WASHINGTON – The Obama administration has dropped a proposal that would force private insurance companies to pay for the treatment of military veterans who suffered service-related disabilities and injuries.

The proposal had been considered as part of the president's budget and would have required private insurance companies to reimburse the Department of Veterans Affairs in such cases. It was opposed by the Disabled American Veterans and other veterans who were invited to the White House Monday to discuss the plan with President Obama.

Veterans then met Wednesday with White House Chief of Staff Rahm Emanuel and Speaker of the House Nancy Pelosi. Pelosi announced the decision to drop the proposal following her meeting.

"Now that this ill-advised proposal is off the table, the DAV looks forward to working with the administration and Congress on crafting a good budget that will include sufficient appropriated dollars to cover veterans' healthcare needs" said David W. Gorman, executive director of the DAV's Washington headquarters.

A top priority for the DAV and other groups is passage of the recently introduced Veterans Healthcare Budget Reform and Transparency Act. The measure would authorize Congress to approve VA medical care appropriations one year in advance of the start of each fiscal year.

"This budget reform legislation would ensure sufficient, timely and predictable funding for veterans' healthcare," Gorman said. "It has the added benefit of making government more efficient, transparent and accountable. These are three key elements that President Obama, Congress and veterans all agree are needed in these challenging times. And if enacted in conjunction with the fiscal year 2010 budget, advance appropriations for 2011 would not add one dime to the 2010 deficit."

The 1.2 million-member DAV, a non-profit organization founded in 1920 and chartered by Congress in 1932, represents this nation's disabled veterans.

"Our message to the president was simple and direct: that our government must not abandon its moral responsibility to the men and women who have sacrificed so much for our freedoms,” Gorman said.