MOAA's Legislative Agenda | Equity, readiness, commitment key.

2003 Goals: SBP, Concurrent Receipt, Health Care, Pay Comparability Top List

MOAA's legislative goals for the first session of the 108th Congress are designed to promote equity and readiness while fulfilling commitments made to servicemembers in return for their extended and arduous service careers. We must continue the battle on several key issues left unresolved in 2002, including raising the Survivor Benefit Plan (SBP) age-62 annuity; authorizing concurrent receipt of military retired pay and veterans' disability compensation; improving health coverage, especially for members under age 65; and restoring full comparability of military and private-sector pay.

But we can take satisfaction in having won several important gains during the 107th Congress, including:

• a cumulative 11.7 percent two-year pay raise for active duty, Guard, and Reserve members;
• substantially eliminating the retired pay offset for certain disabled retirees with 20 or more years of service and any disability rating associated with award of the Purple Heart or a combat- or operations-related disability rating of 60 percent or higher (see details, p. 28);
• a cumulative 46 percent increase in GI Bill benefits;
• a legislative prohibition against forcing retirees to choose between military and Department of Veterans Affairs (VA) health care;
• expanded eligibility and increased special compensation payments for certain severely disabled retirees;
• SBP coverage for survivors of members killed on active duty;
• transition health coverage for Guard and Reserve call-ups and their families after leaving active duty;
• 63 percent increase in per diem and lodging reimbursements for permanent change-of-station moves;
• TRICARE Prime Remote coverage (reduced copayments) for family members of deployed active duty, Guard, and Reserve personnel;
• reduced disincentives for doctors to participate in TRICARE by requiring TRICARE to accept Medicare credentialing and other administrative practices; and
• Soldiers' and Sailors' Civil Relief Act protection for guardmembers called up in state status for national homeland defense.

While these are substantive gains, our biggest goals remained unsatisfied in 2002 and will require redoubled grassroots action in the coming year.

The remainder of this column summarizes our top legislative objectives as the first session of the 108th Congress begins. Although not all of these initiatives will pertain to you individually, it's extremely important that all members of the military and veterans' community mutually support each other's issues. If we only support those that affect us personally, we fragment our base of support and reduce the chance of success on every issue.

So read this column, call your representatives and senators, write letters, send e-mails, make phone calls — but get involved! If you have access to an e-mail account and don't already receive MOAA's weekly Legislative Update, we need you to stay informed and participate in our calls to action (see the magazine coverwrap for details). Your help will, indeed, make a difference.

Health Care Issues

Preserving and enhancing health care coverage remains a top priority for MOAA. Health care benefits for older beneficiaries were markedly improved in 2001 with the implementation of the TRICARE Senior Pharmacy and TRICARE For Life (TFL). These two programs are now saving military Medicare-eligible couples $4,000 to $5,000 each year in insurance premiums and pharmacy expenses — a huge stride toward fulfilling the "lifetime health care" commitment.

Our next major challenge is to improve health coverage for younger beneficiaries and to provide more consistent, reliable, and equitable coverage regardless of age or geographic location. MOAA will seek to preserve and expand health care choices and resist initiatives to limit those options for budgetary or administrative convenience.

The following summarizes MOAA's health care goals for 2003:

Health program funding: Seek full funding for the Defense Health Program (DHP) to ensure both military readiness and beneficiary needs are met. This includes realistic budgets and working to ensure Congress fully funds any unanticipated contingency or other requirements that would overtax existing programs and budgets.

Continue to improve TRICARE: In recent years, Congress has enacted significant health care improvements, especially for Medicare-eligible beneficiaries and active duty families. But much work remains to be done. In the first session of the 108th Congress, MOAA will work to improve benefit consistency for all beneficiary groups, especially those under 65, by concentrating on the following improvements.

• Attract more TRICARE providers by increasing Medicare and TRICARE payment rates (TRICARE's rates are tied by law to Medicare's). Under current law, these rates are tied to a flawed formula that reduced payments in 2002 and 2003, with additional cuts projected over the next three years. Such cuts discourage providers from seeing TRICARE and Medicare patients, and they must be reversed.
• Streamline payments to providers through a Web-based claims system. With today's technology, MOAA believes TRICARE providers should be paid electronically within days. Expeditious payments are essential to help overcome past provider resistance to participation in TRICARE.
• Seek better coordination of health and pharmacy benefits for beneficiaries who relocate or travel between TRICARE regions.
• Reduce and ultimately eliminate preauthorization requirements and other hurdles for TRICARE Standard users and providers.
• Eliminate the 115 percent billing limit when TRICARE is second payer to other health insurance. Currently, this limit is often less than the beneficiary's other insurance payments, so TRICARE pays nothing.
• Reinstate TRICARE benefits for remarried widows when the second marriage ends.
• Provide a subsidy for the TRICARE Retiree Dental Plan that will better serve enrollees and encourage more retirees to enroll in the Plan.

