Concurrent Receipt  | Disabled retirees need your help. 

Disability Offset on Front Burner

Rep. Jim Marshall’s (D-Ga.) discharge petition, aimed at bringing Rep. Mike Bilirakis’ (R-Fla.) H.R. 303 to the House floor for a vote, has put pressure on Republicans who haven’t signed the petition for fear of angering their leadership. They are feeling the heat from their constituents, who are asking why they won’t back up their cosponsorship with action now that they have a chance to actually get something done. As this article went to press, the petition had 202 signatures, only one of which was from a Republican.

We’re getting indications that several Republicans have said that if their leadership doesn’t take positive action by the end of the August recess, they’ll sign the discharge petition. So even if you get a negative or noncommittal response, don’t let up. Keep reminding your legislators that you expect substantive action this year, and elected officials need to back up their words with action. 

Whether or not your legislator has signed the petition or co-sponsored a concurrent receipt bill, we hope you will take the time to send them a message in support of this initiative. Please sign, stamp, and mail the postcards on the cover of this magazine. You then can follow up with a phone call through MOAA’s toll-free Capitol Hill hot line, (877) 762-8762.

Health Care  | Floor debate offers hope for future action.

Guard/Reserve Benefits Opposed

Secretary of Defense Donald Rumsfeld has sent yet another emphatic message that he opposes spending any more money on health care for disabled retirees. 

His July 8 “heartburn letter” to House and Senate Armed Services committee leaders said he would “join other senior advisors to the president in recommending that he veto the FY 2004 Defense Authorization Bill if it includes Senate-passed provisions authorizing concurrent receipt of military retirement pay and veterans’ disability compensation benefits, or expands TRICARE.” It said he’d also recommend a veto if the defense bill includes any change that would hamper a new round of base closures in 2005.

The administration’s opposition to concurrent receipt is nothing new. It’s what made Congress backpedal last year after both chambers passed substantive concurrent receipt plans. The pressure is on again this year, as several House members are spearheading an effort to bring the bill to the floor for a vote.

This year, Rumsfeld has stooped further to oppose much-needed health coverage continuity for drilling members of the National Guard and Reserve. Tens of thousands of these families have experienced significant health insurance problems in recent years because of the change in their coverage status when mobilized and demobilized from active duty. The Senate responded by passing a plan to let drilling guardmembers and reservists enroll in TRICARE coverage year-round (for a fee) or elect to have the government pay part of their civilian insurance premium while mobilized. MOAA and virtually all other military and veterans’ associations think such health coverage continuity is essential to protect Guard and Reserve families hurt by multiple mobilizations to fight our country’s battles around the world. Apparently, Rumsfeld disagrees. 

During floor debate on the yearly defense spending bill, Sen. Lindsey Graham (R-S.C.), himself a drilling reservist, indicated the Armed Services committee leaders were bowing to administration concerns about the potential cost of this initiative, while keeping open the possibility for action next year. 

“We are going to compromise on the Defense Authorization Bill and initiate a study of the best way to provide TRICARE coverage to Guard and Reserve members,” said Graham. “The [administration indicated] they are willing to help fund this [next year] if we can find the money.”

The Senate-passed Appropriations Act included a “sense of the Senate” resolution, sponsored by Sen. Tom Daschle (D-S.D.), expressing the goal of providing health care to reservists. 

“A National Guard or Reserve member is more likely to serve on active duty today than at any other time in our nation’s history,” said Daschle. “These troops work hard to stay prepared for the time when their nation calls, and they are eager to prove themselves when summoned to active duty. Nonetheless, we have been demanding more and more of them, and it’s time that we as a nation considered what we can give back.”

Neither MOAA nor legislative sponsors like Daschle and Graham are going to let this issue go away. If we’re going to keep mobilizing Guard and Reserve members at this pace, we have to protect their families against disruption of their health coverage. 

We hardly need another report on this well-documented problem. This is a serious issue and what’s needed is action. Pentagon leaders won this round, but we’ll be holding their feet to the fire to come through as promised with a proposal in 2004.

Taxes | Tax bills would mean savings for millions of TRICARE beneficiaries.

