New SBP Bills

Reps. Brown and Saxton kick off cosponsorship campaigns for legislation to eliminate the SBP-DIC offset and accelerate implementation of paid-up SBP coverage.

Rep. Henry Brown (R-S.C.) and 23 other original cosponsors have introduced H.R. 808, which would end the dollar-for-dollar deduction of Dependency and Indemnity Compensation (DIC)—paid by the VA when the servicemember’s death is due to service-caused conditions—from the survivor’s military Survivor Benefit Plan (SBP) annuity. Because most SBP annuities are relatively low in such cases, the SBP-DIC offset often eliminates most or all of the SBP, leaving many surviving spouses with only the $993 monthly DIC annuity. At press time, H.R. 808 had 54 cosponsors.

Rep. Jim Saxton (R-N.J.) has introduced H.R. 968, which would change the effective date of 30-year, paid-up SBP from Oct. 1, 2008, to Oct. 1, 2005. Congress authorized paid-up SBP coverage in 1998 for any retiree who reaches age 70 and has paid at least 30 years of SBP premiums. But the effective date was delayed for 10 years to save money. In effect, this imposed a “greatest generation tax” on the oldest military retirees who enrolled when SBP first was enacted in 1972. Even before that, many paid premiums under the earlier Retired Servicemen’s Family Protection Plan. By this fall, those 1972 enrollees already will have paid almost 20 percent more SBP premiums than a 1978 enrollee will ever have to pay. If they have to wait until 2008, they’ll end up paying 34 percent more than 1978 retirees.

As MOAA reported last month, in the Senate, Sens. Bill Nelson (D-Fla.) and Jon Corzine (D-N.J.) have combined the SBP-DIC and paid-up SBP initiatives into a single bill, S. 185. Fixing these SBP inequities is a top goal for MOAA this year. See the tear-out brochure on these issues in the center of this magazine after page 46. You can help by visiting MOAA’s Web site at http://capwiz.com/moaa/home and clicking on the “SBP Fixes” link to urge your legislators to support these important bills. In addition, use MOAA’s toll-free Capitol Hill hot line, (877) 762-8762, to ask your U.S. representative to cosponsor H.R. 808 and H.R. 968 and your two U.S. senators to cosponsor S. 185.

Death Benefits in Spotlight

SGLI, death gratuity improvements are likely.

The Senate Armed Services Committee (SASC) and Senate Veterans Affairs Committee (SVAC) each held hearings in early February to explore what more should be done for survivors of members killed on active duty.

The SASC heard testimony from the service vice chiefs of staff, concerning Sen. Jeff Sessions’ (R-Ala.) and Sen. Joseph Lieberman’s (D-Conn.) S. 77, which would raise the death gratuity from the current $12,420 to $100,000 for servicemembers killed in combat and increase the maximum Servicemembers’ Group Life Insurance (SGLI) coverage to $400,000 (versus the current $250,000). The bill would have the government automatically pay the premium on $150,000 of SGLI for members assigned in a combat zone. It would make the changes retroactive to Oct. 7, 2001—the official start date of the war on terror. (The government already provided substantial payments to survivors of all people killed in the Sept. 11, 2001, terrorist attack, including military casualties.)

Witnesses included DoD’s personnel chief, Dr. David Chu, and the service vice chiefs of staff. Chu endorsed Sessions’ bill, but the vice chiefs favored increasing the death gratuity for all servicemembers killed on active duty. They expressed concern about the difficulties and propriety of trying to assign different benefit values for military deaths depending on whether the death occurred in a specific geographic area.

In an interview with CNN, MOAA President Vice Adm. Norbert R. Ryan Jr., USN-Ret., supported the vice chiefs’ position, saying, “The death gratuity ought to cover all of our men and women in uniform, because they’re serving in lots of other dangerous places besides Iraq.”

Sen. Bill Nelson (D-Fla.) also noted at the hearing that reduction of military Survivor Benefit Plan (SBP) annuities by the amount of any payment from the VA for service-caused deaths remains a “glaring unfairness” and that his new bill, S. 185, would end that offset. Sen. Carl Levin (D-Mich.) agreed that reducing the SBP entitlement for survivors by the amount of Dependency and Indemnity Compensation (DIC) is a “huge issue” and said he also has introduced a bill (S. 11) that would end that practice.

SASC Chairman John Warner (R-Va.) and Levin promised quick action on death benefits and called for DoD to submit proposed language in time for consideration with the administration’s coming supplemental appropriation request for Iraq.

