January2, 2004

The Institute of Medicine has created an Internet Web site with information about a variety of military-related health issues. The Web site, at, has separate sections for health care issues affecting veterans of World War II, the Korean War, the Vietnam War and the Gulf War. Other sections list IOM's completed reports and reports in progress, while another area contains studies about chemical and biological agents suspected of causing health problems for service members. Yet another section contains reports and information about deployment health. Part of the National Academy of Sciences, the Institute of Medicine is a nonprofit organization that provides advice on matters of biomedical science.

January2, 2004

Under the original Combat-Related Special Compensation law, effective June 1, 2003, military retirees with 10 percent or more VA disability compensation resulting in a Purple Heart, and those with at least 60 percent disability because of combat or combat-related causes, were eligible for CRSC. By the end of 2003, about 40,000 retirees had applied and some 10,000 of those had been processed. On Jan. 1, 2004, military retirees, including Guard and Reserves, with combat and certain combat-related disabilities rated 10 percent or higher became eligible for expanded CRSC. As many as 200,000 are expected to apply for that program. Processing of new applications for both programs may take as long as six months from the date of submission. Payments will be backdated to June 1, 2003 for original CRSC beneficiaries, and Jan. 1, 2004 for the expanded program. 

January2, 2004

The Defense Department comptroller has issued a draft budget recommendation to jack up military retiree copays from $3 to $10 for generic drugs and from $9 to $20 for brand name drugs. The paper also proposes to begin the same copays for retirees who use military treatment facilities. Furthermore, copays for non-network pharmacies would jump from $20 or 20 percent of the prescription cost to $30 or 20 percent. All services reportedly objected to the plan. According to sources, the plan was actually directed by the administration's Office of Management and Budget. Steve Strobridge, spokesman for the Military Officers Association of America, said: "We find it incredible that, only a couple of years after Congress authorized the Tricare Senior Pharmacy program, the administration is seeking to double and triple retirees' drug copays. It's a shocking insensitivity that we're confident Congress will not go along with."

January 2, 2004
by Tom Philpott

Defense Department officials have defeated a White House budget initiative that would have raised prescription fees for military retirees, their spouses and survivors next October. The plan included imposing first-ever co-payments on retiree prescriptions filled at base pharmacies.

Higher pharmacy fees remain a possibility by October 2005.

The Office of Management and Budget’s plan, which was sent to the Pentagon Dec. 16 as a "draft Program Budget Decision" for fiscal 2005, would have raised fees on retirees and their families. Co-pays under the TRICARE mail order and TRICARE retail benefit would climb to $20, up from $9, for name-brand drugs, and to $10, up from $3, for generic drugs.

Also, the same $20 or $10 fees would be charged retirees using military pharmacies, breaking a long-tradition that all prescriptions filled on base on free to eligible beneficiaries. The OMB plan would have taken effect Oct. 1, 2004.

"The bigger news is it’s not going to happen," said a senior DoD official Dec. 31. "We won’t do anything in [the] ‘05 [budget]. We may study it and look at whether or not we should do something in ‘O6."

Administration sources first alerted the Air Force Sergeants Association to the OMB plan before Christmas. AFSA sounded an alarm with other associations. OMB documents obtained by AFSA said imposing higher drugs co-pays on retirees, their spouses and survivors "could generate significant revenues," from $728.3 million in fiscal 2005 up to $954.7 million by 2009, a five-year defense budget gain of $4.2 billion.

James D. Staton, AFSA’s executive director, warned President Bush in a Dec. 29 letter that the plan would break faith with "those who sacrificed a good portion of their lives for this nation" and sends "an awful signal" to "those currently serving and considering a military career."

Staton warned Bush too that "military veterans and retirees are beginning to waiver in their support of this administration in light of repeated gestures of indifference and disrespect."

Other associations also reacted vigorously and by New Year’s Eve the OMB plan had been withdrawn, at least as part of the 2005 defense budget, which will be delivered to Congress by late January.