MOAA Supports Pre-Tax Premiums

Rep. Jo Ann Davis (R-Va.), chairwoman of the House Subcommittee on Civil Service and Agency Reorganization, held a hearing July 9 on H.R.1231, a bill to allow active duty and retired military members and federal civilian annuitants to pay their health insurance premiums on a pre-tax basis. This bill, if enacted, would mean significant tax savings on TRICARE Prime enrollment fees and premiums for TRICARE supplemental insurance or dental plans. 

Davis, an original cosponsor of H.R. 1231, said, “This is a matter of equity. The federal government has a long history of treating our active employees and retirees the same. They have access to the same health care; why shouldn’t they have the same ability to pay their premiums with before-tax dollars? And why shouldn’t our military personnel be able to do the same for their TRICARE program?”

Rep. Tom Davis (R-Va.), chairman of the House Government Reform Committee and sponsor of H.R. 1231, presented testimony in support of pre-tax health premiums. He said, “… now more than ever is the time to show our appreciation to those men and women who have [dedicated] and continue to dedicate their lives to our nation and our ideals. … I can think of few priorities as dear as providing appropriate health care for our retirees and our active duty military.” 

Since 2000, the Office of Personnel Management has provided current federal employees these pre-tax benefits. MOAA thinks military beneficiaries should enjoy equal tax relief regarding their health care expenses. 

Premium conversion is a benefit widely available in the private sector. If many smaller companies can provide this benefit to their employees, why can’t the government provide the same benefit to those who currently serve or have served their nation in uniform?

Sue Schwartz, DBA, RN, MOAA’s deputy director of Government Relations, testified, “Sacrifices are taken for granted as a part of the military life. However, in response to the hardships we impose upon our military families, it is important that every attempt is made to provide them with a quality of life that is competitive with the private sector.”

MOAA strongly supports this legislation. Rising health care costs affect all federal employees, civilian or uniformed, active or retired, and this proposal is essential to ensure all receive equal tax advantages. To send a message to your legislators in support of this bill or Sen. John Warner’s (R-Va.) companion bill S. 623, visit MOAA’s bills of interest page at http://capwiz.com/moaa/issues/bills. 

Social Security | Reductions in benefits affect many military retirees. 

MOAA Fights to End GPO/WEP Offsets 

Recently, MOAA  joined forces with the National Association of Retired Federal Employees and 48 other organizations in a coalition to push for the repeal of the Government Pension Offset (GPO) and Windfall Elimination Provision (WEP) in Social Security law. 

In 1977 and 1983, legislation was enacted that sharply reduced Social Security benefits for certain surviving spouses and federal, state, and local government retirees who were employed under the older federal Civil Service Retirement System or worked in state and local jobs not covered by Social Security. If these people become eligible for Social Security through other employment, they lose part of their Social Security check. GPO can reduce Social Security survivor benefits by as much as two-thirds while WEP can result in reduction of up to 60 percent of Social Security benefits for retirees. 

There are two key bills before Congress that would fix these problems—S. 349, sponsored by Sen. Dianne Feinstein (D-Calif.), and H.R. 594, sponsored by Rep. Buck McKeon (R-Calif.). The coalition seeking repeal of GPO/WEP plans briefings to Hill staffers on these two issues and already has participated in a hearing in the House before Rep. Clay Shaw’s (R-Fla.) Ways and Means Subcommittee on Social Security. 

So far, congressional support for the repeal of GPO/WEP is running ahead of the 107th Congress, with 21 sponsors in the Senate and a whopping 251 sponsors in the House. As we have seen on other issues, however, substantial cosponsorship is not a guarantee of success. This initiative’s projected costs mean that we have a difficult fight ahead. 

Health Care | WPS will handle claims starting in 2004.

DoD Awards TFL Claims Contract

On July 25, the Department of Defense (DoD) announced the award of a five-year, $487 million contract to Wisconsin Physician Service Insurance Corp. (WPS). WPS will handle claims processing, customer service, and other administrative concerns for the 1.5 million beneficiaries dually eligible for Medicare and TRICARE. The contract will be implemented in region 11 (Northwest) April 1, 2004, and will expand to other regions over the summer as current contracts expire. 