MOAA and The Military Coalition (TMC) have sent Sessions a letter proposing the $100,000 death gratuity be payable to all survivors of servicemembers killed on active duty. TMC also recommended providing $100,000 of government-paid-for SGLI coverage to all servicemembers if they elect $300,000 in coverage. This would be more in line with employer-paid coverage levels prevalent in large corporations while still encouraging servicemembers to take maximum SGLI coverage.

At the SVAC hearing, Chairman Larry Craig (R-Idaho) and Ranking Minority Member Sen. Daniel Akaka (D-Hawaii) expressed their intent to ensure the nation fulfills its obligations to military survivors.

Two spouses (including Jennifer McCollum, who appears on the cover of the MOAA SBP brochure after page 46) whose husbands were killed in the war on terror provided moving testimony about the difficulties they experienced during their transition from active duty family status, highlighting the unfairness of the SBP-DIC offset.

A second panel of VA, DoD, and Social Security Administration witnesses discussed what is being done to speed benefits to survivors. During questioning, it became clear surviving spouses have encountered numerous problems in information delivery and assistance. Committee members told DoD witnesses they expect improvements.

Talking Hearings

MOAA confers with Hill leaders, staffs about 2005 priorities.

February was “meeting month” on Capitol Hill, as legislators and their staffers and MOAA representatives worked to compare and prioritize legislative goals in preparation for hearings and development of draft authorization bills.

House Minority Leader Nancy Pelosi (D-Calif.) invited MOAA President Vice Adm. Norbert R. Ryan Jr., USN-Ret., and other military and veterans association leaders to meet with her and the senior Democrats from the armed services, budget, veterans affairs, and appropriations committees Feb. 17 to outline her “21st Century Veterans Bill of Rights.” Pelosi and Reps. Steny Hoyer (D-Md.), Ike Skelton (D-Mo.), John Spratt (D-S.C.), Lane Evans (D-Ill.), Chet Edwards (D-Texas), and others endorse initiatives in this package, including: full, mandatory funding for VA health care; full concurrent receipt of military retired pay and VA disability compensation; repeal of the SBP-DIC offset; and a permanent increase in Army end strength to ease operational stresses on troops and families.

Ryan highlighted the need for continued bipartisan cosponsorship for these and other issues, such as expanded health coverage for the Selected Reserve.

Lobbyists from MOAA and other associations also met for several hours with House Military Personnel Subcommittee staffers to discuss a long list of proposals to assist returning wounded servicemembers and their families, as well as survivors of servicemembers killed on active duty. Initiatives discussed included survivor benefit upgrades, special needs for wounded Guard and Reserve members, continuation of combat pays during hospitalization for combat wounds, and improved casualty assistance for survivors and families of the severely wounded.

No Partying on Reserve Bill

Conservatives, liberals unite on Guard and Reserve needs.

On Feb. 9, MOAA President Vice Adm. Norbert R. Ryan Jr., USN-Ret., participated in a press conference called by a bipartisan group of senators and House members to introduce new bills to expand Guard and Reserve TRICARE coverage and lower the reserve retirement age.

Sens. Lindsey Graham (R-S.C.), Mike DeWine (R-Ohio), George Allen (R-Va.), Patrick Leahy (D-Vt.), and Hillary Clinton (D-N.Y.) spoke eloquently about the need to extend TRICARE eligibility to all members of the Selected Reserve to ensure the readiness and retention of these forces and their families. House champion Rep. Tom Latham (R-Iowa) and Rep. Joe Wilson (R-S.C.) also joined the press conference in an unusual display of bicameral support.

S. 337, The Guard and Reserve Readiness and Retention Act of 2005, would allow Selected Reserve members to enroll in TRICARE, the military’s health care system, for an annual premium without regard to their status of activation.

Graham noted that Congress passed legislation this past year allowing reservists mobilized for 90 days or more on active duty to purchase one year of TRICARE coverage for each 90 days served. While acknowledging this as an important first step, he said it is neither enough to ensure medical readiness nor to take care of Guard and Reserve families who sacrifice so much for the nation. Graham asserted that all other part-time federal workers can participate in government health insurance and that Guard and Reserve families deserve the same opportunity.

Latham announced introduction of his companion bill in the House, H.R. 558.

In addition to expanding TRICARE coverage, the bills would reduce the age at which a Guard or Reserve servicemember could attain retirement eligibility, depending on length of service. Currently, the reserve retirement age is 60. H.R. 558 and S. 337 would allow retirement at age 59 with 22 years of service, 58 with 24 years, 57 with 26 years, etcetera, down to age 53 with 34 years of service.

