Health Care Cost-Shifting to Military Beneficiaries
MOAA
January 15, 2006
Issue: The Defense budget submission for FY2007 would triple or quadruple some beneficiary health costs, especially retired beneficiaries under age 65, over three years, beginning Oct 1, 2006:
Raising $230 single/$460 family TRICARE Prime enrollment fee as high as $750/$1,500
Raising annual $150 single/$300 family TRICARE Standard fees as high as $600/$1,200
Prime and Standard fees would be increased annually by medical inflation, starting in 2009
$3 generic/$9 brand name retail pharmacy copay would be raised (for all retired beneficiaries and family members of currently serving personnel) to $5/$15, effective FY2007.
Background: DoD is concerned that rising healthcare costs are competing with weapons programs. The Joint Chiefs have endorsed increasing TRICARE fees because they have had this choice forced on them by their political leaders. Defense budgeteers assume the changes will save money by shifting 14% of pharmacy users away from retail outlets and causing 600,000 current beneficiaries to exit TRICARE by 2011. Defense leaders assert such increases are needed to bring military beneficiary costs more in line with civilian practices.
Discussion: Comparison with corporate practices is inappropriate. Military medical and retirement benefits must be markedly better than civilian benefits, since they are the primary offsets for enduring decades of extraordinarily arduous military service conditions that constitute military members' unique contributions toward their unique retirement and health benefits.
The proposed increases are grossly out of line with benefit levels enacted by Congress, even allowing for interim inflation since current fees were established. Proposed increases would far outstrip annual retired pay increases and greatly erode retired compensation value. Congress knew enacting TRICARE For Life would entail significant costs. Forcing under-65 retirees to help pay for TFL is simply wrong.
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 has a far greater obligation to military retirees than corporations have to theirs. In demanding such extraordinary commitments from career servicemember, the government assumes a reciprocal obligation to provide benefits commensurate with their extraordinary sacrifices. This is a practical as well as moral obligation. 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 toward those who preceded them in service. 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.
Ongoing problems remain with TRICARE. Providers consistently say TRICARE is one of the lowest-paying plans in the country and imposes administrative requirements beyond those of other plans. Beneficiaries at many locations have difficulty finding providers willing to take them.
The country can afford to pay for both weapons and military health care. Today's defense budget (in wartime) is less than 4% of GDP, about half the peacetime-year average since WWII. A country that can afford hundreds of billions in pork and tax cuts doesn't need to make military retirees pay for weapons.
MOAA Position: Military people already pay larger premiums for their care than civilians ever have or will - through extraordinary personal and family sacrifices. Reducing retirement benefits jeopardizes long-term retention and readiness, especially in wartime. The government should be doing more to improve TRICARE and promote efficiency rather than shifting more costs to beneficiaries.