Senators concerned over TRICARE fee increases

Thursday - 3/29/2012, 8:56am EDT

Jared Serbu, DoD reporter, Federal News Radio

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By Jared Serbu and Jolie Lee
Federal News Radio

The Pentagon is telling lawmakers that military retirees' share of health care costs is going to have to increase if it's going to meet the budget targets Congress and the President handed over with last year's Budget Control Act.

Defense officials testified Wednesday before the Senate Armed Services Subcommittee on Personnel.

The TRICARE benefit has been one of the "most comprehensive and generous health benefits in this country, and our proposals keep it that way," testified Jonathan Woodson, assistant secretary of defense for health affairs and director of TRICARE Management Activity.

When TRICARE started in 1996, military retirees paid 26 percent of overall health costs. In 2012, that percentage has dropped to 10 percent. The Defense Department is proposing the beneficiaries' share increase to 14 percent by 2017, Woodson said.

Robert Hale, DoD's comptroller, warned that avoiding this increase could mean less palatable cuts elsewhere.

"If, for example, Congress turned down all of our compensation proposals and we offset that hole with additional force cuts, we could have to cut roughly another 60,000 troops by 2017...These additional cuts will surely jeopardize the new defense strategy that we have recently put in play," Hale said.

Sen. Jim Webb (D-Va.) said increasing TRICARE fees would translate into a broken promise to military retirees.

"This is an obligation that's been made for people whose military careers are now done. We're talking about an obligation that's made to people to ... provide their medical care for the rest of their life based on a compensation package that begins the day they enlist and is amortized over the rest of their life," Webb said.

The increases "aren't trivial" for some retirees, said Sen. Kelly Ayotte (R-N.H.). Those who receive $22,000 to $45,000 a year could see their annual fees increase from $500 to $1,500 in just a few years, she said.

"I think we have a duty, given what our servicemen and women have done, to really have some hard discussion about this, and I'm really concerned about this," Ayotte said.

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