Retiree groups wary of TRICARE proposal

Wednesday - 1/12/2011, 1:51pm EST

Jared Serbu, Reporter, Federal News Radio

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By Jared Serbu
Reporter
Federal News Radio

Defense Secretary Robert Gates is likely to face an uphill battle as he pushes a proposal to increase fees for some beneficiaries of the military's TRICARE health insurance system. As in past years, Gates will have to persuade skeptical members of Congress, something he has not managed to do since he began proposing higher fees in 2007.

Additionally, associations that represent military retirees are girding for another fight, though they said in interviews that they are still waiting to see the full details of Gates proposal. The organizations helped to beat back DoD's proposed increases in the last several years' defense appropriations bills, but Secretary Gates made clear last week that he wants to try again to impose "modest" increases on working-age retirees.

"Many of these beneficiaries are employed full-time while receiving their full pensions, and often forgo their employers' health plan to remain with TRICARE," Gates said. "This should not come as a surprise given that the current TRICARE enrollment fee was set in 1995, and has not been raised since."

It's an issue that DoD's individual service chiefs and the Joint Chiefs chairman have spoken about as well, saying the increased personnel costs caused by heath care may pose a future threat to military readiness.

This past summer, now-former Coast Guard commandant Admiral Thad Allen said at a Navy League forum that personnel costs had risen to 66 percent of his service's budget. At that point, he was just about to become a retiree on TRICARE.

"I just signed my TRICARE Prime form. For the entire year for my wife and I, it was only $469. I think at some point we're going to have to come to grips with this," he said.

Allen is entitled to a pension of a little over $182,000 this year, according to the military's pension calculator. He, however, is a retired four-star admiral with nearly 40 years of service. Numbers prepared by the Association of the United States Army say the average military retiree, in that branch at least, is a senior enlisted service member with about 20 years of service. An annual pension at that pay grade is closer to $20,000 in 2011 dollars.

That disparity is one reason that DoD's 2007 task force on military health care recommended a tiered system. The panel suggested that premiums be raised in three bands - one for retirees with pensions of less than $20,000 per year, another between $20,000 and $40,000, and another above $40,000. At the highest band, premiums would have gone up to $1,750 by now, while the lowest band would have paid $900 this year.

DoD asked Congress to institute the Task Force's recommendations in its 2009 budget, but lawmakers declined. Navy Capt. Cathy Beasley (Ret.), who is now with the Military Officers Association of America said she hopes the department doesn't try again.

"Whether you're an E-1 or an O-6 or O-7, you earned the same level of benefit," she said. "The President pays the same FEHB premium as another federal worker lower down in the GS rating. So we don't believe in means testing at all."

Beasley said the income of a military retiree shouldn't matter, nor should the fact that private and civilian sector employees have seen dramatic healthcare premium increases over the last 15 years.

"People in civilian jobs have not had to endure the kinds of duties which we equate to paying for people's premiums up front with this type of service," she said. "Take for instance, anybody who's had a career in the military, the kind of hazardous duty they've had to do. Service in foreign and often hostile environments. Multiple extended forced family separations. Long duty hours without extra pay. Frequent forced relocations. Disruptions of spouses' careers. Those are the kinds of hardships that military folks have had to endure over the course of a 20 or 30 year career, and we think that equates to, if not overcompensates health care premiums up front."

Deirdre Holleman, executive director of The Retired Enlisted Association said a tiered system in which where retirees with lower pensions would pay less than retired generals and admirals would be less painful for her members than an across-the-board increase. But she said any increase would be painful.

"With my guys it would be a real hit," she said. "It really would be. My folks are living very tightly. The healthcare benefits are extremely important to them, and it's something they've earned. It's something that they were promised, it's something that they depended on. Not only do people agree to risk their lives for all these years, but they also take less pay, more moves and miserable conditions."