"This was one of those ideas that got a little bit ahead of rational-thinking people and is back in the box," said the DoD official. "We said, `Look, we planned to look at this issue in a very deliberate way. Give us that opportunity.’ And that’s where we’re going to come out on it."

Department officials, "at the highest level," he said, agreed "it was not the right thing to do, nor the right time to do it."

Behind the OMB idea is concern that pharmacy costs "are rising everywhere," including in DoD, and co-payments have proven effective in the civilian healthcare industry for controlling costs. While imposing fees for prescriptions on base is controversial, the Defense official said it will remain among options to be weighed in the year ahead.

"That might be a good idea but I haven’t seen the data that tells me it is," the official said. He added, "[W]e clearly need to help guide people to mail order and generic drugs," less costly alternatives. Higher co-pays, he said, "is one way to guide people to that…It’s not about making money. It’s about implementing best business practices. My personal view at this point is that [Military Treatment Facilities] should remain just as they are. But for the many people who shop in the retail market, we ought to incentivize them to use mail order."

The OMB document said proposed $20 and $10 co-pays for military retirees would match fees at VA hospitals. That’s incorrect, unless OMB also plans to order higher fees for VA prescriptions in fiscal 2005. Currently, VA facilities provide drugs at no charge for service-related conditions and charge $7 on other prescriptions.

James E. Lokovic, director of government relations for AFSA, rejected the administration’s notion of applying business strategies to earned benefits.

"Damn it, these people earned it and the government owes them," he said, referring to free lifetime benefits including for drugs on base. "It’s disgusting that they would even float this notion. This government has a debt to [military retirees] and ought to be budgeting for it….You cannot run military benefit programs like a business."

With the start of the TRICARE Senior Pharmacy Program in April 2001, and the rising popularity of the TRICARE retail benefit, DoD drug costs rose from $855 million in 1996 to more than $3 billion in 2002. They are expected to hit $7.6 billion by 2010.

Defense officials still plan soon to unveil a "uniform formulary," perhaps this April when the new TRICARE support contracts take effect. The plan will broaden the list of drugs stocked at base pharmacies and available by mail, but will adopt a new three-tier co-pay scheme to curb growth in the TRICARE retail benefit. Drugs not included in the expanded uniform formulary still would be available in the retail network but at higher "non-formulary" co-pay of $22 for a 30-day supply. Proponents say that’s still below the more than $30 average charged under commercial plans for non-formulary drugs. But service associations view $22 as too high, even for non-formulary drugs, and will fight it, with congressional action if necessary.


by Tom Philpott 
January 9, 2004 

Sen. Mary Landrieu (D.-La.)
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Advocates for military retirees will press Congress this year to enact two more major benefit reforms, one to improve the oft-criticized Survivor Benefit Plan and another to move the government nearer to providing free healthcare to a generation of older retirees.

Neither is expected to be backed by the Bush administration.

The top goal of SBP reform is to end a sharp drop in benefits that surviving spouses see at age 62 when most become eligible for Social Security. SBP annuities that are set at 55 percent of the covered retired pay amount suddenly fall to as low as 35 percent.

Sen. Mary Landrieu (D.-La.) and Rep. Jeff Miller (R-Fla.) introduced S. 401 and H.R. 548, identical bills to phase out the lower tier of the SBP formula so that 55 percent annuities are sustained through old age. The first step of the phase out would occur Oct. 1, 2004, when annuities for older beneficiaries would rise to 40 percent. It would be 45 percent in 2005, 50 percent in 2006 and 55 percent in 2007, thus ending the reduction at 62.

The Military Officers Association of America has made SBP reform a priority, publishing a slick, six-page pamphlet "Fighting for Fairness." MOAA also plans a "mail barrage" on members on the House and Senate budget committees, urging that they create "head room" in the defense budget for SBP reform. That would be nearly $1.3 billion over five years.

