Late Action

The Senate passes the Defense Authorization Act, setting up tough end-of-year negotiations with the House over SBP, concurrent receipt, and reserve health care.

On Nov. 15, the Senate finally passed its version of the FY 2006 Defense Authorization Bill (S. 1042) by a vote of 98 to 0. The House had passed its version of the bill (H.R. 1815) more than five months earlier.

• SBP. A Senate-approved initiative by Sen. Bill Nelson (D-Fla.) would accelerate the 2008 implementation date for 30-year paid-up Survivor Benefit Plan (SBP) coverage and end the deduction of VA survivor benefits from SBP annuities when the member’s death is caused by military service. Both provisions would take effect Oct. 1, 2005. The House bill was silent on SBP.
   
• Concurrent receipt. A Senate provision by Sen. Harry Reid (D-Nev.) would provide full, immediate concurrent receipt for disabled retirees rated “unemployable” by the VA, retroactive to Jan. 1, 2005. The House bill would make this effective Oct. 1, 2009 (versus the Oct. 1, 2013, implementation date in current law).
   
• Guard-Reserve health care. A Senate initiative (Sen. Lindsey Graham, R-S.C.) would authorize permanent, premium-based TRICARE coverage for nearly all drilling Guard and Reserve members (and their families) who agree to continue in Selected Reserve status. A similar initiative was approved by the House Armed Services Committee in May but was removed from the House bill on a budget technicality.
   
• Commissaries. The House bill would place a five-year moratorium on any further studies concerning privatization of commissary functions.
   
• Army manpower. The Senate bill proposes to increase the size of the Army by 20,000. The House bill proposes a 10,000 increase.
   
• Military death benefits. The Senate bill would increase the maximum military life insurance coverage to $400,000 and raise the death gratuity for all active duty deaths to $100,000, including all deaths since Oct. 7, 2001, the official start of the war on terrorism. The House bill provides the same insurance increase for future deaths but provides retroactive death gratuity and insurance increases only for combat-related deaths.

House-Senate negotiations on the defense bill normally take two or three months, but the Senate’s late start forced a compressed schedule to finish the bill before the end of the year.

At press time, House and Senate leaders hoped to finish action the week of Dec. 12, and MOAA had generated special electronic and telephone alerts, asking members to contact their legislators in support of the Senate SBP, concurrent receipt, and health care provisions.

More End-of-Year Legislation

VA fixes in; defense, health care remain at risk.

Despite the delay on the Defense Authorization bill, Congress did manage to complete action on two veterans’ bills in late November.

VA COLAs. The Veterans’ Compensation Cost-of-Living Adjustment (COLA) Act of 2005 authorized a 4.1 percent cost-of-living increase for those who collect disability and survivors’ benefits from the VA. Unlike military retired pay and survivor annuities, Congress must authorize annual VA COLA increases each year. The increase took effect Dec. 1, 2005, and will be reflected in Jan. 2, 2006, checks.
 
VA health funding. The FY 2006 Military Quality of Life and Veterans Affairs Appropriations Act provided an overall 4.8 percent increase in the VA budget, including an 8.1 percent funding increase for VA medical services. It also included an extra $1.2 billion to make up the FY 2005 VA health care budget shortfall that was discovered in June.

But other important bills remained snarled in end-of-year budget politics.

Defense budget. At press time, action was still pending on the FY 2006 Defense Appropriations Bill (which provides funding for programs authorized by the Defense Authorization Bill). House leaders were seeking to apply a 2 percent across-the-board budget cut to all federal programs — including the defense budget — to pay for hurricane recovery costs. MOAA had generated an alert opposing any cut to the defense budget in wartime as penny-wise and pound-foolish. The country needs a larger defense budget, not a smaller one.