This award marks a departure from the current arrangement of the TRICARE For Life (TFL) contracts, in which contracts are managed regionally with separate companies responsible for administration and claims processing. By instituting a single contractor for TFL claims, DoD hopes to streamline the procedures for claims processing and move beneficiaries closer to the goal of a nationwide uniform benefit. 

The implementation of this contract also will realize a long-held goal for dual-eligible TRICARE beneficiaries under age 65. Currently, these beneficiaries’ claims are not transferred electronically from Medicare to TRICARE, and they have to file for reimbursement by hand. With the commencement of the WPS contract period, claims for all Medicare eligibles, regardless of age, will transfer for electronic processing by TRICARE. 

Over the next month, DoD will award a number of other health care contracts, including under-65 health care (separated into North, South, and West regions), customer service, and a national retail pharmacy contract. These changes, scheduled to occur in mid-2004, will significantly alter the landscape of military health care. MOAA will closely monitor the changeovers to ensure that beneficiaries see no disruption in their health care delivery.

Family Support | DoD highlights new programs for deploying families. 

Hearing on Military Families Held

Sen. Saxby Chambliss (R-Ga.), chairman of the Senate Armed Services Committee Personnel Subcommittee, and Sen. Lamar Alexander (R-Tenn.), chairman of the Senate Health, Education, Labor and Pensions Committee Children and Families Subcommittee, held a joint hearing June 20 to highlight challenges facing military families. 

In opening remarks, Chambliss stated, “Military families have been placed under tremendous stress in recent years. … The sacrifices made by military personnel and their families, the long and continuing separations … and the problems in their personal lives must be understood and carefully evaluated.”

John Molino, deputy undersecretary of Defense (Military Community and Family Policy), highlighted several new Department of Defense (DoD) initiatives to improve military family life including: 

• a pilot program, “One Source,” providing information and referral services to Marines and their families via phone worldwide 24 hours a day, seven days a week. DoD plans to make this available to all military families;
• issuing guidance to the armed services outlining services and issues to be addressed in deployment support;
• establishing a Joint Services Contingency Planning Group to assess what is needed to support the total force during deployment;
• working with the Department of Veterans Affairs to use its Readjustment Counseling Service Centers to support returning guardmembers and reservists; and
• developing a “quality of life quotient” to recognize and rate military-friendly communities to identify communities of excellence.

Col. James Scott, ARNG, director of Individual and Family Support Policy in the Office of the Secretary of Defense, offered additional proposals undertaken on behalf of National Guard and Reserve servicemembers and their families:

• publishing the first Guard and Reserve Family Readiness Strategic Plan 2000–2005 as a blueprint for greater support;
• developing a Joint Service Family Readiness Contingency Assessment Working Group to plan for challenges and provide information to families;
• updating the 5th edition of A Guide to Reserve Family Member Benefits to inform family members about benefits and entitlements;
• publishing a joint service/total force Guard and Reserve family readiness programs tool kit to help family members prepare for deployment;
• providing guidance on reserve family readiness in DoD instruction to encourage the commander to support family readiness;
• establishing more than 400 family assistance centers for guardmembers and their families;
• strengthening employer support through the National Committee for Employer Support of the Guard and Reserve to obtain employer and community support; and
• improving communications between DoD and employers and identifying ways to provide relief to employers during mobilizations.

Joyce Wessel Raezer, director of Government Relations for the National Military Family Association, and Shelley MacDermid of the Military Family Research Institute urged caution about how this current level of support will be sustained over the long term. Families are experiencing depletion as their resilience is worn down not only by increased deployments but also by the long work hours at their home duty station. 

Raezer said, “The stability of the military family and community and the ability of the servicemember to focus on the mission rest on the nation’s continued focus on the entire package of quality-of-life components.” 

MOAA strongly supports these important efforts. But we remain concerned about the long-term retention and readiness effects of making a much smaller force sustain a much higher, long-term deployment tempo. Even the best family support programs can’t make up the quality-of-life losses for families experiencing long separations interspersed with long duty hours at home. MOAA agrees that Congress and the administration must pay closer attention to such issues. We continue to think, however, that the long-term solution must include manpower increases to spread the higher operations tempo among more people.

