[HEALTH.MIL] Tricare Facing Fiscal Fight Over Funding

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  • Date: Thu, 22 Sep 2011 15:50:56 -0500

Tricare Facing Fiscal Fight Over Funding

By Tom Philpott 
Special to The Stars and Stripes
Published: September 22, 2011

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Tricare users would see out-of-pocket costs rise by $27 billion over the next
decade, through higher pharmacy co-payments at retail drug outlets and a
first-ever Tricare for Life annual fee, under President Obama's $3 trillion plan
to address the nation's massive and growing debt.

The same plan would protect current members from retirement changes but would
form a powerful commission to modernize military retirement for future
generations. Like base closing commissions, final recommendations would have to
be wholly rejected or accepted. The president and the Congress could not make
select changes.

The White House debt cutting plan, delivered to the Joint Select Committee on
Deficit Reduction, confirms what advocates for Tricare beneficiaries had feared:
that they are expected to share in the fiscal sacrifices to be asked of millions
of Americans drawing federal entitlements.

Military associations sound equally alarmed by the rhetoric in the White House
recommendations suggesting that key military benefits are just too generous and
must be brought nearer to what civilians receive.

"We were shocked at the tone of it," said Steve Strobridge, director of
government relations for Military Officers Association of America. "It talks
about, basically, civilianizing the military benefits package. I mean it
expresses that as a goal, which to us is absolutely anathema. The whole point of
the benefit package is to provide an offset for unique conditions of military
service. You can't civilianize the package without civilianizing service
conditions. If the last 10 years show us anything it's that military conditions
are getting worse than when these programs were designed."

Two Tricare features are targeted. Users of Tricare for Life (TFL), the prized
supplement to Medicare for beneficiaries 65 and older, would pay an annual fee,
starting at $200 in 2013, with adjustments for inflation.

The White House notes that TFL users now pay only the Medicare Part B premium,
$110 a month for most, and pharmacy co-pays. Otherwise they face no out of
pocket health costs. By contrast, private sector elderly, in 2009, paid on
average $2100 a year for their "Medigap" policy.

The annual TFL fee would save a $6.7 billion over 10 years.

Obama's (plan) would save another $20 billion across a decade by raising
pharmacy co-pays in the Tricare retail network, sparing only active duty
members. Current co-pays "have lagged" behind other plans, it says.

Family and retiree drug costs at retail outlets would move "closer to parity
with the most popular federal employee health plan, BlueCross BlueShield
Standard, and closer to the health plans that most Americans have from their
employers," the White House report explains.

Federal civilians now pay about $45 to get a brand name drug at retail. Military
beneficiaries pay $9 and it rises next month to $12. Obama also wants military
drug co-pays to rise automatically with costs to the government, thus shifting
from a set dollar co-pay to a percentage formula. So co-pays for generic drugs
at retail would be set at 10 percent of the Defense Department's cost for the
medicine. Sometime after 2013 this would climb to 20 percent. Co-pays for brand
names would start at 15 percent of cost and be raised to 30 percent over some
yet unspecified period.

In proposing a commission to "reform" retirement, with authority similar to that
of the 2005 Base Realignment and Closure Commission, the White House said the
current system "is now out of line with most other government or private
retirement plans."

Even as associations like MOAA and FRA alerted members to details of Obama's
plan, and urged that e-mails and letters of protest flood Congress, the outcome
of this fight to protect benefits appeared more uncertain than in battles past,
with the real chance changes could become law by year's end.

NOTE:  Elected officials may be contacted via

The unusual structure adopted in August to reach a final debt deal -- with the
president and Congress conceding to the joint or "super" committee of 12
lawmakers responsibility to shape a take-it-or-leave-it legislative package by
November 23 -- almost certainly handcuffs the influence of lobbyists to derail
whatever package of cost curbs the committee's majority embraces.

"It changes the dynamic considerably," said a key congressional staff member.
"The changes get rolled into a package and all of a sudden it looks like just
your fair share. And we shouldn't take our fair share?"

The super committee's power to cut a final deal leaves Tricare advocates
"automatically at a disadvantage" that they didn't face defeating the Bush
administration's call for hefty Tricare fee hikes starting in 2006. Those ideas
had to clear familiar ground, the armed services committees. "They can influence
those committees very dramatically," the staffer said.

Only two super committee members also serve on armed services, though all
standing committees are invited to share views on cuts they favor and oppose.
Sen. Jim Webb (D-Va.), who chairs the Senate military personnel panel, said he
views lifetime health care as "part of a moral contract between our government
and those who have stepped forward to serve. For this reason, I oppose the
president's proposals to impose new Tricare fees on military retirees and other

But Arnold Punaro, a retired Marine major general, strongly supports initiatives
to slow Tricare cost growth as well as retirement reforms for new entrants. He
applauds the planned retirement commission, urging that a prominent military
leader, like retired Gen. Colin Powell, serve as chairman.

Punaro is an influential member on the Defense Business Board, which has
recommended to the defense secretary broad changes in retirement and new
initiatives to curb "out-of-control" health costs.

"The path advocated by the Praise-the-Lord-and-Pass-the-Benefits outfits are
pushing this nation either to a hollow military or to a military way too small
to deal with the threats we face," Punaro said.

To comment, e-mail milupdate@xxxxxxx, write to Military Update, P.O. Box 231111,
Centreville, VA, 20120-1111 or visit: www.militaryupdate.com

SOURCE:  Stars & Stripes web site at http://www.stripes.com/

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