TRICARE Benefits - Health Care Cost-Shifting to Military Beneficiaries
Issue: The FY07 Defense budget would triple health fees for military retirees under age 65:
- Raising $230 single/$460 family TRICARE Prime enrollment fee as high as $700/$1,400
- Raising annual $150 single/$300 family TRICARE Standard fees as high as $560/$1,120
- Prime and Standard fees would be increased annually by medical inflation, starting in 2008
- Retail pharmacy copays would be raised 67% for all beneficiaries.
Background: DoD claims rising health costs impinge on weapons programs. The Joint Chiefs endorse the fee hikes because their leaders tell them that's the only way they'll get weapons funding. Defense budgeteers assume the changes will save money by causing hundreds of thousands of retirees to stop using their earned military benefits. Defense leaders say fees should bring military closer to civilian practices. Comparing TRICARE with corporate practices is inappropriate. Exceptional military medical and retirement benefits are the primary offsets for enduring decades of extraordinarily arduous service conditions. Military retirees pay huge "up front" health premiums through 20 years of service and sacrifice. Recruiting problems show few Americans are willing to pay that heavy premium for that benefit.
The DoD proposed increases are grossly out of line with benefits enacted by Congress. Proposed increases would far outstrip annual retired pay increases and greatly erode retired compensation value. Congress knew enacting TRICARE For Life wouldn't be cheap. Don't penalize retirees for Congress' action. Penalizing those who serve arduous 20- to 30-year military careers would be inconsistent with past congressional action. For the last two years, Congress refused to accept VA health fee increases for nondisabled veterans who had served as few as two years. Tripling and quadrupling fees for those who served 20-30 years in uniform would be even more inappropriate.
The Nation's obligation to military retirees exceeds corporate obligations. The government has a moral and practical reciprocal obligation to provide benefits commensurate with the extraordinary commitments it requires from career servicemembers. Mid-career military losses can't be replaced like civilians can. Eroding benefits for career service can only undermine long-term retention/readiness. Today's troops are very conscious of Congress' actions concerning their future benefits. MOAA surveys show 95% of active members oppose the DoD plan. Reducing military retirement benefits would be penny-wise and pound-foolish when recruiting is already a problem and an overstressed force is at increasing retention risk.
TRICARE has ongoing problems. Doctors say TRICARE is one of the lowest-paying plans in the country and imposes far more administrative hassles than other plans. Beneficiaries at many locations have difficulty finding providers willing to take them. See attachment 1 for a list of needed fixes. The country can afford to pay for both weapons and military health care. Today's defense budget (in wartime) is only 4% of GDP, one-third lower than the peacetime-year average since WWII. If we can afford hundreds of billions in pork and tax cuts, we don't need to make military retirees pay for weapons.
MOAA Position: The government has many options to contain costs without penalizing beneficiaries. See (additional information) for a list of potential cost-saving options. List items 2 and 3 alone could save as much as the DoD plan.
Key Bills/Status: Once again Representative Chet Edwards (D-TX 17th) and Walter Jones (R-NC 3rd) have introduced The Military Retirees Health Care Protection Act, H.R. 579, a bill that would establish the principle that it's Congress's responsibility, not the Pentagon's, to establish when and by how much military health fees will be increased.
Senators Frank Lautenberg (D-NJ) and Chuck Hagel (R-NE) have introduced S. 604, a bipartisan bill similar to H.R. 579 that would bar the Pentagon from imposing large TRICARE fee increases.
MOAA fact sheet, 14 March 2007
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