Tricare fee hike assailed

Since 03-22-06

Critics urge key senators to wait for military health system audit

By Rick Maze
NavyTimes staff writer
March 27, 2006 Issue

With military advocacy groups warning of dire effects on military morale if the Pentagon proceeds with plans to charge substantially higher Tricare fees for working-age retirees, Congress is scrambling to find a way to block the proposals for at least a year.

Leaders of the Senate Armed Services military personnel subcommittee pledged March 14 that they would not approve fee increases until an independent audit of the entire military health-care system is done, along with a thorough review of alternatives to raising beneficiary costs.

Earlier, the chairman and the ranking Democrat of the House Armed Services Committee also announced their opposition to fee increases until other options were considered.

Sen. Lindsey Graham, R-S.C., chairman of the Senate personnel subcommittee, cautioned that this could be a case of delaying the inevitable. While Graham said the two-year fee hike of as much as 115 percent is excessive and unlikely to win approval, he also said the Defense Department must do something to manage rising costs.

“Erosion of benefits is coming,” he said. “The question is whether we have a hard landing or a soft landing.”

Graham vowed “to try to find some way to deal with this. I am not going to pass this on to another generation of senators.”

Pressed by military associations to block or at least severely limit fee increases, Graham and the panel’s ranking Democrat, Sen. Ben Nelson of Nebraska, said an independent audit of the military health-care system and a review of options for cutting health-care costs were warranted before asking beneficiaries to pay more.

“Every dollar you can squeeze is a dollar that doesn’t have to come out of the operating budget or out of your pocket,” Graham told representatives of military associations.

Aides said Graham and Nelson appeared to be leaning toward supporting modest fee increases as part of the 2007 budget before the hearing but changed their opinion after hearing from the associations. The Military Officers Association of America provided a list of 16 ways to cut medical costs without fee hikes. Graham and Nelson said they would seek Pentagon comment on the proposals.

Tanna Schmidli, chairwoman and CEO of the National Military Family Association, said her group is willing to accept modest fee increases for Tricare Prime coverage but finds enrollment fees for Tricare Standard unacceptable because someone who does not pay the fee would have no military health coverage.

Tricare Prime increases, if needed, should not exceed retiree cost-of-living increases, Schmidli said. Since there has been no increase in the Prime enrollment fee in 10 years, Schmidli said she was willing to have it adjusted to make up for the cumulative 31.4 percent increase in retired pay since 1995, with future increases tied to the annual retirement pay adjustment.

Similarly, Dennis McCarthy, executive director of the Reserve Officers Association and a retired Marine lieutenant general, said he will not automatically oppose all fee increases because health- care costs “must be brought back into alignment. Some cost will have to be borne by retirees and families of service members, both active and reserve.”

But McCarthy said increases should not be abrupt. He also said he believes that Tricare Standard should have no enrollment fee but could have a small, one-time “administrative” fee, and that reservists should not pay substantially higher premiums than retirees.

Differing opinions

Other military associations, however, ceded no ground to the Pentagon initiative.

Retired Vice Adm. Norbert Ryan Jr., head of the MOAA, said the increases are “inappropriate and disproportionate” and “will just anger the troops.” At a minimum, he said, fee hikes need to be put off at least a year while the Defense Department is ordered to explore cost-cutting measures and the Government Accountability Office reviews the health-care program.

Two House members, Reps. Chet Edwards, D-Texas., and Walter Jones, R-N.C., introduced a bill March 15 that would do exactly what Ryan suggested. The Military Retirees’ Healthcare Protection Act would block any fee increases unless specifically approved by Congress.

Edgar M. Zerr, a retired Navy chief yeoman and the Fleet Reserve Association’s national president, said that while fee increases might apply only to military retirees under age 65, the effect is wider.

“This also is a morale issue in senior enlisted ranks,” he said, because service members think of health care as a future retirement benefit. “They are aware of the government’s failures to honor past commitments and sensitive to threats to their retiree benefits.”

Rejecting the Pentagon plan would create a $785 million hole in the 2007 defense budget.

That is the amount the Pentagon plans to save from a combination of higher fees and the fact that many retirees and their families would drop military health coverage.

“If we don’t go along with the administration plan — and I think it is clear we don’t plan on going along — we have to make up the assumed savings,” said an aide on the Senate Armed Services Committee.

“That isn’t easy. Even in a $500 billion budget, $785 million is a lot of money.”
----------------------------------------------------------------
Contributed,
YNCS Don Harribine, USN(ret)