Pentagon losing battle over health fees
Lawmakers prepare to abandon proposed fee increases on health care for
some military retirees.
BY DAVID LERMAN
(202) 824-8224
March 15, 2006
http://www.dailypress.com/news/local/dp-87415sy0mar15,0,1706034.story?coll=dp-news-local-final
WASHINGTON -- A Pentagon plan to raise health-care premiums on military retirees
younger than 65 appeared all but dead on Capitol Hill after key lawmakers
signaled their opposition Tuesday.
The dramatic proposal to increase fees and deductibles by as much as threefold
in some cases - part of the Defense Department's 2007 budget - has weathered a
storm of protest from veterans groups since it was unveiled last month.
"That's obviously something I don't think is going to happen over a two-year
period," said Sen. Lindsey Graham, R-S.C., chairman of the Senate Armed Services
subcommittee on personnel, who held a hearing on the plan Tuesday. "To me, this
is a long-term process."
Military retirees - veterans with at least 20 years of service - complained it
was unfair to ask them to absorb steep increases in health-care costs in the
next two years. Many say they had been promised free life-time health care when
they enlisted.
The proposed increases would hit an estimated 3 million retirees younger than
65, including thousands in Hampton Roads. Active-duty personnel would not be
affected.
"We see the proposed health-care increases as inappropriate and
disproportionate," said retired Vice Adm. Norb Ryan Jr., president of the
Military Officers Association of America. Referring to his members, Ryan said,
"They know they already paid huge up-front premiums in the form of years of
sacrifice."
Veterans groups appear to have beaten back the Pentagon plan barely a month
after it was first introduced.
Leaders of the House Armed Services Committee have already criticized the
proposal and other House members are scheduled to introduce legislation today to
block the plan.
Pentagon leaders have pushed hard for the measure, which they say is needed to
curb soaring health-care costs that threaten to siphon money away from critical
weapons programs.
The Defense Department's health-care costs have nearly doubled over the past
five years, from $19 billion in 2001 to more than $37 billion this year,
according to congressional testimony. By contrast, this year's shipbuilding
budget is about $11 billion.
Military leaders noted there has been no increase in annual premiums for Tricare
- the military health insurance system - for 11 years. As a result, they said,
premiums have not kept pace with inflation. Beneficiaries paid 27 percent of
their total health care costs in 1995, compared to just 12 percent today.
The Pentagon proposal, officials said, would adjust current fees and deductibles
to account for inflation since 1995. But many retirees would be hit with a new
enrollment fee for the first time. Tricare Standard, the military's traditional
fee-for-service option, currently has no enrollment fee. The Pentagon plan would
impose a fee for retired officers next year of $150, or $300 for a family. The
fee would be less for retired enlisted personnel.
"It would move the earned medical entitlement into an insurance program," said
Tanna Schmidli, who heads the National Military Family Association. "Unless
retirees pay this premium, they will be locked out of any care at a military
treatment facility."
Graham, the subcommittee chairman, said he was open to fee increases in the
future but would not be rushed into an increase this year. "Erosion of benefits
is coming," he said. "The question is, will it come in a way that people can
afford?"