MOAA and other proponents make several arguments for the change. One is that many retirees and spouses were unaware of the drop in benefits at 62 when they enrolled in SBP. Also, because retirees are living longer, the government’s share of SBP costs has fallen sharply since SBP began in 1972. A 40-percent government subsidy is down to 17 percent. Raising the subsidy back to 40 percent would go a long way to paying for the age 62 phase out.

Finally, reformers argue that federal civilians see no drop in survivor benefits at 62, although they do pay higher premiums.

Retired Air Force Col. George "Bud" Day, lawyer and war hero, also supports SBP reform. But first he wants Congress to pass HR 3474, the Keep Our Promise to America’s Military Retirees Act.

Introduced by Rep. Chris Van Hollen (D-Md.), the bill would waive Medicare Part B premiums, now $66 a month, for retirees who entered service before June 7, 1956. It also would allow retirees and their dependents to enroll in the Federal Employees Health Benefits Plan (FEHBP), the menu of insurance options for federal civilians. It also would provide drug reimbursement at TRICARE network rates to beneficiaries who do not have access to a pharmacy in the TRICARE retail network.

The Keep Our Promise bill is Day’s sole priority.

"What you need on these issues are rifle shots," he said. "Take an issue to Congress and pound on that until they do it. Then you need to pick up your next issue and pound on that."

For Day, it’s an old battle on new ground. He led a six-year court challenge for older retirees seeking compensation for broken promises of free lifetime healthcare. The legal fight ended last year when the Supreme Court declined to reverse an appellate court’s rejection of the lawsuit. The defeat was far from total, however. While the court challenge progressed, Congress enacted TRICARE for Life and the TRICARE Senior Pharmacy benefit, enormous gains for retirees 65 and older.

Day and the Class Act Group of retirees who rallied around the lawsuit, have turned to Congress, shopping for an advocate and helping Van Hollen draft HR 3474 to make more strides toward free lifetime healthcare.

"It’s a very good bill," said Day in a phone interview. Elderly military retirees, he said, shouldn’t have to pay Part B Medicare premiums. Yet they need to have Part B coverage to use TRICARE for Life.

Day said HR 3474 had more than 100 co-sponsors by early January. He expects his friend, Sen. John McCain (R-Ariz.), and Sen. Tim Johnson (D-S.D.) to introduce a companion bill in the Senate. Day said he will be on Capitol Hill, from his Florida home, at least one week a month this spring, "to make sure guys who vocalize support put their pencil on the paper too."

Waiver of Medicare premiums, the bill’s most expensive feature, will cost about $800 million a year. Day shrugs off rhetoric from lawmakers that rising budget deficits are worrisome and could block new retiree initiatives.

"When it comes to spending, none of them pay attention to that. This Republican Congress is the most spendthrift we have ever had. [The] pork last year was just absolutely astonishing…So whenever anybody mentions [deficits] to me I just say, ‘Oh, cut the horses**t.’"

After HR 3474 passes, Day said, he’ll join the push SBP reform.

CRSC APPLICATIONS DELAYED -- It will be several more weeks before a revised application for Combat-Related Special Compensation, expected before Christmas, will be published and available on the CRSC website at:

An official said the delay is caused by the complex task of writing regulations to guide service CRSC boards in determining whether VA upgrades in disability pay – from retirees being deemed "unemployable" (IU) or eligible for Special Monthly Compensation (SMC) -- were also combat-related upgrades, which could result in higher CRSC.

"It’s a very confusing set of conditions," the official explained.

Meanwhile, the Defense Department has a new official name for the limited Concurrent Receipt plan passed for retirees with 20 or more years of service and disability ratings of 50 percent or higher. Limited CR is now Concurrent Disability Payments, or CDP.