Speaking at the press conference, Ryan expressed his gratitude to the sponsors, emphasizing the importance of addressing Guard and Reserve health and retirement issues in the near term. “History reminds us that a good Army takes generations to build but only a few short years to break,” he said. “Because of frequent and prolonged deployments, our citizen-soldiers are becoming ‘soldier-citizens.’ The nation needs to send a clear message that we recognize Guard and Reserve members and their families for their sacrifices.”

Governors on Guard

MOAA letter prompts governors to discuss military manpower.

On January, MOAA President Vice Adm. Norbert R. Ryan Jr., USN-Ret., wrote to Virginia Gov. Mark Warner (R), asking him to address publicly—through the National Governors Association (NGA), which he currently chairs—the need for permanent Army and Marine Corps end-strength increases and long-overdue improvements in Guard and Reserve health care and other benefits. Former Secretary of Homeland Security Tom Ridge had suggested approaching the NGA when Ryan spoke to him this past year about the ramifications of active force shortfalls for the National Guard and Reserve.

Shortfalls of active duty forces have necessitated extensive and repeated mobilizations of Guard units. This, in turn, has affected availability of National Guard manpower and equipment resources to meet in-state natural disasters and other requirements. Long-term continuation of these increased stresses for guardmembers and their families have significant implications for recruiting, retention, and readiness that affect national and state needs alike.

Warner was concerned enough about this issue to invite Ryan to meet with him and his staff Feb. 21 at the Rand Corp.’s headquarters in Arlington, Va. Also invited to the meeting were former Army Personnel Chief Lt. Gen. William Reno, USA-Ret., former Army Chief of Staff Gen. Dennis Reimer, USA-Ret., and former Secretary of the Army Jack Marsh.

The discussion piqued significant interest on Warner’s part, and he indicated his intent to introduce the issue at the NGA meeting at the end of February.

VA Budget Looks Short

MOAA urges full funding for health, claims, transition, and GI Bill.

The House Veterans Affairs Committee, headed by new Chairman Steve Buyer (R-Ind.), held
a hearing Feb. 16 to review the president’s VA budget request for FY 2006. The committee heard testimony from three panels of witnesses, including newly confirmed VA Secretary Jim Nicholson. One panel was composed of military and veterans’ organization witnesses, including MOAA Deputy Director of Government Relations Col. Bob Norton, USA-Ret.

Nicholson said the administration’s plan increases the VA budget by 2.7 percent over last year. Association witnesses took issue with that description, pointing out that much of the budget increase comes from plans to raise fees and copayments for certain veterans and optimistic assumptions about increased collections from veterans’ insurance companies. They asserted that, once medical inflation and increasing demand for care for combat veterans from Iraq and Afghanistan are taken into account, the proposed budget won’t allow the VA even to continue its current level of services.

Nicholson said the administration’s budget request proposes to raise drug copayments for lower-priority non-disabled veterans and impose an annual usage fee of $250 for Priority 7 and 8 veterans (those without compensable disabilities and whose incomes exceed indigence levels). Buyer backed the enrollment fees to sustain the VA health system, asserting that the VA should focus its efforts on the disabled and indigent. Rep. Lane Evans (D-Ill.), the committee’s senior Democrat, strongly disagreed, saying the administration’s own estimates show these fees were designed to drive 213,000 veterans from the VA system.
 
Norton urged the House panel to provide full funding for all currently enrolled veterans, consistent with the recommendations of the recent President’s Task Force on DoD/VA Health Care. He also noted the critical need for additional funding to reverse cutbacks in claims processing staff and reduce the disability claims backlog, which now is lengthening again just when there is a new influx of disabled returnees from Iraq and Afghanistan. He urged immediate action to ensure a “seamless transition” from military to VA health coverage to ensure wounded returnees aren’t further disadvantaged by administrative and records conflicts between DoD and VA personnel and health systems.

Norton also expressed MOAA’s support for improving the Montgomery GI Bill, including automatic adjustment of Reserve GI Bill benefits to maintain their intended value (about 50 percent of the active duty rate).

The hearing came on the heels of a more extensive, informal dialogue Feb. 11 between veterans affairs committee leaders and association representatives at The Citadel in Charleston, S.C. Buyer and four of his subcommittee chairmen invited leaders of MOAA and nine other military and veterans associations to this “off-site” meeting to discuss respective goals for and concerns about VA programs.

