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Budget cuts, retirement benefits, health care issues raise concerns

Wednesday, April 01, 2015

Uncertainty not a good recipe for success. Back in 2011, nationally syndicated columnist William Hamilton wrote a piece on military retirement and the plans to change it.

In his column, Hamilton, who served 20 years on active duty, recalled a conversation he had with his personnel officer shortly after going on active duty about what he could expect from a 20-year career in the military.

The personnel officer told him: "You can expect to live abroad for about 10 years, much of it in disease-ridden, Third World countries you would never ever want to visit or vacation at. You will be moved 15 to 20 times. You can expect your household goods to be lost at least once. Off and on, you can expect to be separated from your wife and family for about six years. You can expect to be wounded at least once. Or killed. But that only happens once."

Not much has changed with respect to military life since Hamilton wrote his column. If anything, it has become even more complicated because of the fallout of sequestration, downsizing, and the seemingly constant attacks on military pay and compensation.

AUSA’s leadership is carefully studying the proposals released by the Military Compensation and Retirement Modernization Commission, and the proposals contained in the president’s budget request for 2016.

Keeping in mind that DoD’s review and Congress’ debate on the merits of the proposals is still in the early stages, AUSA’s President Gen. Gordon R. Sullivan, USA, Ret., is struck by the uncertainty caused by the message that is being sent to our military and their families.

The demand for land forces, especially U.S. Army forces, seems to grow every day. At the same time, military service member compensation and benefits continues to be squeezed.

The subliminal message that the troops "cost too much" and that they, by their mere presence, are somehow contributing to an Army that is increasingly unready to meet the complex challenges the United States faces, is creating a level of uncertainty.

That uncertainty and concern about the future of retirement benefits and pensions has many wondering whether it is still worth staying in the service for a full career or leaving early (after the military has invested in training and education to the tune of up to $600,000 per soldier over their first 10 years of service).

With no clearly identified bottom for the Army’s end-strength reductions, soldiers and their families are living under the constant specter of involuntary separations and early retirements.

This is extremely discomfiting for a generation of soldiers who voluntarily signed up to serve their country and to make the military their lifelong career.

The bottom line: Clearly, pay and other compensation and benefits can always be refined. But this should not be the first place to look for savings, it should be the last.

If we are not careful, the soldiers who depart our ranks today – voluntarily or involuntarily – will be the leaders missing when we next need them.

Is the compensation package military personnel receive after they complete their careers rich?

You better believe it. It should be.

If it is such an easy, undemanding career, then why do only less than 1 percent of the population sign up for it?

Top enlisted leaders to Congress: Budgets ‘cut to the bone.’ In a hearing before the House Military Construction and Veterans’ Affairs Appropriations Subcommittee, the services’ top enlisted leaders said that service budgets have been "cut to the bone" by limits imposed by sequestration.

"We may have to tell good soldiers to go home," said Sergeant Major of the Army Dan Dailey.

His counterpart in the Air Force agreed. "Thirty years ago, if you were a good airman and worked hard, you could serve for 20 years. I’m not sure you can say the same today," said Chief Master Sergeant of the Air Force James Cody, who added that budget uncertainty "is curtailing the ability to serve."

The leaders told the panel members that they are concerned about the growing anxiety among troops about what continuing budget threats will mean to their readiness, pay and career options.

The leaders also said that service members are increasingly worried about changes in benefits such as health care and family programs.

"In my four deployments … never once did a soldier say, ‘I’m worried about my family.’ I’m concerned that someday that will be an issue," Dailey told the lawmakers.

While many in Congress have expressed their concern about the effects sequestration is having on the Defense Department, they have not been able to find a permanent solution.

Army officials already have said they’ll have to trim their service’s ranks to about 420,000 soldiers – if not less – by the end of the decade if the sequestration cuts aren’t repealed.

In addition to the dire warnings from defense leaders of the consequences of sequestration, military personnel are also hearing about sweeping changes to pay, compensation, health care and retirement packages contained in the president’s budget request for fiscal 2016 and the recently released report from the Military Compensation and Retirement Modernization Commission.

None of the leaders provided their specific views on the reforms proposed by the commission, but did stress that the quality of family programs – especially health care – can sway a service member’s decision to stay in or leave the military.

The bottom line: As long as leaders keep saying military personnel are too expensive, morale will continue to drop.

Changes ahead for military healthcare? Members of the Military Compensation and Retirement Modernization Commission (MCRMC) recently outlined proposals that would make sweeping changes to the military’s TRICARE health care system.

Testifying before the Senate Armed Services Personnel Subcommittee, Commission Chairman Alphonso Maldon Jr., said that while a high-quality health benefit is essential for all military constituencies, the current TRICARE program is "beset by several structural problems that hinder its ability to provide the best health benefit to active duty families, reserve component members, or retirees. It has weak health care networks because it reimburses providers at Medicare rates or lower. It limits access to care with a frustrating referral process."

Among the Commission recommendations are those that would:

Continue to provide health care to active duty service members through their units or military treatment facilities to ensure the services maintain control of medical readiness of the force.

Establish a new DoD health program to offer a selection of commercial insurance plans to active duty family members, members of the reserve components and families, non-Medicare eligible retirees and families, survivors and certain former spouses.

Provide active duty family members with a Basic Allowance for Health Care (BAHC) to fund insurance premiums and expected out-of-pocket costs. BAHC would be based on the costs of median plans available in the family’s location, plus average out-of-pocket costs.

Establish a program to assist active duty families that struggle with high-cost chronic condition(s) until they reach catastrophic cap of their selected insurance plan.

Allow reserve component members to purchase a plan from the DoD program at varying cost shares.

Reduce cost share for selected reserves to 25 percent to encourage health and dental readiness and streamline mobilization of personnel.

Allow mobilized reserve component members to receive BAHC for dependents, select a DoD plan or apply BAHC to a current (civilian) plan.

Increase cost contributions for non- Medicare eligible retirees by 1 percent annually over 15 years.

Following the MCRMC witnesses, a panel of leaders from several of AUSA’s counterparts in The Military Coalition outlined their positions on the proposed changes.

All acknowledged that there are problems with the current TRICARE system; however, they cautioned against completely overhauling the system without thoughtful and careful consideration.

AUSA strongly agrees with this approach and will not support the changes without specific details and the second and third order effects.

We also agree with one of the Association leaders who said, "Service members, whether in garrison, down range, or anywhere in the world, should not have to worry if they have selected the appropriate health care coverage for their families."

We, along with our coalition counterparts, are particularly concerned about the potential premiums working-age retirees will pay.

A 20-percent premium cost share for retirees is too high, regardless of the length of the phase-in period.

The bottom line: Subcommittee Chairman Sen. Lindsey Graham, R-S.C., said, "Change is coming." What that change will be is a long way from being known.

Graham also acknowledged that under-65 retirees would be the hardest hit under the MCRMC’s plan. He said that if he couldn’t look those retirees in the eye and tell them they were getting a better benefit for their money, he wouldn’t go along with the plan.

We will continue to follow developments closely and will take immediate action as needed.