Pages: 1 2
The specter of the 2010 Patient Protection and Affordable Care Act, aka Obamacare, now hangs over America’s fighting forces. Included in President Obama’s proposed cuts in defense spending is a call for military families and retirees to pay more for their health insurance, even as unionized civilian defense workers’ benefits remain off limits to those same increases. According to U.S. officials, the proposal is reportedly creating a “major rift” within the Pentagon. Why the change? Several congressional aides contend the move is designed to move more soldiers into the state-run health exchanges created by the healthcare bill.
“We shouldn’t ask our military to pay our bills when we aren’t willing to impose a similar hardship on the rest of the population,” said Rep. Howard McKeon (R-CA), chairman of the House Armed Services Committee and a Republican from California, to the Washington Free Beacon. “We can’t keep asking those who have given so much to give that much more.”
Apparently we can. Administration officials acknowledge that the switch from the current Tricare coverage to the state-run exchanges is part of an effort to trim $1.8 billion from the Tricare medical system in the fiscal 2013 budget, and $12.9 billion by 2017. Yet these sums are paltry when compared to the overall effort by this administration to hammer military spending, which is now slated to be reduced by $487 billion over the next ten years without the cuts engendered by the Budget Control Act of 2011. The failure of the Congressional Super Committee to reach a deal “triggered” $1.2 trillion in automatic cuts that may raise that total to more than $1 trillion.
The new plan calls for a “tiered increase” in annual benefit payments based on one’s yearly retirement pay. The Pentagon expects most of the savings to be accrued by targeting under-65 and Medicare-eligible military retirees. The initial increase in payments ranges from 30 percent to 78 percent in Tricare annual premiums for the first year. After that, five-year increases ranging from 94 percent to 345 percent will be imposed, more than tripling the current payment schedules. The Pentagon also will impose an annual fee for a military retiree program called Tricare for Life, which all military retirees must automatically join at age 65. Current enrollees pay the equivalent of a monthly Medicare premium. A new fee will be added on top of that premium.
There are three different tier schedules proposed for Tricare. Tier 1 retirees, with retired pay below $22,590, would see a 71 percent increase in enrollment fees over the next five years, from $520 to $893. Tier 2 retirees, drawing $22,590 to $45,178, would see their fees raised to $1,523 by 2017, nearly triple the current rate. Tier 3, retirees with annuities above $45,178, would pay $2048 by 2017, nearly four times the current fee. Individual coverage in Tiers 2 and 3 also would cost half of family coverage.
As for active duty personnel, they will be faced with increased co-payments for pharmaceuticals. Co-pays for 30 days of brand-name drugs in the retail network would rise from $12 to $34 in fiscal 2017, while co-pays for brand name at mail order, now $9 for a 90-day supply, would also reach $34 by 2017, thus eliminating any incentive to use generics instead of brand name pharmaceuticals. In addition, “third tier” drugs, as in those deemed too expensive to be on the military formulary, would no longer be available at retail outlets unless physicians deemed they were medically necessary.
The cuts reportedly have the unanimous support among “military chiefs,” with Army Gen. Martin Dempsey, chairman of the Joint Chiefs, calling the current fee system, little changed since 1996, “an anachronism” the military no longer can afford. He characterized the fee increases as part of the “tough choices” that must be made to reduce military spending. “I want those of you who serve and who have served to know that we’ve heard your concerns, in particular your concern about the tiered enrollment fee structure for Tricare in retirement,” Dempsey said. “You have our commitment that we will continue to review our health care system to make it as responsive, as affordable, and as equitable as possible.”
An unnamed congressional aide was far less sanguine. “Would you stay with a car insurance company that raised your premiums by 345 percent in five years? Probably not,” the aide contended. “Would anybody accept their taxes being raised 345 percent in five years? Probably not.” Another aide put the cuts in perspective as well. “We all recognize that we are in a time of austerity,” this aide said. “But defense has made up to this point 50 percent of deficit reduction cuts that we agreed to, but is only 20 percent of the budget.”
Pages: 1 2