Late-breaking News: Just before this column went to press, the chairmen of the House and Senate veterans affairs committees announced their committees’ rejection of the administration’s proposal to increase pharmacy copayments. However, both committees supported charging enrollment fees for Priority 7 and 8 veterans. The Senate committee, chaired by Sen. Larry Craig (R-Idaho), endorsed the administration-recommended $250 fee. Buyer and the House committee proposed charging a $230 enrollment fee for Priority 7 veterans (to match the fee paid by military retirees enrolled in TRICARE Prime, the military HMO-style health plan). For Priority 8 veterans, the House committee proposed a sliding scale of fees ranging from $230 to $500, depending on the veteran’s income.

Defense Budget Fares Better

Administration recommends pay, housing plus-ups, no TRICARE fee increases.

In addition to the VA initiatives outlined above, President George W. Bush’s recently released FY 2006 budget proposal contains a number of provisions of interest, including a 3.1 percent pay raise for active duty and Guard and Reserve members and additional recruiting and retention bonuses.

The president’s budget did not propose copayment or other fee increases for TRICARE or TRICARE For Life (though DoD leaders’ repeated public expressions of concern about rising DoD health care costs could indicate such proposals might not be far off). In all, the budget calls for $109 billion for personnel programs, including:

• housing allowances that (for the first time) cover median off-base housing costs, by grade and locality;
• changing the Army from a division-based structure to one based on new, more agile “modular” brigades;
• boosting the number of Special Operations forces by 1,400 and increasing spending for language training;
• continued rebasing activities aimed at returning 70,000 military personnel and 100,000 family members and civilians from overseas bases to continental U.S. installations; and
• conversion of several thousand non-deployed medical positions to civilian billets.

Reserve TRICARE Roll-Out

Program opens April 26, but some glitches remain to be fixed.

TRICARE is gearing up to roll out TRICARE Reserve Select (TRS), and MOAA has obtained access to the rules that will govern the new benefit, set to kick off April 26. TRS allows certain Selected Reservists and their family members access to TRICARE Standard (DoD’s fee-for-service health plan) in return for
a monthly premium.

To qualify, the member must have been mobilized on a contingency operation for 90 days or more since Sept. 11, 2001. Each 90 days served provides eligibility for one year of TRS coverage, so a one-year deployment can earn a Selected Reserve member and his or her family four years of TRS. The member must commit to continued participation in the Selected Reserve in return for TRS benefits.

Rules governing this benefit are far from simple. First, activated reservists must complete a preliminary service agreement before leaving active duty. This document commits the member to one year of Selected Reserve service for each year of TRS benefits. Failure to sign this agreement before demobilization will result in loss of the benefit.

Second, a service agreement is final only when reserve component agrees to keep the member in the Selected Reserve. It’s not just a matter of the member’s willingness to drill; there must also be a Selected Reserve billet available for the entire time period.

Premiums will be set at 28 percent of the total cost of TRS coverage and paid monthly. Premiums stop upon mobilization. Enrollees can elect self-only or self-and-family coverage. DoD will have to calculate the final amounts. Previously, the Congressional Budget Office estimated the premiums might be in the range of $530 for an individual and $1,860 for a family, but those were only preliminary estimates. Premiums may prove higher or lower.

TRS will offer access to TRICARE Standard coverage only. Reservists and their families will not be able to enroll in TRICARE Prime or use military treatment facilities or military pharmacies. MOAA appreciates Congress’ work in authorizing TRS, but several issues remain to be addressed. First, MOAA believes strongly that all drilling Guard and Reserve members and their families should be eligible for TRS. Those who haven’t yet been mobilized already likely will be shortly.

Another problem is that, under Pentagon-announced rules, any TRS eligibility contract is voided if the member is mobilized again. For example, a member deployed for one year earns four years of TRS coverage. But if the member is mobilized again for 90 days after two years in TRS, that voids the remaining two years of eligibility. Upon return from the 90-day deployment, the member only will have one year of TRS eligibility—no matter how many years the member agrees to in future service. This is patently unfair.

But the most significant problem might be the requirement for the servicemember to elect TRS and execute the service agreement before leaving active duty status. This certainly will result in snap decisions at demobilization sites by members who haven’t had a chance to discuss the issue with their family members. Health coverage is a family issue, and members and their families need full information and a full discussion opportunity to make informed decisions.

TRICARE already covers members and families for six months after demobilization. MOAA thinks these members and families should be able to make their TRS decision anytime within that period.