TRICARE hikes are not ‘keeping faith,’ coalition rep says

March 22, 2012

by Tom Philpott

A House subcommittee expected to vote soon on whether to recommend raising retiree TRICARE fees sharply over the next five years heard some compelling testimony against the move Wednesday.

Retired Air Force Col. Steve Strobridge, co-chair of The Military Coalition, a consortium of 34 military associations and veterans groups, traded debate points with Dr. Jonathan Woodson, assistant secretary of defense for health affairs, before the armed services panel on personnel.

Strobridge attacked the Obama administration’s premise that raising TRICARE fees on military retirees to help balance defense spending cuts in the current budget crisis does not break faith with the force.

"If keeping faith means no changes for today’s troops on retirement, than it’s breaking faith to raise their [health] fees by [up to] $2000. That’s no different from a $2000 retired pay cut,"he said.

"They say military retirees pay far less for health care than civilians do,"Strobridge added. "Whenever somebody gives me that argument I ask: If the military deal was so great, are you willing to pay what they did to earn it? Would you sign up to spend the next 20 to 30 years being deployed to Iraq, Afghanistan or any other garden spot the government want to send you to,"he asked. "Military people pay far steeper premiums for health coverage than any civilian ever has or ever will."

Woodson warned that if Congress blocks the TRICARE fee hikes, which would save almost $13 billion over five years, then active duty strength would have to be cut by 30,000 to 50,000 more troops than already planned.

The surgeons general of the Army, Navy and Air Force also testified but were not drawn into the TRICARE fee debate.

The armed services committees have been preoccupied for weeks over how to accommodate last year’s bipartisan deal to cut defense spending by $487 billion over the next decade. The administration’s plan to hit that target includes TRICARE fee hikes for every category of retiree except those retired because of disability. The plan also includes raising TRICARE pharmacy co-pays sharply at retail outlets, and more modestly for mail order. Higher pharmacy co-pays would impact active duty families too.

Congress also is worried about a "sequestration"order included in that same law, the Budget Control Act. If not blocked or replaced by a new deficit reduction plan by Dec. 31, sequestration would require arbitrary defense program cuts totaling another $500 billion over 10 years.

This atmosphere of fiscal doom might be to blame for House and Senate defenders of military retirees making only half-hearted or strangely ill-informed arguments lately against planned TRICARE fee increases.

Freshmen Republicans, for example, routinely ask why the administration isn’t proposing similar health fee increases for federal civilians –ignoring the fact that federal civilians pay hefty monthly premiums already, and those payments are raised annually as health care costs rise. Woodson made that same argument again at this hearing.

Rep. Joe Wilson (R-S.C.), chairman of the House personnel subcommittee, called the TRICARE fee plan "wrong-headed"and designed to encourage retirees not to use their benefit. Woodson assured him the goal is to save defense dollars, not "drive people away from their TRICARE benefit."

Strobridge, director of government relations for Military Officers Association of America, was the lone witness on behalf of The Military Coalition and against the fee increases. Facing a budget squeeze, he said, Defense officials decided it was easier to save money by raising fees rather than implement recommendations of studies to consolidate health budgets.

"They blame the budget crunch but balk at changes to make the sy stem significantly more efficient [addressing] DoD’s fragmented health care systems. But the recent review made only minimal changes, in part because a key decision criterion was how hard the change would be. So the first choice was to make retirees pay more because it was easier,"he said.

He dismissed Woodson’s argument that combining medical command headquarters would target only two percent of total health spending.

"The issue on reorganization isn’t the headquarters,"Strobridge replied. "The issue is consolidation of responsibilities and accountability for the budget, which we don’t have right now."

For example, Strobridge said, when a base wants to save money, it can reduce the number of medicines available on base, which means more beneficiaries go off base to get prescriptions filled. It drives down base costs but drives up overall health costs for DoD. It’s those kinds of inefficiencies that you have to eliminate,"he said.

Woodson said that with fees, co-pays and deductibles set for retirees in 1996, they paid 27 percent of total health costs as the TRICARE triple insurance option took effect. With no fee increases since then, until last October, the beneficiary cost share fell to 10 percent. The planned fee increases would raise average out-of pocket costs to 14 percent. That still would be only half what it was in 1996, Woodson said.

He also defended the plan to "tier"TRICARE enrollment fees so retirees with more income also pay more out of pocket. Military leaders, including enlisted leaders, pushed hard for that feature, Woodson said, to protect lower-income retirees. Strobridge called it discriminatory.

"No other federal retiree has service-earned health benefits means tested, and it’s rare in the civilian world. Under that perverse system, the longer and more successfully you serve, the less benefit you earn,"he said.

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