programs which provide for death compensation benefits, home loans, and educational assistance benefits for wives, widows, and war orphans. Failure to provide for the medical care of such individuals is an oversight which should be corrected.

CHAMPVA is fundamentally a health insurance program where certain eligible dependents and survivors of veterans (veterans rated permanently and totally disabled from a service-connected condition) obtain medical care from private health care providers. Beneficiaries usually pay 25% of the cost of medical care up to an annual catastrophic cap of $3,000 plus an annual outpatient deductible of $50 per individual or $100 per family. CHAMPVA pays the remaining 75% of the cost of the beneficiaries' medical care. CHAMPVA was designed to share costs of health services and to provide medical care in a manner similar to the care provided to certain eligible beneficiaries under the Department of Defense (DOD) TRICARE program (described later in this report). The program is administered by the Veterans Health Administration (VHA), Office of Community Care, located in Denver, CO.

The number of beneficiaries enrolled in CHAMPVA has grown over the years. From FY2001 through FY2017, enrollments grew by 396%—from 96,500 to 478,600 beneficiaries (see Figure 1 ). The 2001 expansion of CHAMPVA eligibility to certain individuals aged 65 years and older has contributed somewhat to the increase in enrollment. Moreover, there has been an increase in enrollment of dependents and spouses of certain Vietnam-era veterans with service-connected disabilities. This increase in Vietnam-era CHAMPVA sponsorship has occurred as aging Vietnam-era veterans with service-connected disabilities experience a worsening of symptoms and a change in disability status. Once a veteran becomes VA-rated permanently and totally disabled for a service-connected disability, the veteran's spouse and dependents are then eligible to enroll in CHAMPVA. The enactment of the Caregivers and Veterans Omnibus Health Services Act of 2010 ( P.L. 111-163 ), expanded CHAMPVA eligibility to include additional categories of non-veterans, such as primary family caregivers of certain seriously injured veterans qualifying under the Program of Comprehensive Assistance for Family Caregivers (PCAFC). Table A-1 provides a summary of major legislative changes that have affected the CHAMPVA program since 1973 (see Appendix A ).

The number of unique CHAMPVA users has also grown by 485%, from 61,900 in FY2001 to 361,900 in FY2017 (see Figure 1 ). Unique users are enrollees who utilize health care at least once in a fiscal year. Appendix B provides a state-by-state breakdown of the number of CHAMPVA enrollees and unique users for FY2017.

Funding for CHAMPVA is provided through the VHA's Medical Services account. As shown in Figure 2 , spending for CHAMPVA (excluding administrative costs) has increased by 945% between FY2001 and FY2017. The average cost per patient has also increased from approximately $2,349 per patient in FY2001 to an estimated $4,200 per patient in FY2017. A demographic shift in CHAMPVA enrollees from less expensive younger beneficiaries to more expensive aging beneficiaries, the "extension of CHAMPVA benefits to beneficiaries over the age of 65," and the general inflation of medical costs are potential reasons for this increase in CHAMPVA expenditures.

The next section provides answers to frequently asked questions about the program. The questions are presented according to the following topics: eligibility, benefits, payments, and other relevant programs.

Questions and Answers12

Eligibility

Who Is Eligible to Receive CHAMPVA Benefits?

Eligibility for CHAMPVA requires inclusion in one of the following categories:

the individual is the spouse or child of a veteran who has been rated permanently and totally disabled for a service-connected disability; or the individual is the surviving spouse or child of a veteran who died from a VA-rated service-connected disability; or the individual is the surviving spouse or child of a veteran who was at the time of death rated permanently and totally disabled from a service-connected disability; or the individual is the surviving spouse or child of a military member who died on active duty, not due to misconduct (in most cases, these family members are eligible under TRICARE, not CHAMPVA); or the individual is designated as a "primary family caregiver" of a seriously injured veteran who qualifies under the Program of Comprehensive Assistance for Family Caregivers (PCAFC), and does not have any other form of health insurance.

What Happens If a CHAMPVA-Eligible Spouse Divorces or Remarries?

CHAMPVA eligibility is terminated by divorce or annulment of marriage to the qualifying veteran. CHAMPVA has specific eligibility rules for widows. When a CHAMPVA-eligible widow remarries, eligibility is terminated if the marriage occurs before the age of 55. As of February 4, 2003, a CHAMPVA-eligible widow who remarries at age 55 or older remains eligible for CHAMPVA. If a CHAMPVA-eligible widow under the age of 55 remarries, and the remarriage is later terminated, the widow is again eligible for CHAMPVA.

When Does a Child Lose Eligibility?

