Of Two Minds: Charitable and Social Insurance Models in the Veterans Benefit System

Abstract

There is widespread dissatisfaction with the veterans benefit administration process. The Department of Veterans Administration (VA or DVA) and its subsidiary agencies responsible for processing claims, the Veterans Benefit Administration (VBA) and the Board of Veterans Appeals (BVA), face criticism for lengthy delays in the processing of claims and a significant backlog of cases, for inadequate or poorly prepared records, and for unfair or arbitrary decisions. A variety of criticisms have also been leveled against the Court of Appeals for Veterans Claims (CAVC), the Article I court that reviews administrative decisions.

Many of these problems are related to the veterans benefit system's uneasy mixture of two basic models of government benefits. The evolution of the system was driven by what I call the “charity” model of government benefits that prevailed under the traditional common law. In the charity model, whatever moral obligation the nation may owe its veterans, the fulfillment of that responsibility is, from a legal perspective, a voluntary undertaking. In this model, legal protections such as adversarial procedures and judicial review are unnecessary, inappropriate, and undesirable. Because the veterans benefit system emerged during a time when the charity model prevailed, many of its distinctive features reflect that model. The charity model no longer pertains, if it ever did, to other government benefit programs, such as Social Security, Welfare, and Medicare or Medicaid, which operate under what I shall call the “social insurance” model. In the social insurance model, benefits are a form of social contract through which the government uses its taxing and spending powers to spread the costs of old age, disability, unemployment, and poverty. While these programs are not perfectly analogous to private insurance, they create entitlements subject to the protections of the law, including procedural due process and independent adjudication.

Although veterans benefit programs have come to exhibit many characteristics of the social insurance model, the claims determination process has been resistant to change and continues to incorporate many elements of the charity model, including nonadversarial procedures and limited judicial review. In my view, the disjunction between the charity-based assumptions of the claims determination process and the social insurance form of benefit programs contributes to many of the problems identified by critics of the system. To support this conclusion, I begin with a general description of the charity and social insurance models of government benefits that identifies the key features of each model and a short history of the veterans benefit system that examines the evolution of the system in terms of the two models. This discussion suggests that the benefits adjudication system was shaped and continues to reflect the charity model of government benefits, even as the underlying benefit programs have taken on many attributes of social insurance programs. I then explore the manifestations of the mixed model of veterans benefits, with particular reference to the use of nonadversarial procedures and the lack of independent adjudication. Finally, I consider the implications of this analysis for possible reform.