Senate Punts

The Senate majority leader cuts off action on defense bill and delays action until September to “pursue other priorities” before Congress’ month-long August recess.

As this issue went to press, MOAA and others were frustrated that Senate Majority Leader Bill Frist (R-Tenn.) had pulled the FY 2006 National Defense Authorization Act (S. 1042) from further Senate consideration until after Labor Day. Unfortunately, that will mean longer delays in reaching resolution of all kinds of issues from active duty staffing levels to survivor benefit fixes and relief for disabled retirees.

This forced wait is particularly nettlesome because Senate leaders already had delayed action on the bill for a full two months since the House passed its version (H.R. 1815) on May 25. Anticipating floor fights over several contentious amendments, Senate leaders had put it off until just before the month-long August recess — finally allowing it to come to the Senate floor in late July. This is a common tactic in the Senate — hoping most senators will be anxious enough to go home that they’ll agree to limit amendments.

But the bill quickly drew nearly 300 proposed amendments. Additional controversy arose as a number of prominent senators — including Sens. John McCain (R-Ariz.), Lindsey Graham (R-S.C.), and Carl Levin (D-Mich.) — proposed various ways to ensure proper treatment of prisoners. After a relatively short period of debate (by historical defense bill standards), a frustrated Frist forced a cloture vote that, if successful, would have closed off debate and barred consideration of many of the amendments on the table.

When that vote failed, Frist insisted on pulling the defense bill from further consideration. Resisting pleas from Minority Leader Harry Reid (D-Nev.) and others to continue action on the defense bill and finish it before the August recess, Frist said he had other legislative priorities for that time and that the defense bill would have to wait until September.

MOAA is hard-pressed to understand how, when the country is at war, there can be much on the Senate’s plate that’s more important than prompt action on the defense bill. After the Senate passes the defense authorization bill in September, House and Senate leaders will appoint a conference committee to work out the differences. This process typically takes two months or more, so it likely will be November or December before we get a final bill.

Senate OKs Reserve TRICARE

Some key amendments adopted before debate cutoff, others await action.

Before the defense bill was pulled from further consideration, the Senate approved several significant amendments, including one of MOAA’s key priorities — authorizing permanent health care coverage for nearly all members of the Selected Reserve.

Amendments the Senate agreed to incorporate in its version of the FY 2006 National Defense Authorization Act include:

• Reserve TRICARE. Sen. Lindsey Graham’s (R-S.C.) amendment would extend permanent, premium-based TRICARE coverage to members of the Selected Reserve. Under current law, only those mobilized since Sept. 11, 2001, are covered, and that coverage is only temporary. Graham’s amendment would cover all drilling Guard and Reserve members except those who are federal employees and already eligible for federal health insurance. As long as eligible servicemembers continue to serve in the Selected Reserve and pay premiums during periods not on active duty, they and their families would remain eligible for TRICARE coverage on a year-round basis.
   
• Death gratuity. Sen. Carl Levin’s (D-Mich.) amendment would increase the military death gratuity to $100,000 for survivors of all military members who die in the line of duty, retroactive to Oct. 7, 2001. Legislation passed earlier this year increased the death gratuity from $12,420 to $100,000 but only for combat- or operations-related active duty deaths between Oct. 7, 2001 (the official start of the war on terrorism), and Oct. 1, 2005. Levin’s initiative would make the increase permanent and apply it to nearly all active duty deaths that didn’t involve misconduct.
  
  But a long list of amendments of interest to the military and veterans’ communities still remains to be considered when the Senate returns, including:
   
• SBP equity fixes. Sen. Bill Nelson’s (D-Fla.) amendment would allow retirees who have reached age 70 and paid Survivor Benefit Plan (SBP) premiums since 1975 or earlier to stop paying premiums as of this fall and end deduction of VA survivor annuities from SBP benefits for widows of members who died of service-connected causes.
   
• Concurrent receipt. Sen. Harry Reid’s (D-Nev.) amendment would provide full, immediate concurrent receipt to qualifying retirees rated “unemployable” by the VA.
   
• Child care/family assistance. Sens. Patty Murray (D-Wash.) and Mark Dayton (D-Minn.) are seeking separate amendments that would provide added funding for child care, dependent education support, and family assistance centers.
   
