March 2006


March 3, 2006

Along with many other veterans organizations, the Air Force Association (AFA) has objected to several provisions in the President’s fiscal 2007 budget that it says would seriously affect veterans. First is the plan to impose huge increases in Tricare enrollment fees and deductibles for military retirees under age 65. Second would be an increase for Medicare-eligible retirees' co-pays in the Tricare retail pharmacy network. Third would be an annual enrollment fee of $250 and an almost doubling of pharmacy co-payments for veterans in Priority Groups 7 and 8 without service-connected disabilities. AFA chairman Stephen P. Condon, said, "Defense spending currently accounts for approximately four percent of America’s GDP, an insignificant amount historically when compared to past wars.” He said he believes the American people are willing to sacrifice to provide our military with the resources needed to defeat the enemy, if asked (see next two items).

March 3, 2006

Sen. Patty Murray, D-Wash., calls the administration's proposal to hike health care fees and co-pays for military retirees underage 65 “a step backward,” which would balance the budget "on the backs of those who have served us." Sen. Barack Obama, D-Ill., said he does not think Congress will accept the idea. He added that Congress has rejected demands for the last three years to impose a new VA enrollment fee and double prescription drug co-payments for Priority 7 and 8 veterans, and he doesn't see the legislators doing an about face this year. He cautioned that funding for veteran and retiree programs will, however, have to compete against demands by other programs such as Social Security, Medicare and Medicaid. He said that if the problem is not faced in 2007 it will resurface in 2008.

March 3, 2006

Senators Larry Craig, R-Idaho, chairman of the Senate Veterans’ Affairs Committee, and Lindsey Graham, R-S.C., chairman of the Senate Armed Services personnel subcommittee, have endorsed the Bush administration's fiscal 2007 budget that would raise Tricare enrollment fees and co-payments for military retirees under age 65 and raise prescription co-payments for certain veterans (previous item). Graham said that, although the nation owes veterans and retirees "a lot," they should continue to sacrifice by paying the huge increases the administration wants. He added that, although he wasn't budging on the increases, he was willing to consider shifting retiree health care administration from the Defense Department to the Department of Veterans Affairs so that health dollars would not compete with military hardware and personnel costs. He said that, although the idea is controversial, he was throwing it "out there" to wake everybody up.


March 10, 2006


Last week, Defense Secretary Donald Rumsfeld, Joint Chiefs of Staff Chairman Gen. Peter Pace, and Army Chief of Staff Gen. Peter Schoomaker, testified again on the Hill, advocating increases in Tricare fees for retirees under age 65. The services senior enlisted leaders gave mirror testimony. In response, Air Force Sergeants Association Executive Director Richard Dean said: "We as a nation should not unfairly ask those who so greatly sacrificed for 20 years or longer in efforts to provide America's freedoms, to continue to sacrifice until the grave." The Military Officers Association of America said it "rejects Pentagon leaders' disingenuous double-talk about exorbitant fee increases being 'necessary to sustain the current benefit.'" MOAA called it "unconscionable to put the Joint Chiefs and senior enlisted advisors in the position of having to advocate a benefit cut in order to fund weapons programs."

March 17, 2006 

Lawmakers consider seeking review of plans for Tricare fee hike
By Megan Scully, CongressDaily

House Armed Services Personnel Subcommittee Chairman John McHugh, R-N.Y., is considering an independent review of Pentagon plans to raise healthcare premiums and other fees for military retirees under the age of 65.
"My instincts tell me it would probably behoove us to take some kind of dispassionate, third-party view," McHugh said in an interview Thursday. The review, he added, could be conducted by GAO or an outside firm to provide an in-depth look at the proposal, which Pentagon leaders say would save $735 million in fiscal 2007 and $11 billion over the next five years.

Senate Armed Services Personnel Subcommittee Chairman Lindsey Graham, R-S.C., called for a similar review during a hearing Tuesday.

While the fee increases could help offset the military's burgeoning TRICARE healthcare bills, McHugh and other lawmakers are concerned the plan would burden retirees, including veterans returning from Iraq and Afghanistan. "It troubles me somewhat morally," McHugh said.

