[Congressional Record Volume 146, Number 102 (Wednesday, September 6, 2000)]
[Senate]
[Pages S8111-S8112]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY:
  S. 3010. A bill to amend title 38, United States Code, to improve 
procedures for the determination of the inability of veterans to defray 
expenses of necessary medical care, and for other purposes; to the 
Committee on Veterans' Affairs.


      legislation for the benefit of land-rich cash poor veterans

  Mr. GRASSLEY. Mr. President, I am today introducing a bill which 
would exclude the value of real property of a veteran, or a veteran's 
spouse or dependent, in determining how a veteran's eligibility for 
health care from the Department of Veterans Affair (VA) is classified. 
The bill would also simplify eligibility determinations by eliminating 
the annual self-reporting burden for veterans, and instead enable the 
Department to obtain income information directly from the Internal 
Revenue Service and the Social Security Administration.
  The problem asset-rich, cash-poor veterans experience in gaining 
eligibility for veterans pension and health care benefits was brought 
to my attention late last year by one of my constituents, Larry 
Sundall. Larry is one of Iowa's county veterans service officers. He 
serves veterans in Emmet County, in northwest Iowa. In the course of 
his work, he was finding that many of his farmer-veteran constituents 
where in desperate straits with no, or little, income, but still could 
not qualify for VA pension programs without selling their land. Because 
of the value of their land, these veterans would also be classified in 
Category 7 for purposes of health service eligibility in the event they 
sought health care from the VA. Category 7 veterans can receive health 
care services as long as the VA has sufficient funds. However, they are 
required to pay co-payments for any health care they receive through 
the VA because of the value of their land, even if they have no income 
and are in debt to boot. If the administration and Congress don't 
appropriate enough money, these Category 7 veterans will not be 
eligible for health care services from the VA.
  At Larry's urging, I decided to convene a meeting of interested 
parties in Des Moines last April to talk over this issue. Because many 
of his county veterans officials in Iowa, Minnesota, Nebraska, and 
South Dakota were encountering constituents with similar problems, we 
invited the associations of county veterans service officers from those 
states to send a representative to participate. We invited the State 
Veterans Affairs Officers from those states. VA staff from 
headquarters, regional offices, and VISNs also participated. The 
meeting was very useful and informative from my perspective, and I am 
grateful to all who participated. As it happens, the VA's Health 
Services Administration had already recognized the asset test as a 
problem for veterans and had formed a task force to look into the 
feasibility of eliminating the asset test. The Veterans Benefits 
Administration had also begun to discuss the issue. In any case, VA 
participants at the meeting agreed to convey the essentials of our 
discussion to principal officials at VA headquarters.
  The problem follows from a provision of Title 38 which holds that the 
Secretary may deny benefits to a veteran ``. . . when the corpus of the 
estate of the veteran . . . is such that under all the circumstances . 
. . it is reasonable that some part of the corpus of such estates be 
consumed for the veteran's maintenance''. In other words, if the income 
and estate of a veteran are large enough, they should be used before 
the veteran receives benefits from the VA. The law also states, 
however, that liquidations of assets should be required only when it 
can be done at ``no substantial sacrifice'' to the veteran. Regulations 
implementing this provision of law contain essentially the same 
language. The complications begin with a VA manual, 21-1, which lays 
out criteria to be used by VA staff in adjudicating eligibility for 
pension and health benefits. Under the criteria set out in M21-1, the 
net worth of a veteran must be adjudicated when the veteran's income 
and net worth is greater than $50,000. Ownership of $50,000 of farm 
land or other real property does not automatically and inevitably mean 
that adjudicators will declare a farmer veteran ineligible for these VA 
programs. In principle, the $50,000 is just a threshold which is to 
trigger adjudication of a veteran's claim for benefits, not to 
automatically disqualify a veteran for benefits.