Medicare/TRICARE payment rates. The Senate-passed budget reconciliation package included a provision reversing a planned 4.4 percent cut in Medicare and TRICARE payments to doctors for 2006, proposing a 1 percent increase instead. The House version of the bill envisioned allowing the cuts to take place. MOAA had generated an alert urging support for the Senate provision on the grounds that payment cuts would only discourage more doctors from seeing military patients.

VA Calls Off PTSD Dogs

Nicholson nixes review plan.

In a sudden late-November reversal, Secretary of Veterans Affairs James Nicholson canceled a planned review of 72,000 VA disability compensation awards for PTSD.

The VA announced the case review after the VA inspector general reported that some files contained insufficient documentation for the PTSD compensation award.

In reversing the decision, Nicholson said, “The problem appears to be administrative in nature, such as missing documents, and not fraud.” The secretary conceded that the documentation technicalities weren’t sufficient reason to put disabled veterans through multiple interrogations.

Recent studies such as one by the New England Journal of Medicine indicate that one out of six Iraq and Afghanistan veterans may have PTSD symptoms.

MOAA thinks the cancellation was the right decision. Pressing thousands of PTSD case “re-reviews” would have undeservingly stigmatized these combat veterans and deterred other sufferers from seeking help.

2006 Goals

Health care, Survivor Benefit Plan, and concurrent receipt fixes top MOAA’s legislative agenda.

As this issue went to press, many of MOAA’s 2005 goals remained unresolved pending final action on the FY 2006 National Defense Authorization Bill (see page 29).

We can still count several important legislative gains made in 2005. Some were passed in separate legislation, and some were included in both the House- and Senate-passed versions of the defense bill and were thus virtually assured of inclusion in the final law. Accomplishments included:

• a 3.1 percent pay raise for active duty, National Guard, and Reserve members;
• an increase in the maximum military death gratuity to $100,000 and maximum Servicemember’s Group Life Insurance (SGLI) to $400,000;
• creation of a traumatic injury insurance rider to SGLI, paying up to $100,000 for injuries sustained under operations-related conditions;
• authority to pay full housing allowances to Guard and Reserve members mobilized for more than 30 days;
• defeat of the administration’s proposal to impose enrollment fees for certain categories of VA health care enrollees; and
• a $1.5 billion increase in the VA medical budget and an added $35 million for the military health care budget.

The remainder of this column provides a summary of selected MOAA legislative objectives for 2006.

Health Care Issues

Health program funding

MOAA will seek full funding for the Defense Health Program (DHP), working with Congress and DoD to ensure both military readiness and beneficiary needs are met, regardless of age, status, or location. This includes supporting realistic budget assumptions and working to ensure Congress fully funds any unanticipated contingency or other requirements that otherwise would overtax existing programs and budgets.

Continue to defend and improve TRICARE benefits

MOAA will work to sustain and improve benefit consistency for all beneficiary groups, with the following objectives:

• oppose health care cost-shifting from the government to military beneficiaries. Recent rhetoric from defense leaders indicates an intent to propose significant cost increases (in terms of higher enrollment fees, deductibles, and copayments) on uniformed services beneficiaries in an effort to follow civilian health care trends. MOAA believes strongly that military health coverage is an essential offset to the unique conditions of a military career and that the country has a higher obligation to active duty, Guard, Reserve, and retired military members than corporate employers demonstrate for their employees. The government should spend as much time considering the extraordinary costs it has imposed on career members and families as it does counting every last nickel spent on their health care.
   
• increase health care access by reducing deterrents to provider participation, identify areas with TRICARE Standard access problems, work actively to attract more providers to participate in Standard, and assist beneficiaries who need help finding a TRICARE-participating provider.
   
• remain vigilant in protecting against reductions in Medicare/TRICARE reimbursement rates, so that beneficiaries’ providers are not deterred from accepting Medicare and TRICARE coverage.
   
• eliminate preauthorization and referral hassles and other inconveniences for TRICARE beneficiaries and providers.
   
