[HEALTH.MIL] The Case Against Pay Caps, Higher TRICARE Fees

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The Case Against Pay Caps, Higher TRICARE Fees

Apr 25, 2013

Tom Philpott


'Pros' Make Case Against Pay Caps, Higher Tricare Fees

Military folks upset by Obama administration proposals to cap pay raises, to
phase-in sharply higher co-pays on prescriptions filled off base and to raise
TRICARE costs on working-age retirees also tend to rail against such changes
with arguments politicians can shrug off as stale or in error.

Two examples from the flood of feedback to recent columns are:

-- "We were promised free health care for life" and

-- "Before Congress votes to raise fees on those who secure our freedoms they
should first pay more for their own health care."

The flaw of the first is that "free lifetime" care promises were made to older
generations and not to working-age retirees who are the main targets of proposed
fee hikes. Also, federal appellate courts ruled a decade ago that benefits
promised by recruiters or even commands at time of reenlistment aren't legally
binding for the government if not backed by federal statute.

To the second popular argument, U.S. senators and representatives have the same
health insurance as federal civilian employees so they already pay higher
premiums -- as they should -- than do military folks, and their premiums
increase annually with overall health costs.

But far more effective arguments against compensation curbs are being made by
representatives of The Military Coalition, an umbrella group of associations and
veteran groups, who last Wednesday testified before the Senate armed services'
subcommittee on military personnel.

Their talking points still seem to resonant with lawmakers even as government
functions get squeezed by a debt crisis and frightened politicians avoid hard
choices by using the automatic pilot of budget sequestration.

Though only several senators heard their points this day, coalition reps will
continue to make them privately to key lawmakers and congressional staff. Still,
it will be a Herculean task to avoid pay caps and higher TRICARE fees, certainly
if lawmakers refuse to reach a debt deal to end sequestration. The Obama defense
budget request for 2014 doesn't even reflect $52 billion in deeper cuts that
would occur if sequestration were not repealed.

Kathleen Moakler with National Military Family Association warned the
subcommittee that because of sequestration, and a recent six-month delay in
passing the fiscal 2013 defense appropriations bill, "military families now
doubt our nation's leaders' commitment to supporting their service."

Steve Strobridge, a retired Air Force colonel who retires again this month, from
Military Officers Association of America, after 19 years of hardnosed advocacy
for troops, challenged the contention of multiple defense secretaries that
personnel costs, particularly for TRICARE, are out of control.

 "Claims of exploding military health costs cite growth since 2001 as if that
were a reasonable starting point. But it's not," he told the subcommittee.
"Congress enacted TRICARE for Life in 2001 to correct the ejection of older
retirees from military health care in the six years before that. There was a
spike as they returned to coverage in 2002 and 2003. But the cost growth has
actually been declining ever since."

He argued that personnel costs "are the same share of the defense budget -- a
little less than a third -- that they've been for the last 30 plus years. In
fact the Department of Defense has used the health account as a cash cow to fund
other needs, diverting $700 million in surplus funds last year and $2.5 billion
over the last three years."

Military health benefits are excellent and carry lower fees into retirement
because members paid "in-kind" premiums civilians don't face over many years of
dangerous and arduous service, Strobridge said.

He suggested Defense officials refuse to end waste in the health system, such as
operating separate medical commands for the Army, Air Force and Navy, because
it's politically difficult, and instead find it easier to propose that
beneficiaries pay more for their care.

Sen. Tim Kaine (D-Va.) challenged the coalition's opposition to proposals to
means test the level of TRICARE fees based on rank at retirement. Strobridge
refused to budge, arguing that means testing is appropriate for welfare payments
but not benefits earned through service.

For the coalition, Joe Barnes with Fleet Reserve Association argued that current
service members deserve a full 1.8 percent pay raise in January to match private
sector wage growth versus a one percent federal pay cap proposed by the
administration. He warned against returning the military to an era of pay gaps
and retention challenges last seen in the late 1990s.

"Pay comparability is directly related to long-term readiness," he said.

Marshall Hanson with Reserve Officers Association had perhaps the hardest task,
arguing for new initiatives to address "benefit parity issues" for Reserve and
Guard forces compared to active duty colleagues.

Drilling reservists, for example, earn a Reserve GI Bill education benefit
valued at 11.5 percent of the Post-9/11 GI Bill, Hanson said. Also, Reserve and
Guard members deployed for war can lower the age at which they retire. But a
glitch in law makes these members lose months off the calculation if their
deployment period spans the start of a new fiscal year.

At the same hearing, Defense Department witnesses defended the pay caps and
TRICARE fee increases as necessary in tight budget times to keep smaller defense
budgets "in balance" and protect readiness.

Key lawmakers sent mixed signals. Sen. Kirsten Gillibrand (D-N.Y.), subcommittee
chair, said she remains "very skeptical about increasing costs for military
members and veterans."

But Sen. Lindsey Graham (S.C.), ranking Republican, suggested he could support
fee increases if they made TRICARE more sustainable.

"Because if it's not sustainable, it's a false promise," said Graham. He said he
wants to avoid a situation where retiree health care costs and a shrinking
defense budget lessen the capabilities of active duty forces.

CORRECTION: In my column two weeks ago, describing the proposed TRICARE fee
increases, I made a significant error of omission. The TRICARE for Life (TFL)
increases, if adopted, would impact only those retirees who age into TFL
benefits after enactment of the law. That grandfathering protection, by the way,
would not apply to higher prescription fees described last week.

To comment, write Military Update, P.O. Box 231111, Centreville, VA, or email
milupdate@xxxxxxx or twitter: Tom Philpott @Military_Update.


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