A strong and vocal coalition of military organizations opposing the plan estimates it could cost some retirees an additional $100 a month. McHugh, who last year was wary of the hefty costs associated with Congress' decision to expand TRICARE benefits, said he recognized the potential for savings in the Pentagon's proposal.

If the defense committees opt to overturn the department's decision, the money might have to come from somewhere else in the defense budget, he said. As a compromise, McHugh said he might favor incremental fee boosts for retirees over the next several years.

Administration officials say TRICARE cost shares and fees have not been adjusted in 11 years, while most other healthcare programs have substantially increased.

House Armed Services Personnel Subcommittee ranking member Vic Snyder, D-Ark., said he had not talked to McHugh about the third-party review but agreed it could be helpful as the committee considers the fiscal 2007 budget request. Like McHugh, he emphasized that the panel must give the matter --including the Pentagon's cost arguments --careful consideration before making a final decision.

This year, the military expects to spend 8 percent of its budget, or $37 billion, on healthcare programs --twice what the department spent five years ago. If premiums and other fees remain unchanged, the military is on track to spend $64 billion on healthcare in fiscal 2015.

Other House lawmakers are attempting to stop the cost hikes outside of the defense appropriations and authorization processes. Earlier this week, Rep. Walter Jones, R-N.C., a House Armed Services member, and House Military Quality of Life Appropriations ranking member Chet Edwards, D-Texas, introduced a bill that would thwart the fiscal 2007 TRICARE proposal.

It also would change current law that allows the Pentagon to alter healthcare fees without the blessing of Capitol Hill. The bill has 77 co-sponsors, including several Republican members of the Armed Services Committee. The Military Officers Association of America, which helped write the House bill, is looking for senators to sponsor similar legislation.

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March 31, 2006

The Defense Department has rescinded its notification to Tricare contractors to begin a plan to double and triple Tricare fees starting Oct. 1 for military retirees under age 65. DoD took the action in the face of vehement opposition from veterans' associations and a growing intensity of bipartisan opposition from Congress. The Republican chairman and the ranking Democrat of the Senate Armed Services personnel subcommittee promised the veterans' groups they would seek an independent audit of the military health care system before deciding whether to support the fee hikes. Meanwhile, in the House, Reps. Chet Edwards, D-Texas, and Walter Jones, R-N.C., sponsored the Military Retirees' Health Care Protection Act, designed to move the purse power from DoD to Congress. The bill had 78 cosponsors as of press time. Defense officials did not indicate they were abandoning the plan. 

March 31, 2006

The Military Offices Association of America has proposed a list of 15 items that could make Tricare more cost-effective, as alternatives to the Defense Department's idea of raising Tricare fees and other medical costs for military retirees under age 65:
  • Make Tricare a second payer to other insurance. 
  • Reduce or eliminate mail-order copayments to encourage use of this lowest-cost pharmacy service.
  • Negotiate with drug manufacturers for discounts at retail pharmacies. 
  • Streamline the electronic claims system. 
  • Educate beneficiaries and providers about the advantages of mail-order pharmacy.
  • Change the law to limit incentives private firms can offer employees to shift to Tricare, or require such matching payments to Tricare.
  • Eliminate DoD-unique administrative requirements that make DoD pay higher overhead fees.
  • Reduce Tricare Reserve Select costs by allowing service members the option of a government subsidy (at costs capped below that of Tricare) of civilian employer premiums during periods of mobilization.
  • Promote programs to offer special care management services to beneficiaries with chronic or unusually expensive conditions.
  • Change the law to mandate federal pricing for the retail pharmacy network (rather than charging beneficiaries more if drug companies don’t).
  • Establish one central DoD facility to order and fill all prescriptions for exceptionally high-cost drugs.
  • Centralize the military treatment facility pharmacy budgeting and funding process, emphasizing accountability and cost-shifting.
  • Increase efficiency via a single contract for all claims processing.
  • Test voluntary participation in Medicare Advantage Regional PPO to foster chronic care improvement and disease management.
  • Size military facilities (least costly care option) to reduce reliance on civilian providers.