  Military Apples, Civilian Oranges

   
  Shifting health costs to beneficiaries ignores that the government has a higher obligation to military people than civilian employers have to their employees. Unique health and retirement benefits are an essential offset to unique, arduous service conditions.
• eliminate the 115 percent billing limit when TRICARE Standard (CHAMPUS) is second payer to other health insurance. Currently, the 115 percent limit is often less than other insurers pay, so TRICARE pays nothing. Just as TFL is a true “second-payer” to Medicare, TRICARE should be a true second-payer to other insurance.
   
• reinstate TRICARE benefits for remarried widows when the second marriage ends. Recent legislation reinstated VA health benefits for survivors of veterans who died of service-connected causes whose subsequent remarriages end. Military survivors deserve the same consideration.
   
• codify requirements to continue Prime benefits in localities affected by base reduction and closure actions. Many beneficiaries select retirement homes in close proximity to military bases, to have access to military health care and other services. Base closures run significant risks of disrupting TRICARE Prime care that retirees depend on to meet their health care needs.
   
• provide a government subsidy for the TRICARE Retiree Dental Plan.
   
• extend the TRICARE Extended Care Health Option program (for severely disabled family members of active duty personnel) eligibility to three years for enrolled family members after the death of a ser‑ vicemember, to allow time for the family to transition to other support services.
   
• seek increased funding for mental health and family counseling for deployed families.
   
• work to see that Prime access standards are met and specialty care authorizations and referrals maintain a beneficiary-first orientation pending development of an effective electronic program.

Guard/Reserve health care

MOAA supports providing permanent coverage for all drilling Guard and Reserve members who continue in the Selected Reserve and is hopeful Congress will approve the Senate-proposed plan in the final FY 2006 defense bill. MOAA also will seek authority to give Guard and Reserve members the alternative of having the government pay a share of any employer-provided health coverage during periods of mobilization. This is essential to minimize disruption of existing employer-provided family health coverage during the member’s activation.

Pharmacy benefits

MOAA will encourage DoD and Congress to develop and maintain a comprehensive uniform pharmacy benefit for all beneficiaries, with a robust formulary that preserves beneficiary options to obtain specific pharmaceuticals deemed necessary by their providers. MOAA will strive to maximize beneficiary choice, minimize beneficiary costs, and help beneficiaries and providers understand and make the best use of the various TRICARE pharmacy options.

Pretax health premiums

MOAA will work to authorize pretax dollars, to include pretax payment of TRICARE Prime enrollment fees and premiums for TRICARE supplemental, long-term care, and TRICARE dental insurance. Pretax premium payment is a standard part of civilian benefits packages, and military beneficiaries should have the same option.

Medicare Part B payments

MOAA will seek legislation to exempt retired servicemembers who entered military service before Dec. 7, 1956 (the date the law was changed to specify that retiree care in military facilities would be only on a “space-available” basis), from paying Medicare Part B premiums. The government should keep promises accepted in good faith by servicemembers who joined before that date by providing cost-free access to TRICARE For Life without the necessity for paying these premiums.

VA-DoD issues

MOAA is concerned about the coordination of the transfer of disabled servicemembers and their families between the DoD and VA health care systems. Both departments must do more to speed the development of compatible medical records, a “one-stop” separation physical, and VA benefits determinations before discharge. “Seamless transition” efforts also must address services unique to the needs of Guard and Reserve veterans and their families. Families who provide direct services to severely disabled veterans should have the appropriate resources during the post-separation period.

Authorize FEHBP option

MOAA will seek legislation authorizing retired servicemembers and their families the option to elect coverage under the Federal Employees Health Benefits Program (FEHBP). Beneficiaries whose ability to use their military health coverage is frustrated because they cannot find a TRICARE-participating provider should have the opportunity to participate in FEHBP on the same basis as federal civilian employees.

