Overhauling the way civilian contractors hurt in war zones are cared for could save as much as $250 million a year, according to a new Department of Defense study. The extensive review of the taxpayer-funded system said that the savings would occur if the government issued its own insurance to cover medical care and disability payments for injured civilians. The U.S. now pays more than $400 million annually to AIG and a small number of other carriers to purchase special workers' compensation insurance policies. "The current system for providing health insurance and workers compensation for our military contact workers in Iraq and Afghanistan is broken and wasting millions of dollars in payments to companies like AIG. If the Pentagon, the Department of Labor and Congress modernize the current insurance system, we can save up to $250 million and finally give these workers and their survivors the basic health care and support they need and deserve," said Senator Bernie Sanders.
As much as 35 percent of the outlays under the Defense Base Act pad company profits, the study found. "In the long run, the self-insurance alternative may have the greatest potential for minimizing... insurance costs, and it has several administrative and compliance advantages as well," the report said.
Not only is the current system needlessly expensive, it also doesn't work well. Civilian contractors have faced protracted battles with insurance carriers to obtain medical treatment and disability pay, according to an investigation by ProPublica, the Los Angeles Times and ABC News.