Republicans and Democrats alike are signaling a willingness to make military retirees pay more for coverage as a part of Washington’s plans for fiscal austerity. The Pentagon is looking to cut health care costs that have skyrocketed from $19 billion in 2001 to $53 billion.
The Pentagon is providing health care coverage for 3.3 million active duty personnel and their dependents and 5.5 million retirees, eligible dependents and surviving spouses. Retirees outnumber the active duty, 2.3 million to 1.4 million. Defense Secretary Leon Panetta recently said personnel costs have put the Pentagon “on an unsustainable course.”
Veterans groups and retired generals are mobilizing to fight any changes, arguing that Americans who were willing to die for their country should be treated differently than the average worker. The American Legion has sent a letter to every member of the House and Senate asking them to spare health care benefits. The Veterans of Foreign Wars has urged its 2 million members, their families and friends to contact lawmakers and deliver the same message.
Both party leaders on the Senate Armed Services Committee – Carl Levin, D-Mich., and John McCain, R-Ariz. – recommended that the special deficit-cutting supercommittee look at raising enrollment fees and imposing restrictions on the military’s health care program, known as TRICARE. Current military members would be grandfathered in.
McCain and Levin also favored creating a commission to look at military retirement benefits and make recommendations for changes.
“Any changes to TRICARE that put the burden back on the beneficiaries is not supported by the American Legion,” said Peter Gaytan, the group’s executive director. He wondered about future benefits for his 19-year-old nephew who heads to Afghanistan in December.
Sens. Tom Coburn, R-Okla., and Mark Warner, D-Va., members of the Armed Services panel, also expressed their openness to cost-cutting changes to the military’s entitlement program.
“I think we have to look at whether savings can be achieved, but we have to keep our promise to people who were recruited based on those benefits, and we also ought to look at whether there’s ways to improve the benefit structure,” Sen. Susan Collins, R-Maine, said in an interview last week.
That prospect has Joe Davis, a spokesman for the Veterans of Foreign Wars, fearful of the next step.
“All our worries are starting to come to fruition,” Davis said.
The debt deal reached this past summer between President Barack Obama and congressional Republicans set in motion some $450 billion worth of cuts in projected defense spending over 10 years. The Defense Department budget has nearly doubled to $700 billion in the 10 years since the Sept. 11 terror attack. That figure doesn’t include the trillion-plus spent on the wars in Iraq and Afghanistan.
The 12-member, bipartisan supercommittee has a mandate to come up with at least $1.2 trillion in cuts by Nov. 23. If it fails to produce a plan or Congress rejects its proposal, automatic, across-the-board cuts of $1.2 trillion kick in, half of it from defense spending.
Levin and McCain also support an annual enrollment fee for TRICARE for Life, the health care program that now has no fee for participation. President Obama proposed an initial annual fee of $200.
Levin said future increases in fees should be tied to the same index used to determine hikes in the TRICARE Prime program, which has the lowest out-of-pocked expenses.
McCain urged the supercommittee to consider restricting working-age military retirees and their dependents from enrolling in TRICARE Prime. The retirees could still enroll in other TRICARE programs. McCain pointed out that the CBO has estimated that such restrictions could save $111 billion over 10 years. Active-duty personnel would still be enrolled in the program automatically.
In the House, lawmakers are less inclined to make any changes in health care benefits. Rep. Howard “Buck” McKeon, R-Calif., chairman of the House Armed Services Committee, agreed to a slight increase in TRICARE Prime fees for working-age military retirees. The fees had been unchanged for 11 years at $230 a year for an individual and $460 for a family.
Asked about the recommendations from Levin and McCain to the supercommittee, McKeon’s office said the House has already made changes and suggested additional savings come from civilian rather military health care and retirement programs. The House vote to raise the annual TRICARE Prime fees by $2.50 for individuals and $5 for families.