• Reserve retirement. Sen. Jon Corzine’s (D-N.J.) amendment would reduce the minimum Guard and Reserve retirement age to 55 versus 60. Sens. Saxby Chambliss (R-Ga.) and Chuck Hagel (R-Neb.) have offered separate amendments that would authorize phased reductions in the retirement age depending on the amount of time mobilized to active duty since the start of the war on terrorism. Sen. Hillary Clinton’s (D-N.Y.) amendment would authorize retirement credit for Guard members mobilized in state status (to guard airports) after Sept. 11.
   
• Reserve compensation. Sen. Patrick Leahy’s (D-Vt.) amendment would authorize a full housing allowance for Guard and Reserve members activated for more than 30 days versus 140 days currently. Sens. John Kerry (D-Mass.) and Richard Durbin (D-Ill.) have offered amendments aimed at encouraging continued civilian employer payment of salary differentials for mobilized members who suffer pay reductions.
   
• VA health care. Sen. Debbie Stabenow’s (D-Mich.) amendment would require mandatory veterans’ health care funding.
   
• Military health care. Sen. Lindsey Graham’s amendment would require DoD recommendations on flexible health spending accounts for retirees under 65, incentives for retirees to keep civilian insurance, means of improving health and pharmacy system efficiency, and more.

COLA Watch

The 2006 COLA likely will be in the 3 percent range.

The Bureau of Labor Statistics announced the monthly increase in the CPI, which is the metric used to calculate the annual COLA for military retired pay, VA disability compensation, survivor annuities, and Social Security.

After smaller increases in the CPI during the winter, inflation has continued to increase slowly so far this year. The June CPI is 0.1 percent above the May tally and 2.7 percent above last year’s COLA baseline.

If inflation were to continue at the June rate, the 2006 COLA would end up at 2.9 percent or 3.0 percent. (See the chart below.)

Viagra, Cialis Copayments to Increase

Pentagon review continues shifting selected drugs to “non-formulary” status.

On July 14th, Dr. William Winkenwerder, assistant secretary of fefense (Health Affairs), approved the DoD Pharmacy and Therapeutics Committee’s recommendations to move both Viagra and Cialis, medications for erectile dysfunction (ED), to “non-formulary” status, leaving Levitra as the sole ED medication with a $9 copayment.

Viagra and Cialis still will be available through TRICARE, but the copayment for these drugs will be raised to $22, effective Oct. 19. Beneficiaries currently taking these drugs would need to switch to the one remaining ED drug in the formulary, Levitra, in order to continue paying the $9 copayment. Winkenwerder approved the change over objections from DoD Beneficiary Advisory Panel (BAP) members.

MOAA’s Cmdr. John Class, USN-Ret., and several other beneficiary panel members opposed the switch, which effectively puts two-thirds of the drugs in this class (representing 96 percent of ED prescriptions) in non-formulary status.

Winkenwerder also approved moving several less-frequently prescribed topical antifungal drugs to the third tier ($22 copayments) as of Aug. 17: Ertaczo, Exelderm, Loprox, Oxistat, and Spectazole. Seven other drugs in this class (Lamisil, Lotrimin, Mentax, Monistat Derm, Naftin, Nizoral, and Nystatin) will remain on the formulary, giving patients and providers multiple choices at lower copayments.

If questions or concerns arise regarding these or any other medications, contact the TRRx customer service line, (866) DoD-TRRX (363-8779). For the mail-order pharmacy, call (866) DoD-TMOP (363-8667).

Discouraging Enlistment Hurts Defense

DoD and MOAA are concerned about opinions of youth “influencers.”

The House Subcommittee on Military Personnel, chaired by Rep. John McHugh (R-N.Y.), held a four-hour hearing July 19 about the status of military recruiting and retention programs. Dr. David Chu, undersecretary of defense (Personnel and Readiness), testified along with the four military personnel chiefs, followed by a second panel with Assistant Secretary of Defense (Reserve Affairs) Thomas Hall and the reserve component personnel chiefs.

Chu reported guarded optimism about active duty recruiting and retention programs, as all services met or exceeded their June goals. On the reserve component side, the Army National Guard and Navy Reserve missed their June recruiting goal. Several committee members expressed concern that both the active and reserve components of the Army remain short of their year-to-date recruiting efforts (86 percent and 78 percent of goal, respectively).
Service leaders cited negative media depictions of the war in Iraq as affecting recruiting, as well as the strong economy and lack of support from “influencers” (coaches, parents, and teachers) to recommend military service.

