Check out MOAA’s new brochure (Premiums Already Paid – In Full) for an easy to read version of this fact sheet.
Issue: In 2008, the Pentagon recommended dramatically raising health costs for retired families for FY2009 and future years by:
- Raising the $460 family TRICARE Prime enrollment fee as high as $2,086
- Raising annual $300 family TRICARE Standard deductibles as high as $1,147
- Raising retail pharmacy copays for all from $3 generic/$9 brand /$22 non-formulary to $15/$25/$45 (note: retail pharmacy hikes would have applied to all beneficiaries)
The FY2010 budget proposed by DoD does not contain any fee increases. This is good news for now but we anticipate the FY2011 budget will contain some type of fee increases.
Background: DoD asserted that rising health care costs are competing with weapons programs. The Joint Chiefs endorsed TRICARE fee increases because the choice was forced on them by their political leaders, who wanted the increases to bring military beneficiary costs more in line with civilian practices.
- Comparison with corporate practices is inappropriate. Exceptional military medical and retirement benefits are the primary offsets for enduring decades of extraordinarily arduous service conditions. Military retirees pay huge "up front" health premiums through 20-30 years of service and sacrifice. Recruiting problems show few Americans are willing to pay that heavy premium for that benefit.
- Proposed increases are grossly out of line with benefit levels enacted by Congress. Proposed increases would far outstrip annual retired pay increases and greatly erode retired compensation value. Congress knew enacting TRICARE For Life wouldn't be cheap. Don't penalize retirees for Congress' action.
- Penalizing those who serve arduous 20- to 30-year military careers is inconsistent with past Congressional action. For four years, Congress rejected far smaller VA fee increases for nondisabled veterans who had served as few as two years. Quadrupling fees for those who served 20-30 years in uniform would be even more inappropriate.
- The Nation's obligation to military retirees exceeds corporate obligations. The government has a moral and practical reciprocal obligation to provide benefits commensurate with the extraordinary commitments it requires from career servicemembers. Mid-career military losses can't be replaced like civilians can.
- Eroding benefits for career service can only undermine long-term retention and readiness. Today's troops are very conscious of Congress' actions concerning their future benefits. MOAA surveys show 95% of active-duty members oppose such increases. Reducing military retirement benefits would be especially ill-advised when a severely overstressed force is already at increasing retention risk.
- The priority should be fixing TRICARE. Doctors say TRICARE is one of the lowest-paying plans in the country and imposes far more administrative requirements than other plans. Beneficiaries at many locations have difficulty finding providers willing to take them. See below for a list of needed fixes.
- The country can afford to pay for both weapons and military health care. Recent defense budgets (in wartime) represent only about 4% of GDP -- far lower than the 5.7% peacetime-year average since World War II. The world's richest country doesn't need to make military retirees pay for weapons.
MOAA Position: The government has many options to contain costs without penalizing beneficiaries. See a list of potential cost-saving options. MOAA believes TRICARE fees should not rise in any year by a percentage that exceeds the percentage growth in their military compensation.
Key Bills/Status: Once again Congressman Chet Edwards has introduced H.R. 816, the Military Retirees Health Care Protection Act..
Sen. Frank Lautenberg’s (D-NJ) was able to add an amendment to the Senate version of the defense bill. His amendment emphasized the need to sustain a military health benefit consistent with the unique demands and sacrifices inherent in a military career, and the need to find other ways of cutting DoD health costs besides shifting costs to retirees.