A child's eligibility, excluding that of a helpless child, for CHAMPVA is terminated under the following conditions:

if the child is not enrolled in an accredited school as a full-time student, the child loses eligibility at age 18; or if the child is enrolled in an accredited school as a full-time student, the child loses eligibility at age 23 or upon losing full-time student status; or if the child marries; or if the child is a stepchild, the stepchild loses eligibility upon no longer living in the household of the sponsor; or if the child is a full-time student at an educational institution, between the ages of 18 and 23, and incurred a disabling injury or illness, the child loses eligibility either (1) six months from the removal date of the disability, (2) two years from the onset of the disability or illness, or (3) on the child's 23 rd birthday, whichever occurs first.

Why Aren't CHAMPVA-Eligible Children Getting Coverage Until They Reach Age 26?

The Patient Protection and Affordable Care Act (ACA, P.L. 111-148 , as amended) required that a group health plan and a health insurance issuer offering group or individual health insurance coverage that provides dependent coverage of children continue to make such coverage available for a dependent child until 26 years of age. This ACA requirement did not apply to the CHAMPVA program.

Since the 111 th Congress, several bills have been introduced in Congress to extend coverage of children eligible under the CHAMPVA program until they reach age 26, so that it will be consistent with private sector coverage under the Affordable Care Act (ACA). However, none of the bills have been enacted into law.

Benefits

Which Medical Benefits Are Available to Eligible Beneficiaries?

The CHAMPVA program covers most health care services and supplies that are determined to be medically necessary, including inpatient and outpatient care, prescription drugs, mental health services, and skilled nursing care. By law, CHAMPVA is required to provide health care benefits that are similar to the DOD's TRICARE Standard plan (see text box for details on proposed regulations regarding changes to CHAMPVA reflecting changes in TRICARE). Chiropractic services, routine eye examinations, hearing aids, and most dental benefits are excluded from both the federal CHAMPVA and TRICARE programs. In late 2008, benefits were expanded to include any non-dental prostheses and remove the exclusion from coverage of enuretic (bed-wetting) devices.

Certain types of care require advance approval, commonly known as preauthorization. Generally, a CHAMPVA beneficiary determines if a provider will accept the individual as a CHAMPVA beneficiary; this is known as "accepting assignment." This means that the provider will bill the VA directly for covered services, items, and supplies and will be paid the "allowable charge." Doctors or providers who agree to accept assignment cannot try to collect more than the CHAMPVA deductible and cost share (copay) amounts from the beneficiary. If the provider does not accept assignment, the CHAMPVA beneficiary is responsible for paying the annual deductible, the cost share amount, and any provider-billed amount that exceeds the total allowable amount. For care that is not covered by CHAMPVA, the beneficiary has to pay the full bill. For example, with very few exceptions, dental care and services deemed not medically necessary, cosmetic in nature, investigational, and experimental are not covered benefits. Currently, preauthorization is required for

durable medical equipment, hospice services, mental health/substance abuse services, organ and bone marrow transplants, and dental procedures that are directly related to covered medical conditions.

What Is the CHAMPVA Policy on Abortion?

The CHAMPVA program does not cover the cost of abortion counseling or abortion procedures unless a physician certifies that the life of the mother would be endangered should the fetus be carried to term. CHAMPVA will not cover any abortion related to incest or rape. Specifically, CHAMPVA will provide coverage for (1) spontaneous, missed, or threatened abortions and abortions related to ectopic pregnancies, or (2) fetal death due to natural causes. Dilation and evacuation (D&E) and dilation and curettage (D&C) procedures may be covered when done surgically for a gynecological diagnosis or covered abortions.

Payments

What Is the CHAMPVA Payment Structure?

CHAMPVA is a cost-sharing program that reimburses at rates comparable to the Medicare and TRICARE programs. CHAMPVA has an outpatient deductible of $50 per person and $100 per family per calendar year. After the deductible is reached, CHAMPVA pays 75% of the allowable amount, and the beneficiary pays 25% of the total amount. The patient typically pays the cost share at the time the service is provided, unless the beneficiary has another health insurance plan. In cases where a beneficiary has another form of health insurance, CHAMPVA is the secondary payer (with the exception of the circumstances outlined in the question " What Happens If the Beneficiary Has Other Health Insurance? "), and pays the lesser of either 75% of the allowable amount after the deductible or the rest of the billed charges. There is a $3,000 cap on cost sharing per CHAMPVA-eligible family. There is also an exception to the payment scheme outlined here for instances in which medical services are rendered through VA facilities participating in the CHAMPVA In-house Treatment Initiative (CITI).