Active Duty Pay | Ryan, McCain meet to discuss military pay.

Pay Comparability Law Highlighted 

In a July 24 meeting with Sen. John McCain (R-Ariz.), MOAA President Vice Adm. Norbert R. Ryan Jr., USN-Ret., expressed his thanks for the senator’s support of pay raises for active duty military members, and both men stated their firm commitment to eliminating a pending inequity in military pay raises. 

After years of military pay raises falling short of private-sector raises, Congress instituted a new comparability law in 1999. To account for the double-digit pay gap, legislators mandated that military pay raises until 2006 be at least one-half a percentage point above private-sector wage growth, as measured by the Employment Cost Index (ECI). When this 1999 law expires, an older law takes effect that limits pay raises, beginning in 2007, to one-half a percentage point below ECI, re-establishing a gap with the private sector. 

McCain has joined with Rep. Susan Davis (D-Calif.) to introduce companion legislation establishing pay comparability in law. McCain’s S. 945 and Davis’ H.R. 1885 would eliminate the old law that resumes in 2007 and impose a new standard of pay comparability by indexing all future military pay raises to the ECI. If enacted, these bills will go a long way toward ensuring that we never again see the recruiting and retention crises that plagued the military in the late 1990s. 

McCain’s and Davis’ efforts led to the inclusion of a pay-raise comparability provision in the Senate version of the FY 2004 Defense Authorization Bill. The proposal, similar to S. 945 and H.R. 1885, would need to survive conference committee negotiations with the House in order to be included in the final FY 2004 National Defense Authorization Act. 

Significantly, the administration did not express opposition to this proposal in its recent letter to defense bill conferees (for more on this letter, see page 17). Of course, the absence of a veto threat does not guarantee that House conferees will accede to the Senate version. However, it is likely that many members will feel more comfortable supporting a provision if they know it will not draw the wrath of the chief executive. 

MOAA is grateful to McCain and Davis for their support on this issue. We diligently will press for the inclusion of this measure in the completed authorization bill later this year. 

Taxes | Support is needed to push initiative over the goal line.  

MOAA Presses for Military Tax Relief

Despite strong shows of support from both houses of Congress, the military tax bill has not yet been enacted into law. After months of near-victory followed by frustration, MOAA is pulling out all the stops in an attempt to secure passage before the end of this legislative year. 

The tax bill, which would provide additional tax benefits for military homeowners, drilling members of the Guard and Reserve, and survivors of members killed on active duty, has been passed several times by the House and Senate over the past several months. Unfortunately, committee leaders have been unwilling to negotiate a final version of the bill and have instead let the issue languish. 

In a letter to President George W. Bush, MOAA President Vice Adm. Norbert R. Ryan Jr., USN-Ret., expressed his frustration at Congress’ inaction. “Our government has provided many hundreds of billions in tax relief for other American taxpayers in recent years, while imposing continued tax penalties on men and women sent into harm’s way to protect our national interests around the world,” Ryan said. “They and their families deserve fair tax treatment, too.”

The letter can be found on MOAA’s Web Base at www.moaa.org/moaataxltrpres.pdf. 
In addition, Ryan recently authored an editorial in the service Times newspapers and letters to major media outlets across the country. Members of MOAA’s Government Relations staff have been meeting with leadership in both chambers of Congress in an attempt to win support for upcoming legislative action. 

Now, others are speaking out. On July 25, The Washington Post printed a scathing editorial that criticized legislators for their inaction. Describing the tax bill as a “shamefully unfinished piece of legislation” and the squabbling over minor differences “a festival of finger-pointing,” the editors issued a ringing endorsement of immediate action. “Before skipping town [for the August recess], Congress should … give servicemembers in Iraq the benefits that everyone agrees they deserve.” 

Please do your part to help us win final enactment of this important legislation. Send a message to your legislators via the Web at http://capwiz.com/moaa/home/. Our men and women in uniform have waited too long for tax relief, and they shouldn't have to wait any longer.