• Drastically cut financial support for up to 80 percent of the veterans in the nation's 129 state-run homes.

• Let the VA reduce the number of nursing-home beds from the 13,391 required by law.

• Put a hold on $104 million in grants slated to rehabilitate and build new state veterans homes.

The proposed changes raise serious concerns about how to pay for operation of Hawai'i's first state-run veterans home.

Almost 112,000 veterans live in Hawai'i, with almost one in five older than 70. Currently, the only long-termicare beds are in the 60-resident VA Center for Aging near Tripler Army Medical Center. The center is designed primarily for rehabilitative services, and not the longer-term care provided in veterans' nursing homes.

"The president's decision to slash payments to state homes could have a devastating effect on the soon-to-be built Hilo home," said Sen. Daniel Akaka, D-Hawai'i. "While decisions have yet to be made about which veterans can stay at the Hilo home, I question how the home would be operational if the administration was to hold back so much of the day-to-day funding for it."

Not enough bed space

The growing need for bed space is apparent from a glance at those veterans seeking outpatient care at the Spark M. Matsunaga VA Medical Center, said Rona Adams, former combat nurse, president of the O'ahu Chapter of Vietnam Veterans of America and a retired registered nurse.

"I don't understand how they can possibly do this," Adams said. "There isn't enough space already."

Older patients — veterans of World War II and Korea, many of whom can't afford healthcare elsewhere — vie with younger veterans fresh from Iraq and Afghanistan, she said.

"And we (Vietnam veterans) are getting up there," she said. "We'll be there soon."

Most Vietnam veterans are now in their 50s and 60s.

"How can they do this?" Adams said of the administration's proposed cuts. "I'm appalled. I'm in a state of disbelief."

"Well," said Eugenia Woodward, an 81-year-old World War II veteran who repaired aerial cameras for the Navy and now lives in Mililani, "maybe if he (Bush) would finish up the war, he'd have the money for these things."

Woodward said although she'd like to see more bed space for veterans in nursing homes, she understands that war expenses could take priority.

"Money only goes so far," she said. "There isn't much you can do about it."

'We're getting shafted'

Margaret Hatchie, a Navy veteran of Korea whose four brothers also served during Korea and Vietnam, said she did not approve of the proposed cuts.

"We're getting shafted," the 72-year-old Wai'anae resident said. "We're not getting the benefits we're entitled to get."

Hatchie, who, like Woodward, is a member of a Navy veterans group called Na Nalu o Hawaii — WAVES of Hawaii — said she feels sorry for the generation of soon-to-be veterans now serving in the military.

"If we're not getting our benefits now," she said, "can you imagine what will happen to them?"

Congress is fighting back. Both the House and the Senate adopted budget plans that do not include the Bush proposal to cut support to the state veterans homes, havens for more than 40,000 former service members and counting.

Sen. Dan Inouye, D-Hawai'i, a decorated combat veteran, is among those committed to preserving veterans services, said Mike Yuen, an Inouye spokesman in Washington.

"As Sen. Inouye has noted, we cannot forget our troops when they are no longer on the battlefield," Yuen said. "The senator will work with the Hawai'i congressional delegation and his colleagues in the Senate to ensure that the veterans home planned for Hilo will be built and put into service."

Under the proposed budget, the VA would withhold $104 million in grants to rehabilitate and build new state veterans homes until it can finish a study on the system's capacity and its future needs.

Under the state veterans home program, costs are shared between the federal government and states. The VA provides 65 percent of a state home's building cost and the state contributes 35 percent.

The state, responsible for operations and maintenance, receives $59.36 a day from the VA for each eligible veteran living in the state-run nursing home. That funding stream would be sharply reduced if the VA stipend, known as a per diem grant, can be applied only to veterans with disabilities related to service or those who are catastrophically disabled.

The administration's budget proposal still has several steps to go before the battle is over, and Miles Takaaze, a spokesman for Hawai'i Health Systems Corp., which is overseeing the Hilo veterans home project.

He said the state is not going to assume the worst.

"We understand the budget concerns at the national level," he said, "but it is not final yet. We are moving forward with the construction of the project."

Groundbreaking for the Hilo veterans home, to be built on the site of an old Hilo hospital building that went up in 1952, is expected to go forward in August, he said. It will have a 95-bed, long-termicare home plus adult daycare.

"The first phase was demolition (of the old building) and we're almost finished with the last part of that," he said. "We are expecting to welcome the first VA resident on Dec. 31, 2006. We have to move forward. The commitments have been made. The money has been approved."

Savings of millions

Dr. James F. Burris, the VA's chief consultant for geriatrics and extended care, said that the nation is facing a time of "constrained national resources" and that the VA does not have enough money to provide nursing home care to all the veterans who might need it.

"It's not just in VA but throughout the federal government that we're facing a very large deficit and government has to make responsible decisions about how to allocate the resources that are available," he said.

To advance that goal, VA Secretary Jim Nicholson said, the agency wants to revise the criteria for long-term care to focus on veterans who became disabled while on active duty and those who have catastrophic injuries, such as spinal cord problems or traumatic brain injury. Included in the new focus would be patients requiring short-term care after a hospital stay such as for hip replacements and those needing hospice or respite care, he said.

The change would mean a saving of $496 million in long-term care next year for the VA, Nicholson said.

Most of the amount saved, or $293 million, would come from reducing the per diem grants to the states, said Dr. Jonathan B. Perlin, the VA's acting undersecretary of health.

Veterans advocates say they face a battle in protecting the homes because the Bush administration wants less overall federal spending.

"We fear that even if we're successful in beating back this proposal this year, it's almost certain to come up again next year," said Dennis Cullinan, national legislative director for the Veterans of Foreign Wars.

New eligibility criteria

The problem will get only worse as veterans, while shrinking in total number, get older, said Lourdes E. Alvarado-Ramos, assistant director for the Washington Office of Veterans Affairs. Within the next decade, the number of veterans who are 75 and older is going to double and that is the group that is going to need more care, she said.

"Not all of them live at a place where they can just receive services and have a spouse who can take care of them, especially our Vietnam veterans, many of whom burned their bridges with their families," said Alvarado-Ramos, also president of the National Association of State Veterans Homes. "It's going to create a bigger dilemma for both the VA and the states."

Burris of the VA said the new eligibility criteria, if approved, would only apply to veterans entering the VA-run and state-run nursing homes after the proposal is adopted. All current residents would continue to receive grants, he said.

Burris said veterans who don't have disabilities related to active-duty service or who are not considered in need of catastrophic care would still be able to use Medicare, Medicaid and private money to pay for the nursing home care.

Alvarado-Ramos said that about 80 percent of the veterans currently in state-run nursing homes would no longer qualify for the VA daily support grants if the Bush proposal is approved.