What Happens If the Beneficiary Has Other Health Insurance?

By law, CHAMPVA is generally the secondary payer for beneficiaries having any other form of health insurance. The primary health insurance company is billed first, and then beneficiaries submit an explanation of benefits (EOB) for additional reimbursement by CHAMPVA. Exceptions exist for beneficiaries with Medicaid, beneficiaries receiving care under the State Victims of Crime Compensation Program, beneficiaries receiving care from the Indian Health Service, or beneficiaries with a CHAMPVA supplementary insurance policy. In those cases, CHAMPVA is the first payer.

How Are CHAMPVA Claims Processed?

All CHAMPVA claims are processed through the Chief Business Office Purchased Care in Denver, CO. Claims can be submitted by either the provider or the beneficiary, with each case requiring a different set of forms. All claims must be filed within one year after the date of service. For inpatient care, the claim must be filed within one year of the discharge date, and all payments will be made to the hospital regardless of which party submits the billing. Claims submitted after the one-year deadline will be denied. However, an appeal or reconsideration request must be submitted within one year from the initial determination date. As of 2009, the reimbursement ceiling on durable medical equipment (DME) was raised to $2,000 to facilitate the administrative claims process and to accurately reflect the current costs of medical equipment.

Other Programs

What Is the Difference Between CHAMPVA and TRICARE?

TRICARE is a health care program run by the DOD for families of active duty military servicemembers, families of servicemembers who died while on active duty, and retired military service men, women, and their families, regardless of their disability status. CHAMPVA is a comprehensive program run by the VA for eligible family members of veterans rated permanently and totally disabled for a service-connected disability or the family members of veterans who died from a VA-rated service-connected disability, whereas TRICARE has no disability criteria required for eligibility. The sponsoring veteran does not receive services through CHAMPVA, as he or she is eligible to receive services through the VA. Dependents of military retirees are not eligible for CHAMPVA, and must apply for benefits through TRICARE.

What Is the Relationship Between CHAMPVA and Medicare?

CHAMPVA is the secondary payer for beneficiaries with Medicare coverage. Under Section 3 of the Veterans' Survivors Benefits Improvement Act of 2001 ( P.L. 107-14 ), referred to as CHAMPVA for Life, CHAMPVA benefits were expanded to those over the age of 65 in the following circumstances.

If a beneficiary turns 65 before June 5, 2001, and only receives Medicare Part A, the beneficiary is eligible for CHAMPVA without having to purchase Medicare Part B coverage. If a beneficiary turns 65 before June 5, 2001, and receives both Medicare Part A and Part B, the beneficiary must retain both parts to be eligible for continued CHAMPVA as secondary coverage. If a beneficiary turns 65 on or after June 5, 2001, the beneficiary must be enrolled in Medicare Parts A and B to be eligible for CHAMPVA. Enrollment in Medicare Part D is not required to become or remain eligible for CHAMPVA. Individuals aged 65 or older who are not entitled to Medicare Part A retain CHAMPVA eligibility.

What Is the CHAMPVA In-House Treatment Initiative (CITI)?

The CITI is a voluntary program for CHAMPVA beneficiaries that provides medical care through local VA facilities on a space-available basis. Beneficiaries receiving care at the VA through the CITI program are not required to pay a deductible or participate in cost sharing. No extra enrollment is necessary to participate in the CITI program; the beneficiary simply has to determine if the local VA is a participating facility. The majority of VA facilities are CITI participants. It is important to emphasize that care is delivered based on the availability of space. Beneficiaries on Medicare or who have an HMO plan as their primary insurance are not eligible for the CITI program.

How Does the Affordable Care Act (ACA; P.L. 111-148, as amended) Affect CHAMPVA?

Under the ACA, individuals are required to maintain minimum essential coverage for themselves and their dependents. Beginning in 2014, the ACA requires most individuals who do not maintain minimum essential insurance coverage—and do not qualify for an exemption—to potentially pay a penalty for noncompliance. Those enrolled in the CHAMPVA program are considered to have minimum essential coverage and therefore are not subject to the individual mandate penalty when filing their taxes. The penalty is in effect through 2018; beginning in 2019, the penalty will be effectively eliminated (i.e., beginning in 2019, individuals who do not comply with the mandate will not have to pay the penalty). If a CHAMPVA enrollee wishes to purchase additional health care insurance from the health insurance marketplace (exchanges), he or she would not qualify for premium credits and subsidies. However, he or she may still purchase private health insurance to complement CHAMPVA coverage.

Appendix A. CHAMPVA Legislative History

Appendix B. CHAMPVA Enrollment and Unique Users, by State