Pharmacy issues: Work with the Department of Defense (DoD) and Congress to develop and maintain a comprehensive uniform pharmacy benefit for all beneficiaries with a robust formulary that preserves beneficiary options to obtain specific pharmaceuticals determined necessary by their doctors. Working through our two representatives on the DoD Beneficiary Advisory Panel, MOAA will strive to maximize beneficiary choice, minimize beneficiary costs, and seek educational materials to help beneficiaries and providers understand and use the various TRICARE pharmacy options.

VA-DoD issues: Oppose integration of Department of Veterans Affairs (VA)–DoD health care systems, but support collaboration between the two to increase service and reduce costs for beneficiaries. Preserve continued eligibility of uniformed service retirees for both DoD and VA health care programs. DoD and VA care have different missions and service considerably different populations. MOAA will guard against any new initiative to force retirees to choose one or the other for budgetary reasons. DoD and VA planners must improve their budgeting practices rather than seeking to curtail beneficiary choices. Seek legislation to conduct a Medicare subvention demonstration for VA medical facilities. Support development of a seamless, transferable DoD and VA medical record.

Authorize FEHBP option: Seek legislation authorizing retired servicemembers and their families the option to elect coverage under the Federal Employees' Health Benefits Program (fehbp). With many providers refusing to accept TRICARE Standard, and many other current TRICARE providers refusing to accept new patients, rapid action is essential to restore access for beneficiaries under age 65. One obvious option is to let military beneficiaries participate in fehbp on the same basis as federal civilian employees.

Guard and Reserve health coverage: Extended call-ups of the Guard and Reserve since Sept. 11 continue a trend that reaches back to the Gulf War. Not counting post-Sept. 11 activations, Guard and Reserve forces are contributing directly to operational mission support at a rate that is 13 times greater than during any period of the Cold War (1946–91). One critical consequence of this is disruption of health insurance for Guard and Reserve families. Some steps have been taken, but more needs to be done. MOAA supports access to TRICARE as an option for reservists on a cost-share basis and extending TRICARE coverage to 180 days after deactivation. Other options are needed to help reservists preserve their employer-based health coverage.

Long term care insurance: Seek legislation to let "gray area" Reserve retirees participate in the government's Federal Long Term Care Insurance Program. Current authority covers active duty, Guard, and Reserve personnel and retirees drawing retired pay but not gray area Reserve retirees not yet drawing retired pay because they have not yet reached age 60.

Pretax health premium payments: Authorize the purchase of health care benefits, to include TRICARE Prime enrollment fees and premiums for TRICARE supplemental, long term care, and TRICARE dental insurance, with pretax dollars. Pretax premium payment is already standard in many private and federal benefits packages. Military beneficiaries need the same option.

Medicare Part B penalty relief: End Medicare Part B late enrollment penalties for TFL eligibles. Many older beneficiaries didn't enroll in Part B when first eligible because they were told they would have access to military or VA care. For retirees in foreign countries, Medicare does not provide any coverage. Until Part B enrollment became a prerequisite for TFL, the latter retirees never had a reason to sign up for Part B. Congress should waive Part B late enrollment penalties to allow these beneficiaries access to their earned health benefit without financial penalties.

Retired Pay and Survivor Issues

Concurrent receipt: Work to secure legislation authorizing concurrent receipt of military retired pay and Department of Veterans Affairs (VA) disability compensation. Currently, military retired pay is reduced one dollar for each dollar received in veterans' disability compensation. The fy 2003 Defense Authorization Act contains language allowing a limited "special compensation" for retirees with at least 20 years of active service and a disability associated with a Purple Heart, or 20-plus year retirees with a combat- or operations-related disability rated 60 percent or higher (for more on this provision, see p. 28). MOAA was disappointed that this final legislation fell far short of provisions passed earlier by both the House and Senate and will work to expand the provision and provide for elimination of the disability offset.

Increase SBP age-62 annuity: Raise the minimum age-62 Survivor Benefit Plan (SBP) survivor annuity. Many older SBP participants were not adequately informed about the age-62 offset when they made their SBP election at retirement. In addition, the government's intended subsidy of the SBP program continues to fall, and the age-62 benefit compares poorly with SBP annuities provided to federal civilian survivors. MOAA supports legislation to raise the minimum age-62 annuity incrementally from 35 percent to 55 percent of SBP-covered retired pay.

