Air Force preparing for hikes in health care costs

Monday - 10/18/2010, 7:04am EDT

WFED's Scott Carr

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By Scott Carr
Reporter
Federal News Radio

The Pentagon is trying to lessen the impact of future rates hikes for the health care for military servicemen and women.

Air Force Chief of Staff General Norton Schwartz became the latest senior official to discuss the coming changes. Schwartz's comments follow Defense Secretary Robert Gates proposal to raise premiums in September. Premiums have not been increased since 1985.

Schwartz said during a speech at the National Press Club that changes in the military health care system "need to be addressed." Healthcare, he said, is about a $40 billion annual effort for the Department of Defense, and is expected to rise to somewhere between $60 billion and $65 billion by 2015.

"That is serious money….between 12, 13, or 14-percent of the entire defense budget," Schwartz said. He called it "inescapable" that a change will have to be made, and warned that if the department is not careful, the "unbounded costs" of healthcare might force out military content elsewhere in the Defense portfolio. "That is worrisome," he said.

Schwartz also weighed in on Gates' plan to shift $100-billion in the defense budget from overhead to combat capabilities over the next five years. The Air Force is working with a budget target of about $28 billion. A review of programs is underway now and will continue into the early part of 2011, he said.

Schwartz said the Air Force wants to move to more multi-year procurements, but only if there is the prospect for long-term procurements and budget stability is assured.

Moreover, Schwartz said, some of the broader problems the military will face may be resolved by the new air-sea battle plan. That plan integrates the capabilities of the Air Force and Navy, providing efficiencies in rapid deployment, a reduction in the duplication of missions and combined acquisition.

VIDEO: Watch highlights of Schwartz's speech at the National Press Club.

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