MILITARY RETIREES’ HEALTH CARE PROGRAM

CONCERN:

• Defense Secretary Donald Rumsfeld and Defense Undersecretary for Personnel and Readiness Dr. David S. C. Chu, with the blessing of the Bush Administration and in unison with an assortment of elected officials, news media, and tag-alongs, have accused military retirees and veterans of consuming much of the defense budget that should go to active duty and reserve programs. Particularly targeted are the funds giving military retirees increased access to the defense’s health care system. An April 14, 2005, New York Times article picked up on Chu’s allegations and has caused concern in Congress and with the public.

FACT:

• Critics charge that the cost of DOD’s main military health care plan, Tricare, has doubled since 2001 "and will soon reach $50 billion a year." The new plan for retirees over 65 years of age participating in Medicare Part B, Tricare for Life, "will cost at least $100 billion" or $150 billion thru 2015. (Not surprising. Civilian health care costs in U.S. are increasing at five times the inflation rate.)

• The Times article states that Tricare has nearly nine million beneficiaries who pay a fee no more than $450 annually and Tricare for Life (TFL), which supplements Medicare, "is free." Of the nine million beneficiaries accessing Tricare, many are active duty, activated reservists, and their families. Tricare for Life is not free. To access the program, elderly retirees and their beneficiaries must pay fees for participating in Medicare Part B, which is more than $900 annually.

• The FY 2001 Defense Act established a fund to be administered by the Treasury Secretary. DOD is required to fund health care costs for today’s war fighters who retired during or after 2003. Other than 2003, the Treasury and not DOD is to bear costs of TFL for pre-2003 retirees and eligible family members. Contrary to the law, however, FRA understands OMB is requiring DOD to carry part of the pre-2003 retiree health care cost in its Defense Health Care budget, not its war fighting budget.

• Recent testimony by Undersecretary Chu and Dr. Winkenwerder, DOD’s top health advisor, on April 21, 2005, attributed Defense health care increases to "benefit changes for our beneficiaries, to include the Reserve Components, increased health care costs in the private sector, and the decision of … mainly our retirees to drop private insurance coverage and rely on Tricare." ) TFL beneficiaries have no need for private health insurance. The law requires them to enroll in Medicare Part B in order to be eligible.

• Military retirees have earned access to the Tricare programs through service to the Nation while on duty in the Armed Forces, including twenty years or more of facing arduous and dangerous duty (that few American citizens wish to undertake), many years at poverty wages, a loss of many civil rights available to U.S. citizens not in uniform, performing menial tasks ordinarily refused when not in uniform, and putting one’s life on the line to protect the freedom guaranteed by the Constitution. In return for twenty years or more in uniform came a promise by the military in its recruiting pamphlets that ones sacrifices, physically and financially, would on retiring earn free health care for a lifetime for service members and their families.

• The accusation that the taxpayer is carrying the brunt of the cost of the military retiree’s health program is erroneous since these same retirees are required to pay taxes on their retired pay.

• Military retirees, many of them disabled as a result of wounds suffered in the line of duty, have fulfilled their commitment to the Nation. They only expect the Federal government to do likewise.

Fleet Reserve Association May 2005