The committee’s ranking minority member, Rep. Vic Snyder (D-Ark.), expressed his strong support for continued vigorous recruiting efforts but took exception to service leaders’ efforts to blame the media, which he saw as reflecting national concerns rather than causing them.

MOAA shares the committee’s concerns about the services’ increasingly serious recruiting challenges in the face of extended and repeated combat deployment requirements. We’re grateful the nation continues to strongly support our troops and see military service as an honorable and important profession.

But MOAA is troubled by the reluctance of American mothers, fathers, and other influencers to recognize that maintaining a strong national defense is utterly dependent on the success of military recruiting efforts. Regardless of what one thinks about the war in Iraq, MOAA hopes all Americans recognize that discouraging service is harmful to our country because it undermines our capability to respond to both current and future defense challenges.

That’s why MOAA has signed a memorandum of understanding with the U.S. Army Recruiting Command and why we’re urging our council and chapter leaders and individual MOAA members to actively support military recruiting efforts and encourage America’s young people to serve.

Hill Considers Transition Programs

MOAA, TMC recommend increased budget, electronic documents, PTSD services.

Rep. John Boozman (R-Ariz.), chairman of the Economic Opportunity Subcommittee of the House Veterans’ Affairs Committee, held a hearing June 29 to examine the Transition Assistance and Disabled Transition Assistance programs (TAP/DTAP) jointly managed by DoD, the VA, and the Department of Labor.

One reason for the hearing was a Government Accountability Office (GAO) study indicating these programs aren’t meeting the needs of the Guard and Reserve. The GAO also recommended the departments explore options for improving Guard and Reserve participation either before or after release from active duty.

The DoD witness said that DoD is setting up a “demobilization workgroup” with the VA, the Department of Labor, and the services to recommend improvements.

Testifying for The Military Coalition (TMC), MOAA’s Col. Bob Norton, USA-Ret., recommended:

• Matching program budgets to the increasing demand. Current budgets don’t include projected separations of Guard and Reserve members.
   
• Tailoring services to post-separation delivery in hometown reserve or family support centers.
   
• Refining pre-separation checklists to include information about reemployment rights, TRICARE, VA care, financial protections under the Servicemembers’ Civil Relief Act, and other benefits.
   
• Expanding services for families of disabled veterans, including those with PTSD.
   
• Speeding development of an electronic DD Form 214 (separation document), electronic medical records, and benefits delivery at discharge programs.

VA Shortfall Addressed

Health care budgeting snafu sparks anger along with funding scramble.

Earlier this year, House and Senate veterans’ affairs committee chairmen resisted calls by Democrats and veterans’ groups for significantly bigger plus-ups in veterans’ health care funding after repeated assurances by VA leaders that extra funds weren’t needed.

In late June, Secretary of Veterans Affairs Jim Nicholson appeared before the Senate Veterans’ Affairs Committee and acknowledged a $1.5 billion deficit in this year’s VA health care budget and said the shortfall will be even bigger — $2.6 billion — in FY 2006. He said VA budget staffers had grossly underestimated the number of veterans returning from Iraq and Afghanistan who would need VA medical treatment.

The Senate reacted quickly the next day and voted 96-to-0 to appropriate $1.5 billion in emergency supplemental funds for 2005.

The House acted a day later and half a billion dollars shorter — voting 419-0 to approve only the $975 million recommended by the administration. That didn’t go down well with the Senate Appropriations Committee, which again voted unanimously to assert the Senate would accept nothing less than $1.5 billion.

House Veterans’ Affairs Committee Chairman Steve Buyer (R-Ind.) called for quick action to determine the real funding needs, and Senate Committee Chairman Larry Craig (R-Idaho) said, “We in Congress must fix this financial problem.”

The acknowledgement was vindication for military and veterans’ groups and others who had complained that the budget submission wasn’t sufficient to meet veterans’ needs.

Sen. Patty Murray (D-Wash.), an Appropriations Committee member who led efforts to add extra VA funding, was particularly critical, asserting that the administration was reluctant to make the sacrifices necessary to meet health care commitments to veterans. Significantly, Craig appeared with her at a press conference and agreed with many of her criticisms of the VA budget development process.

