Tricare cost increase gets cold reception in Senate

A proposal to increase out-of-pocket costs for military veterans’ medical care was roundly criticized in a Senate committee hearing this week. If passed, it would be the first time that veterans who retired after at least 20 years of military service would have to pay an annual fee for their health care.

The Senate Armed Services subcommittee on personnel heard from officials within the Defense Department on the future of troops and veterans in light of the looming requirement to reduce military spending by $487 billion in 10 years under the Budget Control Act.

The Pentagon-backed plan is part of a proposed $32.5 billion Defense Programs budget, a little over six percent of the total $525 billion requested by the department for fiscal 2013. Though lawmakers have taken issue with a number of the scaled-back figures in the budget since it was introduced, Defense Secretary Leon Panetta has defended the proposal, calling it an appropriate shift following a decade at war. Congress must approve the budget before it can take effect.

Robert Hale, comptroller for the Defense Department, said military pay and benefits would have to change to accommodate the budget squeeze, though he did offer some assurances.
“The military pay and compensation system must uniquely recognize the stress of military life,” he said. “No one’s pay can be cut. Growth can be slowed, but no pay cuts; no freezes.”

Less encouraging: a plan presented by Jonathan Woodson, director of the military’s health insurance provider Tricare, showing that that medical copays had to increase for veterans for the second year in a row.

The eventual goal, he said, was to rebalance the cost share among Tricare tiers so that veterans were paying an average of 14 percent out-of-pocket costs for their care. Among his proposals was a graduated increase in enrollment fees through 2017 that would increase the annual cost to some families by over $1,000 in that timeframe, and the introduction of annual enrollment fees for elderly veterans and those who have retired from the military with honor.
Sen. Kelly Ayotte (R-NH) complained about being asked to approve cost increases for the second year in a row, bristling when panel members said the plan remained inexpensive when compared with civilian healthcare options.

“With all respect to the private sector, they do not endure what our soldiers do in battle,” she said. “We could find a way to (avoid increases) if we’re willing to take on entitlements, if we’re willing to take on the rest of the budget.”

The proposal would be historic in that it would require veterans who retired after at least 20 years of military service to pay an annual fee for their health care. Troops who embark on a full military career were previously promised full lifetime benefits upon retirement with Tricare.

Sen. Jim Webb (D-VA), a decorated Marine Corps veteran, also pressed the panel.

“I have said many times that I believe, whether there is a specific contractual obligation or not, when someone has served a full military career, we have to provide them lifetime medical care. Do you agree? That kind of defines the struggle we’re all having here.”

Panelists hedged.

Jo Ann Rooney, Acting Under Secretary of Defense for Personnel and Readiness, said the obligation should be met “to the best of our ability,” while Woodson said veterans required health care that was “very generous and reflects their sacrifice and service.”

A number of prominent veterans organizations have lobbied in opposition to Tricare fee increases, saying added financial burden would be crippling to many, particularly the elderly.
Representatives from the Military Officers Association of America visited the Hill last week to testify in opposition to the fee hikes.

The budget introduced by Rep. Paul Ryan earlier this month, expected to get a House vote as early as Thursday, might spell a reprieve from fee increases. Ryan’s plan would restore $214 billion, or half of proposed cuts to the defense budget, by cutting back on other spending and entitlement programs.