Fee, Fie, Fumble

DoD’s civilian and military leaders urge Hill support for retiree health fee hikes and get mixed reactions at February hearings before the House and Senate Armed Services committees.

In February, several Capitol Hill hearings publicly kicked off the Defense Department’s campaign to significantly raise health fees for retirees under age 65. Secretary of Defense Donald Rumsfeld; Chairman of the Joint Chiefs of Staff Gen. Peter Pace, USMC; and Army Chief of Staff Gen. Peter Schoomaker testified in three hearings before the House and Senate Armed Services committees as well as the House Appropriations Subcommittee on Defense. Senior enlisted and civilian DoD leadership also testified at separate hearings.

DoD’s proposed imposition of large health care fee increases on retirees under 65 — and a 67 percent increase in retail pharmacy copayments for all beneficiaries — touched off serious debate.

Rumsfeld told committee members that current military health care spending is unsustainable, having nearly doubled over the past five years. Pace devoted much of his testimony to outlining the need to raise health fees significantly for retirees under age 65. Although he didn’t specify the details of the plan in his testimony, MOAA and other military associations were provided the specifics in a separate briefing by DoD health care officials Feb. 6. Unfortunately, the plan would require an even steeper increase schedule than those we received in earlier informal reports.

Their testimony drew varying responses from the Senate and House Military Personnel subcommittee chairmen. Sen. Lindsey Graham (R-S.C.) applauded the witnesses for thinking “out of the box” and appeared to support the initiative while Rep. John McHugh (R-N.Y.) and others on the House side criticized the appropriateness of fee increases and questioned DoD’s savings calculations. McHugh also had questions about the morality of achieving budget savings by driving people away from the health benefits they earned through a career of service.

MOAA President Vice Adm. Norb Ryan Jr., USN-Ret., spoke with Graham later and came away with the impression that Graham thinks some changes need to be made, but not necessarily the specific plan DoD proposed. (At press time, Ryan and several other association leaders were scheduled to attend a late-February “health fee summit” with Graham and senior defense officials to exchange views on this key issue.)

The same leaders testified before the House Appropriations Subcommittee on Defense a week later.
 

Hill Staffers Question Fee Hike Plan

Democratic and Republican staff members pledge a careful analysis of DoD proposal.

During a TRICARE conference discussion forum on Jan. 30, Republican and Democratic staff members from the House and Senate Armed Services committees told TRICARE officials they shouldn’t expect Congress to just roll over and accept the Defense Department’s plan to impose significantly higher TRICARE fees on military retirees.

While they agreed that rising costs are a concern, several made it clear that many on the Hill don’t share the Pentagon’s view that the answer is to stick retirees with bigger bills.

Senate staffers questioned the Pentagon analysis and expressed doubt whether private-sector solutions (such as higher cost shares) are the answer for the military situation. They also said the Pentagon hasn’t won any points by failing to brief the committee about the plan and the rationale behind it and that Congress already is receiving thousands of letters from upset retirees. The general agreement among all the staffers on the panel was that military retirees are different from civilians because they earn their benefits through a career of arduous sacrifice, including wartime service.

House and Senate staffers also agreed more must be done to ensure enough providers participate in TRICARE, both Standard and Prime, to meet beneficiary needs.

Targeted Pay Raise Planned

For some, increases would be limited to the average American’s for the first time.

The administration’s FY 2007 Defense budget includes a proposed 2.2 percent, across-the-board pay raise for military personnel. Prominent Senate Democrats expressed dissatisfaction with the administration’s proposal by urging the Budget Committee leadership to “include a pay increase that meets the needs and reflects the sacrifice of America’s military personnel and their families.”

The senators also added, “Such a paltry increase neglects the value of their service and the very real challenges of recruiting and retaining an all-volunteer military in time of war.”

Since 1999, after almost two decades of pay-raise caps had generated a cumulative 13.5 percent “pay gap” with private-sector pay, the law has required military pay raises larger than private-sector pay growth every year. But that special authority expired this year, with a 4.5 percent gap still remaining. Starting in 2007, the law says the normal military raise will be the same as the percentage growth in private-sector pay, as measured by the Bureau of Labor Statistics’ Employment Cost Index.

