THE PRESIDENT'S FY 2007 BUDGET proposes dramatic increases in TRICARE enrollment fees and deductibles for retirees under age 65 and steep retail pharmacy fee increases for all beneficiaries. MOAA strongly opposes that plan.

DoD officials argue that:

• military health care costs are crimping other military needs;
• military health care benefits are "extremely rich" compared to civilian plans; and
• health care fees for retirees haven't changed since 1995.

MOAA says the country owes far more to military retirees than General Motors does to its employees. Military retirement benefits are the only offset for the extraordinary demands inherent in a military career. Military retirees paid far greater premiums - in sacrifice - than any civilian.

The Pentagon should ask for a bigger Defense budget rather than seeking to "tax" military retirees to fund other Defense needs. The Pentagon plan would triple retired officers' TRICARE Prime enrollment fees over the next two years and al--most quadruple costs for TRICARE Standard (see "Proposed Fee Growth Versus Retired Pay Growth," below). After that, the fees would be adjusted annually at triple the rate of retired pay growth.

The Joint Chiefs of Staff support the fee hikes because they've been told it's the only way they'll get money for weapons needs. Making the Joint Chiefs choose between the two is just plain wrong.

The majority of the savings comes from the assumption that the increases would drive hundreds of thousands of retirees who are under age 65 out of TRI-CARE. If that doesn't happen (as MOAA believes it won't), further fee increases would be considered.

Testifying in February for fee increases, the secretary of Defense and chairman of the Joint Chiefs of Staff drew varying res-ponses. Sen. Lindsey Graham (R-S.C.) applauded the witnesses for thinking "out of the box" and appeared to support at least some increases, while Rep. John McHugh (R-N.Y.) and others on the House side criticized the appropriateness of the fee increases and questioned the department's savings calculations.

Much of the Pentagon's concern about increasing health care costs involves the $10 billion annual deposit to the TRICARE For Life (TFL) trust fund. When defense leaders first complained that this requirement was crimping other readiness requirements, Congress put a provision in the FY 2005 National Defense Authorization Act (Public Law 108-375) that shifted the requirement to make that deposit from the Defense budget to the Treasury budget. The clear intent was that TFL funding wasn't to be taken from other readiness needs.

The Office of Management and Bud-get, with a "wink and a nod" from the budget committees, has flouted the law and continues to charge the deposit against the Defense budget. That's why the administration has wrongly forced the Joint Chiefs of Staff to choose between retiree health funding and weapons programs. It's a false choice. If the administration obeyed the law, the debate wouldn't be necessary.

MOAA has worked with Reps. Chet Edwards (D-Texas) and Walter Jones (R-N.C.) to develop legislation (H.R. 4949) that would bar the Pentagon from increasing TRICARE fees and specify that only Congress can do that.

Matching Reserve Benefits to Service Expectations

THE DAYS OF THE "WEEKEND WARRIOR" are gone. Today's Guard and Reserve troops will be mobilized every five or six years. But will reservists stay the course under the new plan?

DoD says yes: Reenlistment rates, spurred by tax-free bonuses in Iraq and Afghanistan, are up. DoD researchers say reserve retirement benefits don't influence "re-up" decisions. Others, including reservists themselves, MOAA, and the Senate, see things differently.
Reserve mission increases and smaller forces mean reservists have far more active duty time than was envisioned in 1948, when the age-60 reserve retirement rule was created.

Reservists shouldn't have to suffer major cuts in their civilian retirement plans because the government demands more duty time. The government has a reciprocal obligation, in return for imposing that added sacrifice, to help offset reservists' civilian retirement losses.

Last year, the Senate passed legislation to reduce the age-60 reserve retirement age by three months for each 90 days served on active duty since Sept. 11, 2001. But Senate and House negotiators could not agree, and the issue was tabled.

Reserve retirement reform isn't going away. The public recognizes the new realities of reserve service commitments, and so should the government.