Comments are welcomed. Write to Military Update, P.O. Box 231111, Centreville, Va. 20120-1111, e-mail or visit website at:
About the Author
Syndicated columnist TOM PHILPOTT has covered military affairs for more than 25 years, including six as senior editor of Navy Times. He writes free-lance magazine articles, primarily on defense issues. His work has appeared in Washingtonian, Reader's Digest, and Kiplinger's Personal Finance magazines. His book, Glory Denied, is now available in paperback. To send feedback on MILITARY UPDATE columns, e-mail Tom at

January 9, 2004

VA Expands Health Care Priority
A new directive from the Department of Veterans Affairs provides that all veterans requiring care for a service-connected disability -- regardless of the extent of their injury -- must be scheduled for a primary care evaluation within 30 days of their request for care. If a VA facility is unable to schedule such an appointment, it must arrange for care at another VA facility, at a contract facility, or through a sharing agreement. The directive covers hospitalization and outpatient care, but does not apply to care for medical problems not related to a service-connected disability. However, veterans needing emergency care will be treated immediately. The new provision extends a rule that took effect in October 2002 extending priority access to health care for veterans with disabilities rated at 50 percent or more. For them, it includes care for non-service-connected medical problems.


January 9, 2004

OMB Rejects Retiree Pharmacy Increases, For Now
Reacting to an outcry against a plan by the Office of Management and Budget to more than triple copays for most Tricare drugs and to impose the same fees at military treatment facilities, OMB backed down for the fiscal 2005 budget year. Nevertheless Defense officials have insisted that the idea will be back on the table for fiscal '06 budget planning -- which will occur after the November general election. James D. Staton, Air Force Sergeants Association's executive director, wrote President Bush in a Dec. 29 letter that the plan would break faith with "those who sacrificed a good portion of their lives for this nation and sends "an awful signal to "those currently serving and considering a military career." He added that "military veterans and retirees are beginning to waver in their support of this administration in light of repeated gestures of indifference and disrespect." 

More on OMB's Retiree Drug Scheme
Denying charges that the administration is trying to make money from military retirees with its plan to more than triple pharmacy payments, a Defense official says the idea is just to implement "best business practices" and to "help guide people to mail order and generic drugs." The response of James E. Lokovic, spokesman for the Air Force Sergeants Association, was: "These people earned it and the government owes them. It's disgusting that they would even float this notion." The government has a debt to military retirees, he continued, and ought to be budgeting for it. You cannot run military benefit programs like a business, he concluded. Meanwhile, in a separate initiative, Defense officials plan to establish a uniform formulary around April, which would include a three-tier co-pay plan. Drugs not in the formulary would cost beneficiaries $22 for a 30-day supply.

January 15, 2004

Expect to wait several more weeks before the application forms for expanded Combat-Related Special Compensation hit the street, say officials. The delay stems from difficulty in developing regulations to cover retirees the Veterans Administration has classified as "unemployable" and those eligible for Special Monthly Compensation, since each retiree's situation might or might not be combat-related. Regardless of the delay, payments for approved claims under expanded CRSC will be backdated to Jan. 1, 2004. The deferment gives potential beneficiaries an opportunity to fine-tune their supporting documentation to show that their disabilities are related to combat, military training operations, or instrumentalities of war. When the applications are ready, they will be available on the CRSC website at


January 15, 2004

Military retirees who have been drawing Special Compensation for the Severely Disabled should see their concurrent receipt payments begin automatically Feb. 1. However, other retirees eligible for concurrent receipt because of disabilities rated 50 percent or higher may have to wait as long as several months, according to sources. The payments, when received, will be backdated to Jan. 1, 2004.

School board votes to support VA hospital
By Jennine Zeleznik
The Daily Times

Published January 21, 2004 

The Kerrville school board threw its support behind the veteran’s hospital Tuesday night with a unanimous resolution in support of its acute care facility.

Like many other governing bodies around the county, the school board urged that the Department of Veterans Affairs keep the acute care beds at the Kerrville VA Hospital, and even add 20 more to alleviate overcrowding at the San Antonio facility.

“The closing of the acute-care beds at the Kerrville VA Hospital in no way will provide improved health care to the veterans of the Texas Hill Country,” the resolution read. “When given a choice between Kerrville and Audie Murphy, the veteran will always select Kerrville because of the well trained, dedicated, professional staff and the quality of service provided.”

