Legislation targets TRICARE fees
Legislation targets TRICARE fees
The long march to completion of the defense authorization and appropriation legislation has begun.The Fiscal Year 2012 Defense Authorization Bill was approved by the House Armed Services Committee last week by a vote of 60-1. The bill would authorize $553 billion for the Department of Defense (DoD), $18 billion for national security programs at the Energy Department and $118 billion for the wars in Iraq and Afghanistan.While the legislation would allow DoD to increase TRICARE fees for under-65 retirees, it also caps the department’s ability to increase fees in the future.Specifically, the committee allowed DoD to increase the TRICARE Prime enrollment fee by $2.50 a month for individuals (yearly from $230 to $260) and $5 a month for families (yearly from $460 to $520). It also allows DoD to raise retail pharmacy co-pays by $2 or $3, while eliminating the co-pay for generic drugs in the mail-order pharmacy program.However, the committee added a very important statement in the bill which prohibits the Defense Department from proposing substantial annual increases in the future by ensuring the percentage increase may not exceed the percentage increase in military retired pay.AUSA thanks committee Chairman Rep. Buck McKeon, R-Calif., for recognizing that decades of service and sacrifice constitute a very large, pre-paid premium for career service members’ health care in retirement, over and above what they pay in cash.The legislation states: "Career members of the uniformed services and their families endure unique and extraordinary demands and make extraordinary sacrifices over the course of a 20- to 30-year career in protecting freedom for all Americans; and those decades of sacrifice constitute a significant prepaid premium for health care during a career member’s retirement that is over and above what the member pays with money."The DoD proposal would have linked future TRICARE fee increases to the National Health Expenditure index, produced by the Centers for Medicare and Medicaid Services. That index rose just 3.1 percent last year, but has increased by an average of 6.4 percent a year over the past 25 years.In contrast, TRICARE fees would have remained flat this year if linked to retired pay because, for the second year in a row, there was no cost-of-living adjustment for retirees. Historically, the annual cost of living adjustment is about 3 percent.The legislation would also raise retail pharmacy co-pays and eliminate co-pays for home delivery in accordance with DoD’s proposal (see chart below).Another item in the bill would prohibit Medicare-eligible military retirees from enrolling in the U.S. Family Health Plan, a TRICARE option that allows retirees over 65 in certain areas of the country to avoid paying the Medicare Part B premiums that other 65-plus retirees must pay for TRICARE for Life.However, those already enrolled will be allowed to remain in the plan.The Pentagon estimates this will save them $739 million the first year and $3.2 billion over five years because it costs an average of $19,000 a year for Medicare-eligible retirees to use the Family Health Plan. Those retirees using TRICARE for Life costs DoD about $4,500 a year.For many years, AUSA has urged Congress to eliminate the legislative language that requires a Survivor Benefit Plan offset by the amount of the VA Dependents Indemnity Compensation (SBP/DIC). The defense authorization legislation this year again fails to do that but does increase an existing monthly stipend and establishes additional monthly amounts paid under the Special Survivor Indemnity Allowance to surviving spouses or former spouses of deceased service members who are denied the full amount of their annuity under SBP due to the offset required by the receipt of DIC from the VA. It would also extend the termination date for the Special Survivor Annuity Allowance authority from Oct. 1, 2017 to Oct. 1, 2021.This "widows’ tax" has long denied surviving family members the payment of their SBP benefits earned by the service of their spouses and paid for through premium reductions to retired pay. The legislation would provide an incremental step in the continuing effort to eliminate the DIC offset against SBP annuities.It provides the following monthly amounts for the Special Survivor Indemnity Allowance, to include increases through Fiscal Year 2017 and newly established amounts for Fiscal Years 2018 – 2021 (These small amounts are intended as "placeholders" to establish Congress’ intent to continue the program beyond FY 2017, while seeking additional funding sources in the meantime):
- Fiscal Year 2013 from $90 to $163;
- Fiscal Year 2014 from $150 to $200;
- Fiscal Year 2015 from $200 to $215;
- Fiscal Year 2016 from $275 to $282;
- Fiscal Year 2017 from $310 to $314;
- Fiscal Year 2018 set at $9;
- Fiscal Year 2019 set at $15;
- Fiscal Year 2020 set at $20; and,
- Fiscal Year 2021 set at $27.
The full committee’s approval of the defense authorization bill is just one step in the process. It is scheduled to go to the House floor for a full vote in late May. Work on the Senate’s version of the bill is expected to start in June. Then both versions will have to go to conference to iron out differences and get a final bill that can be signed by the president.This process, unfortunately, often drags on into the fall as political maneuvering competes with the necessity of finishing the process before the October beginning of the next fiscal year.While there is no timeline yet, both House and Senate leaders hope to have the defense authorization and appropriations bills completed by the end of the fiscal year on Sept 30.That notwithstanding, based on past performance, it seems unlikely that Congress will have its funding work completed by the end of this fiscal year, but hope, as they say, springs eternal.So there is a long road ahead, but AUSA will be monitoring the process closely and will make our voice heard if the issues our constituents care about are not properly addressed.I always end the column written closest to Memorial Day with the words of AUSA President Gen. Gordon Sullivan that get to the heart of the issue of service: "Reflect on the selfless and loyal service of hundreds of thousands of soldiers each and every day – service marked with honor and courage and exemplary of our values as an Army and as Americans – and remember to thank them and pray for them."