Paid-up SBP equity: Move up the current 2008 effective date for 30-year paid-up SBP coverage to Oct. 1, 2003. Those who enrolled when SBP was first signed into law will have to pay premiums for up to 36 years before being granted relief from premiums, whereas later enrollees will have a 30-year cutoff. The effective date must be changed to provide equity for the participants with the greatest amount of time enrolled in SBP.

Eliminate SBP-DIC offset: Repeal the law that requires a dollar-for-dollar reduction in SBP benefits for any amount of Dependency and Indemnity Compensation (dic) paid by the VA to survivors of members who died of service-connected causes. Any retiree can purchase SBP, and this coverage should not be subject to reduction. In the case of members whose deaths were service-related, the survivors should receive dic as an added indemnity payment, without reduction of SBP.

USFSPA equity: Modify unfair provisions of the Uniformed Services Former Spouse Protection Act (usfspa). MOAA believes division of retired pay should cease upon the former spouse's remarriage, and divisible retired pay should be based upon the member's grade and years of service at the time of the divorce rather than at the time of the member's retirement from service. Additionally, more protection is needed to ensure that state courts do not divide VA disability compensation, which is the exclusive property of the servicemembers. MOAA will seek a hearing in Congress to explore options for corrective legislation.

COLA commitments: Protect against cost-of-living adjustment (cola) caps, such as those proposed as part of some Social Security reform proposals. Congressional intent, as expressed in the House Armed Services Committee Print of Title 37, usc, is "to provide every military retired member the same purchasing power of the retired pay to which he was entitled at the time of retirement [and ensure it is] not, at any time in the future ... eroded by subsequent increases in consumer prices."

DIC continuation: Seek authority to continue dic for survivors of members who died of service-connected causes when those survivors remarry at age 55 or older. Leaders of both the House and Senate Veterans' Affairs committees have expressed support for such a provision, but legislation has not passed. Continuation of benefits on remarriage is authorized for all other federal survivor programs, including SBP. MOAA believes that surviving spouses receiving dic deserve equal treatment.

Windfall Elimination Provision (WEP) and Government Pension Offset (GPO): Repeal or reform the wep and gpo Social Security penalties for federal employees and spouses (many of whom are military retirees and spouses) under the Civil Service Retirement System and certain state retirement systems. wep reduces Social Security benefits earned by these members and spouses from military service or other employment. The gpo reduces or eliminates the Social Security survivor benefits arising from military service or other employment.

Active and Reserve Force Issues

Operations tempo and manpower: Improve alignment of service force structures with service missions to ease deployment rates and improve quality of life, retention, and readiness. For the past several years, our military forces have been overstressed as a result of end strengths that have not been sufficient to meet mission requirements. The Sept. 11 attack and the subsequent war on terrorism have only intensified this problem. Current operating tempos for today's much smaller forces are even more severe than in previous years and will have adverse consequences on military family life and personnel retention unless relieved very soon. MOAA believes force strengths have been reduced too far to sustain current operations levels and must be increased immediately. Sufficient recruiting and retention resources must be allocated to enable the services to achieve necessary personnel strengths.

Guard and Reserve utilization: Support Department of Defense (DoD) and congressional review of operations tempo for reserve units and personnel and the long-term implications for reserve force readiness. The role of the reserves has evolved considerably over the past decade, to the point where these forces now carry a significant part of the everyday operational workload. Deployments routinely require reserve call-ups far beyond the extent envisioned by most Americans. Increased call-ups, often entailing repeated activation of the same units and people, pose particular difficulties for reserve members, families, and employers. MOAA believes this is a potentially significant problem for the nation that merits a full review of options to ease rising stresses on reserve forces and employers, including a reassessment of active duty versus reserve force requirements, incentives for employers of reservists, and active duty versus reserve force retention dynamics.

Guard and Reserve compensation system: Develop and implement improvements to the Guard and Reserve pay, benefits, and retirement system (including access to government-sponsored health care). The reserve pay and retirement system was developed more than a half century ago at a time when these forces were truly held in reserve. That is no longer true. Increasing demands on Guard and Reserve forces to perform everyday national security missions at home and abroad point to the need to modernize that system so that those willing to serve are properly compensated and encouraged to join and complete their service. The reserve compensation system must reflect the demands of increased reserve service without creating disproportional incentives that could undermine active force retention.

Pay-raise comparability: Accelerate recent progress toward elimination of the 6.5 percent military pay shortfall that still will persist as of January 2003. For most of the past two decades, Congress capped military pay raises below those of the private sector; as a result, the pay gap grew as large as 13.5 percent. Congress has since worked to improve military pay, but four years of effort have closed only about half of the original gap. The fy 2003 Defense Authorization Act provides pay raises between 4.1 percent and 6.5 percent, depending on grade and years of service. While this definitely represents a step in the right direction, continued progress is needed to restore full comparability with private-sector pay. MOAA believes the gap should be erased within four years or less.

