By THERESA POULSON

The Obama administration recently backed down from a controversial veterans' health care proposal in the face of widespread opposition, wasting an opportunity to win support from veterans, one vets' advocate says.

President Obama's budget outline for Veterans Affairs would increase the department's budget significantly, but it also called for billing veterans' private insurance providers for the treatment of some battle-related injuries. The proposal would have saved about $540 million, less than 1 percent of the department budget.

When the proposal came to light, veterans' advocates were quick to express opposition, and dozens of lawmakers from both sides of aisle were vocal in their disapproval, sending letters to the administration and calling any appropriations bill containing the provision "dead on arrival." The administration quickly changed course, but did so having hurt its reputation among veterans.

"This was one of the largest increases for VA by an administration, and that all got lost in the message because of that proposal," said Joseph A. Violante, national legislative director for Disabled American Veterans. "It's the government's responsibility, not my insurance company's responsibility, to care for those disabilities that resulted from my honorable service in the military, and we believe that it was a breach of a sacred principle that this country was founded on."

While the third-party billing plan wasn't a direct reneging of Obama's promise to expand benefits to more veterans, it brings to light the difficulties of finding ways to trim the budget in order to make funds available for new initiatives, such as bringing additional veterans into the VA network.

The proposal "wasn't an attempt to swindle veterans," said Jesse Broder Van Dyke, spokesman for Senate Veterans Affairs Chairman Daniel Akaka, D-Hawaii. "The money saved would have been kept at VA, but I think that this was a bad idea and it looked particularly bad." But Broder Van Dyke finds Obama's quick reversal encouraging, and doesn't question the administration's commitment to veterans' care. "They have shown their commitment to veterans through increased funding, swift transition appointments, and high-level meetings seeking out the recommendations of the veterans service organizations," he said.

Though the plan would have meant savings for the department, the cost of care would have been passed along to others, Violante said. "If you look at a severely disabled veteran, somebody who might be missing limbs or has traumatic brain injury or needs a lot of care ... their insurance company is not going to pay those additional costs without passing them on to somebody, whether it's the veteran themselves -- increasing their premiums -- or spreading that increase among all policy holders." The prospect of increased premiums could also lead employers to discriminate against hiring veterans for fear of bringing them into their insurance network, Violante argued.

The DAV is backing legislation that would ban billing private insurance companies for treatment of service-related disabilities. Three measures have been introduced in the 111th Congress: H.Res.249, H.R.1591 and H.R.1658.