  But there are two problems with the treatment of assets in the 
schema. First is the $50,000 level. It's obviously much too low, even 
as a trigger for adjudication. In Iowa currently, the average value of 
an acre of farm land is $1,781. So a farm holding valued at $50,000 
would average about 28 acres, clearly two small to be viable. A 40 acre 
farm, at the current average value per acre, would be worth $71,240. A 
more viable 80 acre farm would be valued at $142,480. It seems to me, 
therefore, that the threshold triggering review of a farmer veteran's 
income and assets should be raised to $150,000. But, second, and more 
fundamentally, the law stipulates, as I noted earlier, that divestiture 
of an estate should not involve ``substantial sacrifice''. It is 
difficult for me to see that selling off the family farm, in many, if 
not most, cases, the sole source of livelihood for a farm family, would 
not involve substantial sacrifice. It thus seems inherently unrealistic 
to require a veteran to liquidate land holdings in order to become 
eligible for VA pension benefits or in order to pay co-payments for VA 
health care services.
  What the bill I am introducing today would do is eliminate completely 
the asset test as a factor is establishing eligibility for health care 
services. A veteran's income, however, would still be considered in 
eligibility determinations. The bill would also permit the Secretary to 
determine the attributable income of the veteran using income date from 
the year preceding the prior year in the event that the Secretary is 
unable to use prior year data. Finally, the bill would permit the 
Secretary to use information obtained from the Secretary of the 
Department of Health and Human Services and the Treasury for the 
purpose of determining the attributable income of a veteran.
  The VA estimates that this proposal should save the VA money, Mr. 
President. They estimate that more than $11 million would be saved in 
fiscal year 2001, growing to more than $13 million in fiscal year 2005.
  I ask that the full text of the bill be included in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 3010

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

[[Page S8112]]

     SECTION 1. IMPROVEMENT OF PROCEDURES FOR DETERMINATION OF 
                   INABILITY TO DEFRAY EXPENSES OF NECESSARY 
                   MEDICAL CARE.

       (a) Exclusion of Certain Assets From Attributable Income 
     and Corpus of Estates.--Subsection (f) of section 1722 of 
     title 38, United States Code, is amended--
       (1) in paragraph (1), by inserting before the period at the 
     end the following: ``, except that such income shall not 
     include the value of any real property of the veteran or the 
     veteran's spouse or dependent children, if any, or any income 
     of the veteran's dependent children, if any''; and
       (2) in paragraph (2), by striking ``the estates'' and all 
     that follows and inserting ``the estate of the veteran's 
     spouse, if any, but does not include any real property of the 
     veteran, the veteran's spouse, or any dependent children of 
     the veteran, nor any income of dependent children of the 
     veteran.''.
       (b) Alternative Year for Determination of Attributable 
     Income.--That section is further amended by adding at the end 
     the following new subsection:
       ``(h) For purposes of determining the attributable income 
     of a veteran under this section, the Secretary may determine 
     the attributable income of the veteran for the year preceding 
     the previous year, rather than for the previous year, if the 
     Secretary finds that available data do not permit a timely 
     determination of the attributable income of the veteran for 
     the previous year for such purposes.''.
       (c) Use of Income Information From Certain Other Federal 
     Agencies.--Section 5317 of that title is amended--
       (1) by redesignating subsections (f) and (g) as subsections 
     (g) and (h), respectively; and
       (2) by inserting after subsection (e) the following new 
     subsection (f):
       ``(f) In addition to any other activities under this 
     section, the Secretary may utilize income information 
     obtained under this section from the Secretary of Health and 
     Human Services or the Secretary of the Treasury for the 
     purpose of determining the attributable income of a veteran 
     under section 1722 of this title, in lieu of obtaining income 
     information directly from the veteran for that purpose.''.
       (d) Permanent Authority To Obtain Information.--(1) Section 
     5317 of that title, as amended by subsection (c), is further 
     amended by striking subsection (h).
       (2) Section 6103(l)(7)(D) of the Internal Revenue Code of 
     1986 (26 U.S.C. 6103(l)(7)(D)) is amended in the flush matter 
     at the end by striking the second sentence.
                                 ______