Housing allowance increases: Until recently, active duty housing allowances fell nearly 20 percent short of covering average housing costs by grade. Three years ago, Congress embarked on a plan to raise allowances to fully reimburse average housing expenses by 2005. MOAA supports accelerating that schedule to more adequately compensate our overstressed forces, particularly younger families placed at risk by frequent relocations and deployments that disrupt family income.

PCS reimbursements: Raise permanent change-of-station (pcs) reimbursements to offset expenses servicemembers incur during government-ordered relocations. The fy 2002 Defense Authorization Act provided the first update to some of these allowances since 1986, including en route per diem and the maximum daily temporary lodging expense allowance. But pcs reimbursements still fall short in other areas. It's the government's responsibility, not the servicemember's, to pay the cost of military-directed moves.

Homeowner capital gains tax: Give uniformed service homeowners the same capital gains tax exemption other Americans enjoy. Ignore time spent away from the home on government orders when calculating whether the servicemember has met occupancy requirements for exemption from capital gains tax on sale of a home. Current law allows exemption of up to $500,000 in homeowner capital gains per couple, provided the home was occupied as a principal residence for at least two of the five years preceding the sale. Uniformed servicemembers reassigned overseas or otherwise away from their principal residence on government orders should not be forced to pay capital gains taxes for obeying such orders. At the close of the 107th Congress, the House and Senate had reached a compromise that would exempt up to five years spent away from home on military orders from counting against the occupancy requirement. But Congress adjourned before passing the final legislation. MOAA will seek early action on this initiative in 2003.

GI Bill benefits: Support legislation tying the level of Montgomery GI Bill (MGIB) education benefits to the average cost of attending a four-year public college. Facilitate proportional adjustments to Guard and Reserve MGIB programs whenever changes are made to the basic MGIB benefit. Authorize an option for all active duty members not currently eligible for MGIB to elect to participate in that program. Permit reservists called to active duty for more than 12 months to enroll in the active duty MGIB.

Commissary benefits: Protect against privatization efforts or reductions in commissary funding support to ensure retention of this important benefit for all service beneficiaries, including active, reserve, and retired members, families, and survivors. Resist consolidation of commissary and exchange facilities (which has the secondary effect of increasing prices on some commissary items), except as needed to avoid loss of commissary facilities at base realignment and closure locations.

Reserve commissary parity: Support extension of full commissary benefits to members of the Ready Reserve, including "gray area" retirees. Tracking reservists' current compliance with the 24-visit annual limit is expensive and counterproductive. Removing the limit will have no discernible effect on commissaries, save millions in administrative costs, and eliminate the perception that these full members of the Total Force have less than first-class patron status in commissaries.

Inactive duty training (IDT) points: Remove the current cap that bars Selected Reserve personnel from crediting more than 90 inactive duty training points a year toward retirement, even if they actually earned additional points above the cap. All points earned in a 12-month period should be credited for retirement purposes.

Deduction of drill-related expenses: Guard and Reserve members are not reimbursed for drill-related travel and lodging expenses and deserve some relief from subsidizing their own military training. In late 2002, the House and Senate agreed to restore a limited tax deduction for guardmembers and all reservists who incur such costs, but Congress adjourned before passing it. Congress must make this happen in 2003.

Additional Issues

Flag amendment: Support passage of a constitutional amendment allowing Congress to prohibit the physical desecration of the flag of the United States. MOAA believes Congress should pass this amendment, so it may be referred to the states, where the people can decide the issue (requires ratification by at least 38 states).

Repeal Social Security tax increase: Repeal the 1993 legislation that increased from 50 percent to 85 percent the maximum amount of Social Security benefits subject to federal income tax.

Social Security and Medicare reform: Oppose initiatives that disproportionately penalize particular segments of the beneficiary or taxpayer population or fail to protect beneficiaries' income from the ravages of inflation.

Arlington burial rules: In the 107th Congress, the House passed legislation to codify Arlington National Cemetery burial rules, but the Senate did not. Current rules exist in federal regulations, leaving confusion over eligibility for burial in this hallowed heroes' resting place. Congress should remove controversy over waivers by codifying these rules in law.

Veterans' claims: Over the past year, there has been commendable progress in reducing the large Department of Veterans Affairs (VA) claims backlog and making the review system more efficient and effective. This progress must be continued, with additional emphasis on quality control in assessing initial claims and on hiring and training skilled VA claims workers.

Non-Health Care Legislation

FY 2003 Defense Authorization Act

Armed Forces Tax Fairness Act

Health Care Legislation

FY 2003 Defense Authorization Act

Medical Modernization and Prescription Drug Act