The resolution — asked for by Ret. General Walter Schellhase, president of the Hill Country Veterans Council — passed unanimously with no discussion by the school board.

“We also have a lot of parents and grandparents who are veterans. This is more of a community resolution,” said Kerrville Independent School District Superintendent Dan Troxell.

School board members also approved a corporate resolution that allows the board president and secretary to negotiate the terms, except the purchase price, of the sale of the Doyle property where the Head Start center now sits.

The board accepted a bid of $175,030 for the property in December.

In other news, board members discussed the many changes that the state Legislature made to education law and approved the first reading of a Texas Association of School Board’s policy guideline to handle the changes.

This past summer, the Legislature enacted into law 420 education-related bills. Highlights included a law that made a teacher’s grade final, subject to review by the school board only if the teacher did not follow established grading policy. Another guided school districts on how to deal with homeless students.

After a rousing chorus of “Happy Birthday” to board member Virginia Graham, board members listened to the campus improvement plans for Starkey and Tally elementary schools.

Both campuses are working to improve parental involvement as well as student performance on state standardized tests.

Starkey faces the challenge of Limited English Proficient students and is working to mainstream those students in its classrooms, Principal Diane Stern said.

The campuses are also working to address bullying at school.

“Bullying is an issue not only for the person who is being bullied but the person who is bullying,” Stern said. 

Her school counselors have been talking to the third-, fourth- and fifth-graders at the school about bullying and have asked parents to be diligent in reporting bullying to school officials.

“Oftentimes bullying happens and we’re not aware of it,” Stern said. “It is sometimes a very sneaky situation.”

Jennine Zeleznik may be reached at


January 23, 2004

Retired Air Force Col. George "Bud" Day, a Medal of Honor holder, says the Keep Our Promises to America's Military Retiree Act is a "rifle shot." The bill, HR-3474, would waive Medicare Part B premiums for retirees who entered service before June 7, 1956, and would allow retirees and their dependents to participate in the Federal Employees Health Benefits program. It also would provide reimbursement for drug payments at Tricare network rates for those without access to a pharmacy in the Tricare retail network. Day said that the bill had more than 100 cosponsors by early January, and he expects to see a companion bill introduced in the Senate. June 7, 1956 is the date that lifetime medical care for retirees and dependents converted from a promise to space available.


January 29, 2004

Beneficiaries of the Tricare Standard military health care plan no longer need to get a nonavailability statement from their military treatment facility before seeking inpatient care at civilian hospitals. The requirement to get prior permission expired Dec. 28 under a provision of the fiscal 2002 National Defense Authorization Act. A nonavailability statement indicates that care is not available from the military facility and authorizes care at a civilian facility. Under an exception in the law, Tricare Standard beneficiaries still must get a nonavailability statement before seeking nonemergency inpatient mental health care services. However, officials said, this applies only to beneficiaries who use Tricare Standard or Extra, who are not Medicare eligible, and who have no other health insurance that is primary to Tricare. DoD does not require preauthorization for Tricare beneficiary inpatient mental health care when Medicare is the primary payer.


HCVC Board Members,

The Kerrville VA Hospital will hold their "National Salute To Hospitalized Veterans" week (Feb 9-14) on Friday, February 13th. All members of the HCVC are invited to attend. The schedule is as follows: Meet in Room #147 @ 9:45 AM, we will be greeted by staff @ 10:00 AM, after greeting staff will escorted for patient visitation and distribution of Valentines, @ 11:30 AM there will be a reception in the Recreation Hall for both visitors and patients.

If you can make this meeting call Mr. Nick Villanueva @ 830-792-2580 and let him know. Last year we had 7 members of the Council. I hope you can all make it this year.

This will be before our next Council meeting. Bill Stacy, Joe Strange, Dan Bacon and Alan Hill do not have e-mail. So, if anyone has contact with them - let them know.

Walter Schellhase