4-12-13

FY 2014 Budget Includes TRICARE Fee Increases, Reduced COLAs

The Administration released its proposed FY 2014 budget this week, which includes a variety of proposals that threaten future benefits for military personnel and retirees.  The budget proposal includes a complex plan to increase existing TRICARE Prime enrollment fees, implement new fees for TRICARE Standard and future TRICARE-for-Life beneficiaries, and phase-in higher pharmacy co-pays over four years. Active duty personnel, survivors of active duty members who died on active duty, medically retired, and current TRICARE-for-Life beneficiaries are excluded from the proposed health care fee increases. (See Tom Philpott’s Military Update column (4-11-2013) for more details.)

The budget seeks to reduce the percentage increase for active duty pay for FY 2014 and beyond. The plan includes a one-percent increase for 2014 (versus the 1.8 percent increase necessary to keep pace with civilian pay scales) and reduced funding for bonuses and special pays. A one-time round of military base realignments and closures (BRAC) is also proposed.

Department of Veterans Affairs (VA) FY 2014 funding is increased by 10 percent, plus an additional $1.1 billion (1.9 percent) above FY 2014 levels for advanced appropriations for medical care in FY 2015. Funding the VA’s transition to a paperless claims system in all 56 regional offices is a top budget priority.

Funding for the U.S. Coast Guard shrinks in the Administration’s budget plan.  Coast Guard appropriations would be reduced from $11.03 billion in FY 2013 to $9.79 billion in FY 2014. 

The budget also proposes using the chained Consumer Price Index (CPI) to calculate future Cost-of-Living-Adjustments (COLA) for military retirees, veterans and Social Security recipients. The chained CPI would be used in lieu of the current CPI and would generally reduce COLA increases by 0.2 to 0.3 percent. FRA is committed to ensuring equitable COLAs for all military and veteran beneficiaries and is reviewing other issues addressed in the budget proposal.