Retired Pay and Survivor Issues

Eliminate SBP-DIC offset

MOAA endorses Senate-passed legislation to repeal the dollar-for-dollar reduction in SBP benefits for any amount of Dependency and Indemnity Compensation (DIC) paid by the VA to survivors of members who died of service-connected causes. When the member’s death is caused by service, the survivor should receive DIC as an added indemnity payment, without reducing SBP benefits the retiree purchased. Most active duty deaths occur among relatively junior servicemembers, whose survivors are eligible for only modest SBP payments. Because these payments usually are lower than the DIC amount, most survivors of members killed on active duty lose most or all of their SBP benefit entirely. Under current law, recent survivors have a financial incentive to assign the SBP annuity to their children, if any — at the cost of losing SBP eligibility entirely once the children reach the age of majority. TMC believes survivors who already have paid such an extreme price should not have to forfeit or assign away their SBP to qualify for DIC payments that amount to only about $1,000 per month.

Paid-up SBP equity

The current 2008 effective date for 30-year paid-up SBP coverage should be moved up to Oct. 1, 2005, as proposed by the Senate. Those who enrolled when SBP was first signed into law will have to pay premiums for up to 36 years before being granted relief, whereas later enrollees will have a 30-year cutoff. The effective date must be changed to provide equity for the participants who have paid the greatest amount of premiums for SBP.

Concurrent receipt

MOAA is committed to winning full concurrent receipt of military retired pay and VA disability compensation. The FY 2005 Defense Authorization Act provided immediate concurrent receipt for retirees rated 100 percent disabled, rather than making them wait 10 years to get their full retired pay back, as under previous law. MOAA supports Senate-passed legislation to include those retirees paid at the 100 percent disability rate due to being rated “unemployable” by the VA. For the longer term, MOAA seeks expanded and accelerated restoration of earned retired pay for all disabled retirees.

MOAA particularly supports concurrent receipt eligibility for medical (Chapter 61) retirees who were prevented from serving 20 years solely because they became severely disabled in service. Members whose careers were cut short by combat and operational injuries in Iraq, Afghanistan, and earlier conflicts deserve treatment equal to those who happened to incur their wounds after completing 20 years of service.

MOAA will closely monitor the Veterans’ Disability Benefits Commission’s ongoing study of the VA disability system and take all possible steps to ensure a fair and unbiased process that protects the interests of disabled veterans.

COLA commitments

MOAA will work to ensure continued fulfillment of congressional intent concerning retired pay COLAs, including protecting against COLA caps proposed as part of some Social Security reform efforts. We will exert every effort to preserve the Congress’ stated intent “to provide every military retired member the same purchasing power of the retired pay to which he was entitled at the time of retirement [and ensure it is] not, at any time in the future ... eroded by subsequent increases in consumer prices.”

Disability tax refund

MOAA supports repeal of the three-year statute of limitations on filing amended federal income tax returns to recover taxes improperly levied because of VA delays in disability claim processing. The VA sometimes takes many years to reach a final disability ruling, and affected members must file amended tax returns to recover income taxes on retired pay that should have been deemed tax-free disability compensation. Current law precludes filing amended returns for more than three tax years, which causes thousands of disabled retirees to be taxed unfairly simply because of VA claims-processing errors or delays.

USFSPA equity

MOAA will strive to reform the unfair provisions of the Uniformed Services Former Spouse Protection Act (USFSPA). Eligibility for award of lifetime retired pay should be the same for former spouses as for servicemembers — 20 years of marriage during military service, with annual payments limited to the number of years of marriage during military service for former spouses who don’t attain that standard. Divisible retired pay should be based on the member’s grade and years of service at the time of the divorce rather than at the time of the member’s retirement from service. State courts should be barred from requiring payments to start before the member retires from active duty and barred from dividing VA disability compensation, which is the exclusive property of the servicemember. MOAA continues to seek congressional sponsors and hearings for USFSPA reform.

