Report: TRICARE changes should focus on maximizing value

Thursday - 10/20/2011, 9:45am EDT

By Jack Moore
Federal News Radio

The 2013 defense budget is highly vulnerable to the final decision — or indecision — of the bipartisan Congressional supercommittee, Todd Harrison and Evan Braden Montgomery write in a new Center for Strategic and Budgetary assessments analysis, "Changing the Business of Defense."

If the panel is unable to come up with a plan to cut $1.5 trillion from the deficit and across-the-board cuts are imposed, DoD could see its base budget slashed from $524 billion to $472 billion, according to their analysis.

DoD faces difficult choices in organizing its budget, the authors write. But as a matter of first resort, it should examine how it does business to become more efficient — and that includes making changes to military pay and benefits.

However, the authors of the analysis say the Pentagon should not focus only on cutting but on maximizing the value of the $181 billion spent on military pay and benefits.

For example, in terms of numbers, TRICARE for Life will benefit a relatively small number of retired military personnel, as more than 80 percent of service members won't stay in the service for the required 20 years to qualify for the program. Nevertheless, DoD must set aside more than $5,000 annually for each potential participant.

Instead DoD should focus on "preference-based benefits optimization," Harrison and Montgomery write.

"Instead of using a one-size-fits-all approach, options could be developed that allow service members to choose among benefits to improve their perceived value while reducing costs," according to the report.

The goal to this step is better determining what service members actually want in a benefits package, the authors write.

This approach has worked successfully in the private sector, they add. And even relatively small annual savings spread across 1.5 million active-duty troops could result in $60 billion saved over 10 years, "without cutting end strength or reducing service member satisfaction with their compensation and benefits," they write.

Finally, the authors call for "BRAC-like commission" to study military pay and benefits and make recommendations for improving value.

RELATED STORIES:

VFW urges members to fight TRICARE changes

What will deficit-reduction TRICARE provisions mean for military?

HASC leaders at odds over TRICARE hike