Senate and House conferees meeting on appropriations for the Department of the Interior have added a $1.5 billion FY 2005 emergency VA spending measure to address the 2005 budget shortfall. At press time, action on that bill was near completion, and the president was expected to sign it shortly thereafter.

DACMC Mulls Over Benefit Changes

Advisory committee will recommend pay, retirement, and health care changes to the secretary of defense.

On July 20, the Defense Advisory Committee on Military Compensation (DACMC) continued its compensation fact-finding, receiving several DACMC staff presentations and testimony from senior enlisted leaders.

DACMC’s charter is to review the military compensation system and make recommendations to the secretary of defense about possible changes to military pay, benefit, and quality-of-life programs. The committee hopes to provide an interim report in September, with a final report sometime next year.

The morning session consisted of briefings about military retirement, health benefits, special and incentive pays, quality of life, and reserve compensation. DACMC Chairman Adm. Don Pilling, USN-Ret., was careful to state that the briefings represented initial research and input from the committee staff rather than DACMC positions.

In general, the staff briefings tended toward supporting a more flexible, skill-specific pay and bonus system rather than a common basic pay table for all servicemembers, a shift toward a more civilian-style retirement system for new entrants, and imposition of increased health care costs on military beneficiaries to more closely reflect private sector practices. The reserve compensation briefing acknowledged a need for change but was skeptical of universal health coverage for the Selected Reserve or reducing the reserve retirement age.

The afternoon session involved testimony from separate panels of active duty and reserve component senior enlisted advisors. Panel members recommended consideration of various initiatives, including pay-for-performance, pay table reform, and reduction of disparities between active and reserve compensation. All of the reserve enlisted leaders supported health coverage for all Selected Reserve members.

In general, MOAA noted that the staff briefings (other than the quality-of-life briefing) tended to focus on increasing government costs, with insufficient recognition, in our view, of the unique and arduous service and sacrifice that military benefit programs are intended to offset. We were heartened when one commissioner expressed skepticism of the attribution of a $23,000 annual compensation value for health care for each active duty member (which included an accrual charge for all future care in retirement).

MOAA thinks the military compensation system must be able to stand up to reasonable scrutiny and that periodic adjustments are necessary to address changing needs.

But most of the unique and fundamental sacrifices and institutional needs inherent in military service remain unchanged. In the past, innumerable compensation study groups’ recommendations have gone nowhere because they failed to adequately recognize that reality. MOAA will report on future DACMC proceedings with interest in the context of that important standard.

Commission Hears Disability Concerns

VA says number of disabled on rolls growing by 5,000 to 7,000 monthly.

The Veterans’ Disability Benefits Commission continued its data-gathering efforts at a July 22
hearing that featured testimony from VA and DoD representatives.

VA Undersecretary for Benefits Daniel Cooper testified that recent legislation aimed at easing inequities for disabled retirees has posed significant challenges for VA claims processors. Since the end of 2000, he said, the number of veterans with service-connected disabilities has risen by about 13 percent (to almost 2.6 million) and is growing by 5,000 to 7,000 a month. Further, he indicated that the average number of disabling conditions to be evaluated per claim has risen from 2.5 a decade ago to about 10 per claim today. (Note: MOAA would certainly acknowledge that the concurrent receipt law raised incentives to submit claims, but much of this increase would have taken place anyway as wounded veterans returned from Afghanistan and Iraq.)

Cooper suggested, among other things, that the commission should reexamine the intended purpose of disability compensation, the principles of presumptive designation of certain conditions as service-connected (e.g., due to Agent Orange or Gulf War Syndrome), issues of combat versus non-combat injuries, the desirability of placing time limits on initial claims, and establishing limits on appeals.

A DoD witness discussed the military retirement system and the implementation of several recent legislative changes to ease the disability offset to retired pay. He reported that there are nearly 1.8 million military retirees in all who received a combined $34.7 billion in retired pay during FY 2004.

By law, the commission’s final report is due in August 2006. Because the commission’s explicit tasking is to review the entire disability rating and compensation system, including the concurrent receipt issue, legislative leaders are reluctant to make significant further changes in
the law before receiving the commission’s report. In effect, this means that prospects are dim for any major action before 2007.

In the meantime, MOAA will continue to pursue incremental changes, such as this year’s effort to provide full, immediate concurrent receipt for retirees designated by the VA as unemployable.