When Congress authorized TRICARE For Life (TFL) five years ago, the new law specified that TFL should be paid for through a special trust fund, set up specifically to ensure that money would always be available to keep the government’s health care commitment to older military retirees and their families.

The law specified that all expenses for Medicare-eligibles’ health care would come from that fund. It also specified that there would be two sources of annual deposits into the trust fund: the Department of the Treasury and DoD.

The law made the Treasury responsible for depositing an amount every year as needed to pay for the current and future care of servicemembers who already were retired at the time the fund was established. In essence, it directed the DoD actuary to project the total cost of providing care for that group of people for the rest of their lives (adjusting for projected mortality, inflation, etcetera), turn that amount into a kind of health cost “mortgage,” and make payments into the trust fund every year in an amount sufficient to pay off that mortgage over the next 70 years.

It made DoD responsible for another deposit into the fund. That deposit would provide funding to pay future TFL benefits for today’s active duty members and their family members 20 to 45 years downstream once they attain age 65 and become Medicare-eligible — just as a parent puts away money today for a young child’s future college education.

DoD gasped when the actuaries figured out that its share of the bill would be $7 billion or $8 billion a year in the original estimates. It wasn’t long before Pentagon leaders began complaining to legislators that the administration wasn’t allocating them enough money to pay that additional bill. In so many words, they claimed that funding the TFL trust fund deposit forced them to take money from weapons programs and other defense needs.

The armed services committees didn’t consider that a good answer. They passed the TFL requirement (which the Joint Chiefs supported at the time), and they saw it as the administration’s obligation to budget money to pay for it — and also budget enough money for other Defense needs. The committees didn’t intend for the Pentagon to rob other programs to pay for health care.

So the armed services committees changed the TFL funding law. The FY 2005 Defense Authorization Act directed the U.S. Treasury to assume full responsibility for making all annual TFL trust deposits. Problem solved, wouldn’t you think? You’d be wrong.

White House budget officials put the deposit in the Treasury line but continued to charge it against the Defense budget, in blatant disregard for the clear intent of the law. And Defense officials continue to cite the burden of the rising TFL deposit as a primary reason for their efforts to shift more health costs onto beneficiaries.

House Armed Services Committee leaders share MOAA’s anger at what amounts to a conscious decision to flout the law and use health costs as an excuse to underfund national defense needs. So they’ve put a new provision in their version of the FY 2007 Defense Authorization Bill, passed by the House in May, to “restate and clarify Congressional intent … that no annual [TFL] accrual payment … be charged, credited, or classified in any budget formulation, budget functional classification or scoring of … spending against the Department of Defense.” Accompanying report language noted, “The committee takes this action because budget requests since the enactment of [the TFL law] have not complied with Congressional intent.”

Col. Steve Strobridge, USAF-Ret., director of MOAA government relations