Tagged: military health care

Cuts are coming to TRICARE

Posted by Jason Van Steenwyk

money on chopping blockHealth care for military personnel and their dependents is a major line item in the Pentagon’s budget. Unless we take action to rein in expenditures, military health care costs will reach $65 billion per year – and TRICARE will cover some 9.6 million active duty troops, reservists and retirees.

And with sequestration looming, and budget cutbacks coming without a commensurate rollback in American military objectives and missions, it stands to reason that federal outlays for military health care are a tempting target for budget officials under the gun. Unless Congress intervenes, sequestration will kick in, and slash $54 billion from the Pentagon’s budget in fiscal year 2013.

It’s an easy sell to bureaucrats: Military health care expenditures don’t kill terrorists, or deter the Chinese and North Koreans from military aggression. At least not directly. It doesn’t even make for attractive recruiting posters.

But it’s not an easy sell to military families, nor to the American people. An early trial balloon proposal to increase TRICARE premiums was floated by the Obama Administration early in the President’s term. It was a political non-starter.

It is less so during a campaign year.

As it stands now, military health care programs are very much on the chopping block. Yes, military personnel programs are not subject to the 10 percent across-the-board bloodletting that other parts of the budget are subject to. So base pay and allowances won’t be immediately affected (unless Congress cuts them to avoid sequestration!)

But TRICARE doesn’t fall under the military’s personnel budget. Instead, military health care falls under the Pentagon’s operations budget. So unless officials can find enough waste, fraud and abuse in the system to offset the costs, something has to give. (And if it were that easy to find and eliminate waste, fraud and abuse, we’d already be doing it!).

Over the next five years or so, the fiscal situation confronting military planners is dire. According to reporting from the Army Times, the chief Defense comptroller – the bean-counter-in-chief at the Pentagon – we’re looking at about a $3 billion cut in military health care benefits.

Logically, the difference can be made up by reducing outlays for military health care, transferring money from elsewhere in the budget, or by increasing premiums for TRICARE benefits, or some combination of the three.

For his part, Republican presidential candidate Mitt Romney has already pledged not to raise TRICARE premiums if he is elected. He made this public commitment last week at a speech to members of the American Legion.

That sounds good to military families. But whenever a candidate rules something out, he narrows his options. As it stands now, it’s unlikely that we will find $3 billion to plug the gap from elsewhere in the Pentagon budget within the next year. A good round of base closings will help. But base closings are furiously opposed by individual Congressional representatives. Military health care expenditures, considered broadly, do not have that constituency in Congress to protect them. Previous Administrations have attempted to save money in the defense budget by closing bases – only to be shut down by Congress.

The option that’s left to Romney is to slash expenditures – most likely largely on reimbursements to TRICARE providers.

That’s going to make it a lot more difficult for military families to get care – especially if they don’t live near a major installation with a military hospital. Reserve and Guard families who are dependent on TRICARE for care, as well as those stationed in smaller communities and posts will be most severely affected. Care providers will simply cease taking in TRICARE business, as it becomes less profitable.

We see this already with Medicaid: Doctors are reimbursed at rates that barely allow them to keep their doors open. The providers still in the Medicaid business – and increasingly, Medicare – adhere to the mass-population clinic model: Long wait times to see a doctor for five minutes, and the practice of “take-a-number” medicine.

The execution problem, though, is this: Even as Romney’s proposal would make it more difficult for military members, dependents and veterans to find TRICARE providers, long-time military benefits correspondent Tom Philpott notes that Romney is pushing a proposal to offload some of the overloaded VA systems’ case load to TRICARE.

President Obama’s Department of Defense, however, under Secretary of Defense Leon Panetta and former Secretary Robert Gates – a Bush appointee originally, has already gone on record advocating an increase in health care costs for military families. Specifically, if the Obama administration has its way, some military families could see TRICARE Prime premiums increase three-fold over the next five years – from $520 per year all the way to over $2,480.

The Obama Administration’s proposals have veterans’ groups steamed: The compact we had with our troops when they were reenlisting 10, 15, 20 years ago, the argument goes, was that they would get free or extremely low-cost health care for life, if they did their 20 years with the military.

And they are right. That was the deal.

Now, a bit of soul-searching is in order. We just went through a hotly contested bailout of General Motors in 2009. One of the major obstacles to General Motors’ profitability was the huge burden of retiree health care costs. GM was still contractually obligated to pay for ‘Cadillac’ health care coverage for union workers long after they retired. Newer companies had no such obligations, and were eating GM for lunch.

The Obama Administration intervened in 2009, putting together a massive bailout package that protected the interests of the unions at the expense of GM’s bondholders and stockholders. In the end, members of unions loyal to the Obama Administration managed to have many of their interests preserved – it was the long-term non-union, salaried GM employees who took it on the chin.

