Obama’s new health insurance plan has been criticised by several veteran group representatives, after a proposal was forwarded which would bill private health insurance companies for combat and service – related medical care.

The bill is included in President Obama’s fiscal year 2010 budget plan. Currently, the Department of Veterans Affairs covers those costs and bills health insurers only for treatment for conditions unrelated to veteran’s military service.

In February, 11 veterans groups wrote a letter to Obama stating their anger over the matter: “There is simply no logical explanation for billing a veteran's personal insurance for care that the VA has a responsibility to provide."

The groups pointed out that such a policy would discourage employers from hiring veterans with disabilities, increase insurance premiums for disabled veterans and break a promise on the U.S. government's "sacred obligation" to care for the injuries veterans sustained during service.

Paul Rieckhoff, executive director of Iraq and Afghanistan Veterans of America, said: “Veterans of all generations agree that this proposal is bad for the country and bad for veterans. If the president want’s to cut costs, they can start at AIG not the VA.”

VA Secretary Eric Shinseki said that the plan was just a “consideration” and noted that “ a final decision hasn’t been made yet.”