Graham forecasts House-Senate deal on TRICARE fee
April 26, 2012
by Tom Philpott
The House armed services subcommittee
on military personnel has declined to give the Obama administration new
authority it sought to phase in higher TRICARE fees on military retirees
over the next four years and to peg future TRICARE fee hikes to medical
But in marking up its version of the
fiscal 2013 defense authorization bill, the subcommittee did not adopt
discreet language, as it has in the past years, that would block any
TRICARE fee increases.
It also did not include language, as it
has previously, that would prohibit the Department of Defense from using
existing authority to raise co-payments on prescription drugs for
dependents and retirees who use neighborhood pharmacies or the TRICARE
mail order pharmacy program.
Another sign that the issue of higher
TRICARE fees is not settled for this year comes from Sen. Lindsey Graham
(S.C.), ranking Republican on the armed services’subcommittee
on military personnel. A day before the House panel marked up its
portion of its defense bill, and stayed silent on raising medical
out-of-pocket costs for retirees, Graham predicted a compromise on
health fee hikes between the two chambers by Sept. 30
"Between now and the end of the fiscal year, I hope we can
convince the House to accept some adjustments in premiums for TRICARE,
because it’s just unsustainable right now,"Graham
told me in a phone interview.
So far House Republicans oppose the
slicing $487 billion from defense budgets over the next decade, a figure
agreed to in the Budget Control Act enacted last year.
About 10 percent of those cuts must
occur to personnel accounts, defense leaders argue, primarily by raising
out-of-pockets costs on military retirees through higher enrollment
fees, deductibles and co-payments. Without higher fees, national
security is at greater risk, they contend.
"If Congress rejects all of the modest changes we've
proposed in TRICARE fees and co-pays for retirees, than almost $13
billion in savings over the next five years will have to be found in
other areas such as readiness, or we could be forced to further reduce
our troop strength,"Defense Secretary Leon Panetta told Pentagon
reporters this month.
But Rep. Buck McKeon (R-Calif.),
chairman of the House Armed Services Committee, said in a speech
Wednesday the panel will "seek to eliminate
the military health care fees proposed by the
Ignoring that retirees are targeted for
most of the fee hikes, McKeon added: "Our forces on the
front lines shouldn’t have to
worry about caring for their families’health back
The House subcommittee mark not only
ignores administration plans to raise TRICARE fees, it also proposes new
benefits -- 180-days of TRICARE Standard and TRICARE dental coverage to
members of the drilling reserve who are involuntarily separated during
the force drawdown now underway.
It also expresses "the sense of
Congress"that military members and their families make
extraordinary sacrifices over their careers, which should be viewed as
a "significant pre-paid premium for their health
care"in retirement. This, of course, would serve as a caution
against any straight-line comparison of military benefits to what
civilian workers receive.
Graham, however, was blunt in arguing
that retirees must be required to pay higher fees to make their TRICARE
benefit "sustainable"and to ensure that
weapon modernization and force structure aren’t cut more
deeply than planned to satisfy reduced targets that Congress agreed to
"TRICARE premiums have to be adjusted,"Graham
said. "There have been no meaningful premium adjustments since
1995. And when the [TRICARE] program was first introduced, beneficiaries
were providing 24 percent of the cost. Now they are down to 10.
Graham doesn’t endorse
every feature for controlling personnel costs proposed in the
administration’s budget request. For example, he opposes
capping active duty pay raises, starting in 2005. He also
won’t back tying future TRICARE fee hikes to medical
inflation, although he agrees with defense officials that increases tied
to retiree cost-of-living adjustments, which Congress voted for last
year, isn’t adequate either.
"Somewhere between a COLA-adjustment increase and medical
inflation is where we need to be,"Graham
He does supports higher pharmacy
co-pays to encourage more cost-efficient choices on filling
prescriptions, and favors a tiered system of TRICARE fees "based on
your income and retired rank, sort of a means test."
Graham knows some military associations
oppose a tiered approach. But as an Air Force Reserve lawyer who will be
eligible for TRICARE when he reaches age 60, Graham said tiered fees
simply would be fairer.
"When I get my retirement and am TRICARE-eligible, clearly
based on my income level I can afford a different premium versus someone
who is retired as an E-7 or E-8,"Graham
Graham was asked if he was sympathetic
to the view that imposing an annual enrollment fee on elderly
beneficiaries using TRICARE for Life would break faith with a generation
promised free lifetime military health care.
don’t believe anybody was promised free lifetime medical
care. That’s a popular myth,"Graham said.
think we have an obligation to the retired force to be generous and to
be compassionate to help recruiting and retention. But, you know, there
was never any contract with anybody that, for the rest of your life, you
will get free medical care. That’s not part of
the deal and was never part of the deal."
Retirees do have a valid argument that
the health system should become more efficient before TRICARE fees are
raised sharply, he said. But that shouldn’t be an
excuse to delay reasonable fee increases now.
Congress got honest with the American people, Graham said, including
military retirees, Medicare beneficiaries and Social Security
recipients. All of them, he said, "are going to have
to accept change to get us out of this big [debt] hole that
With 2012 being an election year,
Graham doesn’t predict passage of major TRICARE fee
increases. But allowing retirees to continue to pay only 10 percent
toward health costs "is just not sustainable,"he
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