For 2007, that number is 2.2 percent, which would be the lowest military raise since 1994. However, defense officials also are developing a set of mid-year “targeted” pay raises for selected members — likely mid-career and senior enlisted members and warrant officers.

The mid-year targeted raises would shave another .5 percentage point off the current 4.5 percent pay gap.

DoD says the targeted raises will be enough to establish a new and better pay comparability standard — the 75th percentile of earnings of civilians of comparable age and education.

MOAA Testifies For VA Fixes

Goals include full funding, seamless transition, no fees.

MOAA and several other military and veterans’ organizations testified before the House Veterans’ Affairs Committee in mid-February. MOAA Deputy Director for Government Relations Col. Bob Norton, USA-Ret., recommended:

■  fully funding the VA health care system for all enrolled veterans to meet the rising demand among Iraq and Afghanistan veterans, including more than a half million Guard and Reserve veterans now eligible for VA care;

■  opposing a proposed $250 user fee and increased drug copayments for certain nondisabled enrolled veterans. Norton recommended that Congress reject these fees, as it has for the past three years;

■  pressing the VA and DoD for timely implementation of a seamless transition between military and VA programs, including a jointly usable electronic medical record, a joint VA-DoD separation physical, and expanded transition assistance services for separating members;

■  increasing medical research and construction funding for VA polytrauma centers that treat severely wounded veterans;

■  restoring cuts in the VA claims processing system and improving training and technology support to reduce the huge claims backlog and improve decision quality; and

■  enacting a “total force Montgomery GI Bill” that matches education benefit rates to service performed by combining active duty and reserve GI bill programs under one law. (See related story, page 32.)

Norton also publicly thanked retiring Subcommittee Vice Chairman Mike Bilirakis (R-Fla.) for his many years of dedicated service and his leadership and tenacity in championing elimination of the unfair “disability tax” on earned military retired pay.

MOAA Briefs House Staffers

More than 80 attendees provide positive feedback on education effort.

Cmdr. John Class, USN-Ret., MOAA Deputy Director of Government Relations, conducted a special Capitol Hill briefing for U.S. representatives’ staffers Feb. 24 to provide MOAA’s perspective on DoD’s proposal to increase military retiree health care fees.

Staffers from 80 congressional offices attended. MOAA president Vice Adm. Norb Ryan Jr., USN-Ret., and the entire Government Relations staff also were on hand to answer questions.

“This is the major item on MOAA’s legislative agenda this year,” said Ryan. “With recruiting in trouble and retention at risk, the last thing we should be doing is cutting military retirement benefits by as much as $1,000 a year. Why give already overstressed mid-career service-members and families another reason to reconsider their military career decisions?”

The briefing outlined the specifics of the Pentagon plan to increase retiree health fees by 50 percent to 270 percent, depending on grade, and explained why MOAA believes this is the wrong approach. Class discussed:

■  why MOAA objects to the FY 2007 Defense budget plan to greatly increase health fees for military retirees under age 65,

■  problems with TRICARE that need to be addressed before any fees are increased, and

■  alternative ways the government can reduce military health care spending without penalizing beneficiaries.

Wanted: GI Bill for the 21st Century

Associations seek benefits proportionate to service and cost of education.

The Partnership for Veterans Education, a consortium of military, higher education, and veterans’ associations (including MOAA), is pushing Congress to modernize Montgomery GI Bill (MGIB) education benefits.

MGIB advocates have been frustrated for years that MGIB benefits haven’t kept up with the rising cost of education. Partnership participants say the program isn’t living up to its purposes as a recruiting and retention tool and veterans’ readjustment program.

While active duty, National Guard, and Reserve forces are operationally integrated under the Total Force policy, their educational benefits are not integrated, and those benefits are no longer proportional to members’ service. Tens of thousands of activated Guard and Reserve members haven’t been able to use the education benefits they earned for their contingency service. Further, Guard and Reserve members can’t use the benefit after fulfilling their commitment and leaving service.

Partnership members are seeking House and Senate sponsors for legislation to consolidate all active duty, Guard, and Reserve MGIB programs under VA jurisdiction and align benefits with the length and type of service performed.

Force Cuts Are Off-Base

Senior Defense leaders get chilly reaction to Pentagon’s force-cutting proposal.