At the time, the Obama Administration’s argument – and the labor unions’ – was that these health care benefits were a promise made to these workers, and that promise should be honored – precisely the opposite of the argument the Administration is making with regard to TRICARE benefits now.

Conservatives, of course, opposed the General Motors bailout, calling for the company to go through the traditional bankruptcy process. As a result of that process, the contracts with the unions would be renegotiated, either under Chapter 11 reorganization or Chapter 7 liquidation. Most or all of the more generous retirement benefits would have been eliminated to satisfy bondholders and holders of secured debt.  Yes, workers were promised those health care benefits into retirement as part of the overall compensation deal. But some conservatives who now argue that our promises of free health care for life to career military should be sacrosanct had no problem whatsoever with tearing up the Cadillac health plans in Michigan. “That’s why we have Medicare” goes the argument. Indeed, opposition to the bailout – letting the company go bankrupt and tearing up the long-term agreements with union retirees was by far the more popular position, at the time.

The difference, of course, is that auto workers generally retired around the time they qualified for Medicare – and were less likely to have suffered debilitating injuries. Veterans retire in their late 30s to their 40s after 20 years. Even 30-year veterans often have a ways to go before they qualify for Medicare.

Neither side has a monopoly on goodness and light. Both sides exhibit a certain amount of hypocrisy on the matter.

My modest proposal:

  • Coordinate retiree care with private sector medical care. If a retiree takes a civilian job and is eligible for a group health care plan at work, then that group plan is the first payer. TRICARE should only pick up what’s left over. We already do this with Medicare benefits.
  • Do the same thing for dependents that are covered through group plans at work.
  • Increase deductibles for treatment of non-service-related injuries and illnesses, especially for dependents. We can have separate deductibles for different ranks, based on ability to pay. Deductibles in TRICARE are already extremely low compared to plans available in the civilian sector – yet military families have steady paychecks and – until the personnel cuts come in earnest – have more job security than those in the private sector who are paying taxes to subsidize low premiums for military families.
  • Charge a modest premium per child. This simply reflects the real costs to the military health care system in providing care to young children.
  • Don’t take in married recruits. Former Commandant of the Marine Corps, General Carl E. Mundy Jr., tried to stop taking in brand new married enlistees during the last major force draw-down in 1993. He was overruled by then Secretary of Defense Les Aspin. But General Mundy was right.

Sequestration and the Armed Forces

Posted by S.E. Davidson Parker

Congress of the United StatesThe Budget Control Act of 2011 increased our nation’s debt limit and created what is known as the Budget Supercommittee. This bipartisan committee was commissioned with the purpose of finding a way to cut the budget by January 1st, 2013. If they did not, the Act implements a series of mandatory across the board cuts across multiple federal departments and programs. These cuts are known as sequestration and may go into effect as soon as January 2nd, 2013.

The Department of Defense is not immune from sequestration. Although President Obama has implemented his authority to exempt military personnel funds from sequestration (as granted by the Budget Control Act), that does not protect the entire department. Military personnel funds are defined as pay, benefit, and change of station travel funds. While this protects service members’ paychecks, it increases the amount of reductions in other Department of Defense programs from 8% (if personnel funds were included) to 12% (with the current exemption).

The House Armed Services Committee has met with both Deputy Defense Secretary Ashton Carter and Acting Director of the Office of Management and Budget Jeffery Zients, both of whom say cuts would be “devastating” to our nation’s armed forces. Carter also warns of the “creation of an unready, hollow force” should these cuts go into effect, bringing back memories of a post-Vietnam Era military.

What does this mean to every member of the armed forces? Cuts across the other 2,500 military departments, including:

  • Military family social services
  • Training
  • Health care
  • Equipment and
  • Layoffs of civilian support staff (including but not limited to contractors)

Lack of training and equipment directly lead to a lack of readiness, placing our service members and our nation at risk. Morale is greatly undermined, and our service members (and nation) suffer even more.

There are approximate four months before sequestration goes into effect. Congress is out of session for most of two months (August and September). Then we have an election in November, with returning incumbents and lame ducks; if they can’t “get their act together” before the election, what makes us think that are they going to solve the problems between the time of the election and the inauguration of new members? Which, by the way, is interrupted by Thanksgiving and Christmas breaks.

This problem must be resolved now. Contact your Representatives and Senators and urge them not to let politics get in the way of national security. Hyperbole and over-exaggeration aside, this truly could be the issue of the decade, not just in terms of the Department of Defense but across almost all programs that receive federal funding across the country. Spending must be brought under control; let’s find an effective way to do so.