DIC continuation

MOAA will seek authority to lower the age at which survivors in receipt of Dependency and Indemnity Compensation (DIC) retain this benefit upon remarriage. Legislation passed in 2003 authorized retention of DIC for those who remarry at 57 or older. Continuation of benefits on remarriage at age 55 is authorized for all other federal survivor programs, including the Survivor Benefit Plan. MOAA believes that widows receiving DIC deserve equal treatment.

WEP and GPO

MOAA will work to repeal or reform the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) Social Security penalties for federal civilian retirees and spouses who retired under the Civil Service Retirement System (CSRS) and certain state retirement systems. WEP reduces Social Security benefits earned by these members and spouses from military service or other employment. GPO reduces or eliminates the Social Security survivor annuity when the surviving spouse retires under one of the programs above.

Budget vigilance

MOAA will monitor action on Budget Resolution, Omnibus Budget Reconciliation, Social Security reform initiatives, and other proposals to guard against discriminatory treatment of members of the uniformed services community and their families.

Benefits protection

MOAA will protect against any attempts to degrade retiree and survivor benefits, including military commissaries, exchange facilities, family support services, and Morale, Welfare and Recreation activities, particularly with regard to impacts from BRAC and other re-basing/redeployment initiatives.

Active and Reserve Force Issues

Military manpower

MOAA will fight to improve alignment of service force levels with missions to ease deployment rates and improve quality of life, retention, and readiness. For years, military forces have been overstressed as manpower levels have been capped below mission requirements. Current severe operating tempos will have adverse consequences on military family life and personnel retention unless relieved very soon. Congress has approved an end-strength increase for the Army for FY 2006, but it is highly uncertain whether this will suffice to ease current strains. MOAA believes additional strength increases and more resources for recruiting, retention, training, and family support are needed.

Guard/Reserve compensation

Reserve pay and retirement systems were developed more than a half century ago, when these forces were truly held in reserve. This is no longer true.

MOAA supports updating Guard and Reserve compensation and retirement to better reflect the increased sacrifices imposed on these members, including changing the Guard and Reserve retirement age from 60 to 55, authorizing federal benefits for extended Guard “homeland security duty” performed at the request of the president, and providing tax incentives for employers of Guard and Reserve members.

Financial, legal, and reemployment protections available to activated Guard and Reserve servicemembers under the Uniformed Services Employment and Reemployment Rights Act and the Servicemembers’ Civil Relief Act must be further strengthened in recognition of the increased activation tempo of the Guard and Reserve forces.

Pay-raise comparability

MOAA wants to accelerate recent progress toward restoring military pay comparability with the private sector. For most of the past two decades, Congress capped military pay raises below those of the private sector. As a result, the pay gap grew as large as 13.5 percent, accompanied by a retention and readiness crisis. Subsequently, executive and legislative branch leaders have worked to improve military pay, but a 4.4 percent gap still remains as of January 2006. MOAA lauds the executive and legislative branches for their substantial progress in this important area, but the remaining pay gap must be erased.

Family support funding

MOAA will seek additional funds for Guard and Reserve family support centers assisting families of mobilized personnel, especially those who don’t reside near military installations. MOAA also seeks to authorize more programs to assist all military families coping with stresses associated with frequent and protracted family separations.

Premium conversion/flexible spending account

MOAA will continue to pursue DoD implementation of premium conversion and flexible spending accounts for active duty and Selected Reserve members. These initiatives will allow members to pay out-of-pocket health and dependent care expenses and government health and dental insurance premiums on a pretax basis — as is already authorized for all civilian employees.

Travel card billing

MOAA will fight to fix the billing system for official travel credit cards that now holds individual servicemembers responsible for paying these bills, even when the finance center fails to make timely payments or the member is deployed on contingency operations. The current system makes members pay interest penalties and incur credit damage because of circumstances imposed by the government. Expense account bills in the private sector go to the employer, not the employee. Travel card bills should go to the member’s unit or to the finance center, and the member should be held harmless for any late payments.

