Can’t Pay for the War? Take the Money from the Military Retirees
The Department of Defense is feeling the pinch of the increasing cost of health care, so the solution is to drive as many retirees who were promised life-time heath care (OK, an entitlement) out of the system as possible by making those that remain pay over triple their current costs.
Defense Department officials have drafted plans to raise TriCare enrollment fees and deductibles sharply over the next three years for military retirees under age 65 and their families – about 3 million beneficiaries in all.
If the changes touted by senior defense officials are adopted, annual enrollment fees for TriCare Prime, the military’s managed-care option, would triple by October 2008 for working-age [ed – anyone under Medicare age] retired officers and double for enlisted retirees.
Yearly deductibles for retirees using TriCare Standard, the fee-for-service health insurance option, would double for officers and rise by a third for enlisted. Also, for the first-time retirees who use TriCare Standard would pay an enrollment fee in addition to their deductible. [ed- which would also increase]
The aim of these initiatives is to slow the projected rise in military health care costs by as much as $12 billion over five years and $32 billion through fiscal 2015. This would occur, proponents argue, by having working-age retirees pay a greater share of TriCare costs and by encouraging others to switch to their employer-provided health insurance.
I believe that means they will be more encouraged to get a job with top health benefits, rather than a job they like with lower health benefits. All this really does is shift the total cost out of the DoD’s budget into another government agency’s, since all you are doing is shifting who works where (and will end up with more uninsured on the public dole). And for those that actually are fully retired and living in a low cost area, tough, go get a job at Walmart to pay your new premiums.
One assumption being used to estimate cost savings is that for every 10 percent increase in out-of-pocket costs, the number of beneficiaries using TriCare Prime or Standard will fall by 1 percent. If accurate, 600,000 beneficiaries would drop out of TriCare plans by 2015.
So a few “Beltway Bandit” companies (cough, cough, Dxxxxxorp? Just a guess) are reducing their expenses and lowering their bids by encouraging retired military employees to opt out of their company’s health care for a bonus (the ONLY place this strategy makes sense in with a government-support employers that hire lots of retired military – and may support other Departments than DoD). So all we have here is smoke-and-mirrors, as the choices are military health care, or higher contractor bids if they have to pay for said health care. But DC politics being what it is, that answer is “we reigned in military health care,” despite final government expenditures being equal. It is a different pot of money, so it doesn’t matter to the bean counters; like military health care costs are independent of other health care costs in the USA.
Bryan Whitman, deputy assistant secretary of defense for public affairs, said defense health care spending, if left unchecked, could reach $64 billion by 2015, or 12 percent of total defense spending, endangering a prized benefit. In fiscal 1995, he said, health care was only five percent of the defense budget.
And exactly how does this differ from the CEO of Starbucks testifying this past summer before Congress about his out of control health care budget? Apparently DoD expects their health care expenses to be different than the rest of the country. The logic here apparently is that to save a Ã¢€œprized benefit,Ã¢€ we must kill it for the retirees alone, though an equal expense is the active duty and their families. Basically massively raise taxes, but it isn’t a “tax,” it is a fee, so we really haven’t raised taxes. The DASD for PA (= talking head) is talking doublespeak here. I also wonder what the war injury expense has been, and its impact on the military medicine budget.
Related, the Administration recently got great press coverage over providing health care coverage to the Guard and Reserve who have been called up. Guess what, it wasn’t properly budgeted for either.
The Defense Department has announced its intent to impose an 8.5% premium increase for TRICARE Reserve Select (TRS), the new healthcare option for drilling members of the Guard and Reserve. This increase – imposed even though the program has been offered only for a few months – is almost triple the percentage of the troops’ 2006 pay raise (3.1%). Monthly TRS premiums will rise from $75 to $81 for single members and $233 to $253 for family plans.
As the Military Offer’s Association of America (MOAA, formerly TROA) states
Guard, reserve and retired families “already gave” to their country in a multitude of ways that civilians haven’t and never will. If we’re at all concerned about future recruiting, retention and readiness, we’d best not forget that.
A country that can afford billions for pork, billions to rebuild Iraq, and still cut billions in taxes every year can afford the cost of health coverage for military members and families who spent decades sacrificing their own freedoms to protect freedom for the rest of America.
Full specifics of the proposal are on the MOAA site (pdf)
In summary (three year increase 2006-2009):
Single Retired Officer $230/year to $750/year
Married Retired Officer $460 to $1500
Single Retired Enlisted $230 to $450
Married Retired Enlisted $460 to $900
This proposal basically guts the promise that was made regarding health care coverage in numerous recruiting promises and contracts (resulting in court cases like occurred in the Tricare-for-Life fiasco?).
Oh, and if you want the military as a fall back option, if your other insurance doesn’t cover you, you have to pay for that too (Tricare Standard, now considered a retired military benefit). Another broken promise. You maxed out your employer’s health care? Tough, you canÃ¢€™t get military medical.
This will probably in retrospect be considered an incredibly bone-headed proposal by the Defense Department (and proposals like this are instigated by the political appointees in the DoD). We care about the soldiers, until they retire, then we renege on decades old promises. This has the potential of being a major gaffe, with lots of sound bites about throwing away old soldiers and sailors.
I don’t think that has any chance of being approved, so the question becomes why is it being proposed? The money involved is orders of magnitude below the Medicare Prescription Benefit, and the political consequences are so great. There has to be another agenda here I do not see (or maybe they really are being that dumb; having worked in DC I understand that).
[Full Disclosure: I am on Tricare Prime, and have no other health care. My health care expenses will go up a minimum of 325%, well above the rate of health care inflation).]