Veterans Administration Health Care – Creaking Under the Strain

Posted by Debi Teter

medical files xs“This is disgraceful!” thundered Representative Bob Filner, a Democrat representing California’s 51st district, immediately before a hearing on the tremendous delays American veterans face in receiving health care through the VA system. “This is an insult to our veterans. And you guys just recycle old programs and put new names on them!”

The VA health care system has never been a model of user-friendly efficiency. But the current backlog problems are getting insane, even by federal bureaucratic standards.


Last month, according to the Department of Veterans Affairs, there were 870,000 disability cases pending. Of those, two out of three had been pending more than 125 days. The percentage of cases taking longer than 125 days to resolve had actually increased over the previous year. In some offices, such as Oakland, California, the average claims resolution time drags on for a year.

The VA’s stated goal is to resolve all disability cases within 125 days.

Jim Strickland, the manager of a website called VAWatch.org, isn’t very impressed.

“A delay to process a claim in 125 days or less is a system failure,” he wrote on his site. “No other business on the planet would be applauding itself to set a goal of only 60% of it’s [sic] work to be a failure.”

It’s not going to be easy.

As the military draws down in strength over the coming years, hundreds of thousands of servicemembers are going to transition from the military health care system to the VA. Meanwhile, the aging baby-boomers of the Viet Nam generation are now entering their retirement years, detaching from their employer plans and entering their peak years of health care consumption.

The result is a “perfect storm” that threatens to swamp the ability of Veterans Affairs officials to process claims.

Indeed, the storm is already upon us: Allison Hickey, the VA’s undersecretary for benefits, notified Congress that there had been a huge 48 percent surge in applications at the VA over the last three years. The VA has barely been able to tread water, despite bringing new computer systems online to speed claims.

What’s behind the increase? Three factors:

A decision made two years ago to expand benefits to Viet Nam veterans who may have been affected by exposure to Agent Orange. This had a particularly profound effect on the VA’s claims processing capacity, because documenting these 40 year old claims – some 230,000 of them — was so difficult. A substantial number of VA administrators had to be assigned to process these cases – at the expense of newer claims. The VA states that it is nearing the end of processing those claims.

Second, a weak economy is driving some people to file claims for benefits who might otherwise have just toughed it out. A mild hearing loss due to military service is not devastating if you have secure employment. If you’re unemployed, it becomes tempting to file that claim for 10 to 30 percent disability. And you have time on your hands to file a claim (you’re gonna need it!).

Third, increased awareness of PTSD and traumatic brain injury, combined with aggressive post-deployment screening, increased the number of referrals to the VA system from Afghanistan and Iraq War veterans. While U.S. direct involvement in the Iraq War has come to an end, these veterans are now getting discharged and coming to VA offices in the tens of thousands for treatment of physical and psychological problems.

What has your experience with the VA been like in the last few years? Let us know in the comments below.

House Passes Defense Authorization Bill

Posted by Debi Teter

The House recently passed its version of the Defense Authorization bill (H.R. 4310). The cost of the approved provisions exceeds spending limits set by law, which has prompted the Obama Administration to threaten a veto of the measure.

The House version of the bill denies the drastic TRICARE fee increases requested by the Administration, which is good news for many military retirees. However, the bill does authorize higher pharmacy co-pays, but at levels below hikes requested by DoD and with provisions to limit future pharmacy co-pays to the Consumer Price Index (CPI). (DoD has the authority to increase co-pays without congressional approval.)

In addition to the provisions passed by the House Armed Services Committee, the House-approved version also includes language that prohibits the establishment of a commission that would propose changes to the military retirement benefit.

The fight to limit TRICARE and pharmacy costs and protect military retirement benefits then moved to the Senate, where the Senate Armed Services Committee and its subcommittees are expected to mark up their version of the bill next week.

Once both chambers pass their respective versions of the bill, a conference committee will be appointed to resolve differences. The final bill (conference report) must be approved by both chambers before it is sent to the President for his signature or veto.

New TRICARE legislation introduced in Senate

Posted by Debi Teter

Senators Marco Rubio (FL) and Frank Lautenberg (NJ) have introduced legislation that seeks to protect TRICARE beneficiaries from excessive and unfair enrollment fee increases and large hikes in pharmacy co-pays. The Military Health Care Protection Act of 2012 (S. 3203) emphasizes that military service is not like civilian occupations and the associated health care benefits are earned through 20 or more years of sacrifice and service to one’s country.

Senator Lautenberg’s efforts have been ongoing since 2007, when he introduced similar legislation and amendmends to control TRICARE fee increases. Other previous efforts supporting military financial issues include introducing language in bills that would have limited increases to no more than the Consumer Price Index, which is the basis for Social Security and VA benefits, and the COLA for military retired pay.