PCS reimbursements

MOAA will continue pursuing adjustment of permanent change-of-station (PCS) reimbursements to offset expenses servicemembers incur in conjunction with government-ordered relocations. The FY 2002 Defense Authorization Act provided the first update to some of these allowances since 1986, including increases in en route per diem and the maximum daily temporary lodging expense allowance.

But that was four years ago, and PCS reimbursements still fall far short of the average cost of military moves. More should be done to restore the principle that it’s the government’s responsibility, not the servicemember’s, to pay the cost of military-directed moves.

GI Bill benefits

MOAA supports legislation to establish a “21st century Montgomery GI Bill (MGIB)” for active and reserve forces. Basic benefits should be benchmarked to the average cost of attending a four-year public college. Senior career servicemembers who entered service between 1977 and 1984 but declined to enroll in the VEAP educational benefits program of that era should be offered a one-time opportunity to enroll in the MGIB. There is a particular need to increase Reserve GI Bill benefits, which now provide only 28 percent of basic benefits — versus the benchmark of 47 percent set in 1984 when the MGIB was first authorized. Increased MGIB benefits in exchange for active duty service (“college for combat”) will help, but it is essential to restore and then sustain Reserve MGIB program proportionality with active duty benefits. MOAA also supports allowing transferability of MGIB benefits to family members as a career retention incentive for members who commit to serve a full career. A needed step toward addressing these issues is integrating all active and reserve MGIB programs and scaling educational benefits according to service performed.

Commissary benefits

MOAA will fight to protect against privatization efforts or reductions in commissary funding support to ensure retention of this important benefit for all service beneficiaries, including active, reserve, and retired members, families, and survivors. MOAA will resist consolidation of commissary and exchange facilities (which has the secondary effect of increasing prices on some commissary items) except as necessary to avoid loss of commissary facilities at base realignment and closure locations.

Inactive duty training (IDT) points

MOAA will work to remove the current cap that bars Selected Reserve personnel from crediting more than 90 inactive duty training points per year toward retirement, even if they actually earned additional points above the cap. All IDT points earned in a 12-month period should be credited for retirement purposes.

Education enhancements

MOAA seeks legislative and policy changes to provide education enhancements for servicemembers and families, protect DoD dependent schools, sustain Impact Aid funding for public schools attended by military children, promote reciprocity for graduation and transfer of credit requirements for military children, enhance spousal education/employment initiatives, and promote in-state college tuition eligibility in the state of military assignment.

Additional Issues

Veterans’ VA claims

Veterans of the war on terrorism understandably are adding to the backlog of VA disability claims. But other underlying problems are causing the VA claims system to again spiral out of control. These include inadequate resources, inconsistencies between VA networks, and earlier botched claims. Backlogged claims are over 350,000 at any one time, and appealed claims take as long as three years to adjudicate. MOAA supports a major infusion of resources and improvements in training, quality control, and information management to put the VA claims system on firm footing during a time of war.

Flag amendment

MOAA supports passage of a constitutional amendment allowing Congress to prohibit the physical desecration of the flag of the United States. MOAA believes strongly that Congress should pass this amendment, so it can be referred to the states, where the people can decide the issue (requires ratification by at least 38 states).

Social Security and Medicare reform

MOAA will resist initiatives that impose disproportionate penalties on particular segments of the beneficiary or taxpayer population or that fail to protect long-lived beneficiaries’ income from the ravages of inflation.

— Contributors are Col. Steve Strobridge, usaf-Ret., direc­tor; Col. Mike Hayden, USAF-Ret.; Col. Lee Lange, USMC-Ret.; Col. Bob Norton, USA-Ret.; Col. Jim Young, USAF-Ret.; Cmdr. René Campos, USN-Ret.; Cmdr. John Class, USN-Ret.; Cynthia Thompson; and Cass Vreeland, MOAA’s Government Relations Department.