Trying once more to get military compensation costs "under control," the Obama administration has asked Congress to cap annual active duty and reserve component pay raises, and to phase in over four years a complex formula for raising TRICARE fees on retirees of all ages and their families.
The five-year budget plan unveiled Wednesday proposes that annual pay raises be held at one percent from 2014 through 2016 and be raised to 1.5 percent in 2017 and to 2.5 percent in 2018, said Robert Hale, the Department of Defense's under secretary and comptroller.
The first year's pay cap alone, which would trim just eight-tenths of a percentage point off a scheduled 1.8 percent increase to match of private sector wage growth, would save $540 million in 2014 and $3.5 billion through 2018, officials said.
As in years past, the administration seeks to cut health costs by having retirees and families pay more under all three options of TRICARE.
Here are details of these proposals:
TRICARE Prime – The current family enrollment fee of $539 for working-age retirees (under age 65) would increase next year to equal 2.95 percent of the individual's gross retired pay. But for 2014 the fee would be subject to an annual minimum, or floor, of $548 and a ceiling of $750 ($900 for flag officers). The fee would be raised to 3.3 percent of gross retired pay in 2015 with a floor of $558 and ceiling of $900 ($1200 for flag); 3.65 percent in 2016 with floor of $569 and ceiling of $1050 ($1500 for flag); and so on until reaching 4 percent of gross retired pay in 2018 with a floor of $594 and ceiling of $1226 ($1840 for flag).
Fees for single coverage would be half these amounts.
TRICARE Standard/Extra – For the first time, users of these options would face an annual enrollment fee, starting at $70 for single coverage or $140 for family, and rising each year until reaching $125 (individual) and $250 (family) in 2018. Also, the current annual deductible of $150 (individual) and $300 (family) would gradually increase, starting in 2014 and until it reached $290 (individual) and $580 (family) in 2018.
Adjustments – After 2018, all TRICARE enrollment fees, floors and ceilings, and deductibles for retirees would climb yearly by the same percentage increase of cost-of-living adjustments (COLAs) for military retired pay to keep pace with inflation.
TRICARE for Life – Beneficiaries 65 and older can use TRICARE for Life as a golden supplement to Medicare. Officials said a comparable individual policy in 2009 would cost $2100 in the private sector. So, they reason, military elderly should at least pay a small enrollment fee. But these changes would be grandfathered to impact only retirees who become TFL beneficiaries after enactment.
The fee would equal one half of one percentage point of gross retired pay in 2014; one percent in 2015; 1.5 percent in 2016, and two percent in 2017 and in 2018. But the fees would have ceilings: no more $150 a year in 2014; no more than $300 in 2015, $450 in 2016, $600 in 2017 and no more than $618 in 2018. Flag officers would face higher ceilings though not substantial. After 2017, these fees would be adjusted by the percentage of retiree COLAs.
Pharmacy Fees – The administration wants to follow last year's increases in pharmacy co-pays with additional increases phased in to encourage greater use of mail order and generic drugs.
Catastrophic Cap – The current cap on total out-of-pocket costs TRICARE costs of $3000 a year would be raised for retirees in two ways: by excluding any TRICARE enrollment fees from counting toward the cap; and by raising the cap annually by the percentage of retiree COLA.
Officials hope tying the size of fees to level of retired pay will soften resistance in Congress. Also, this year's plan would exempt from any fee increases the survivors of members who die on active duty and persons medically retired from service. And the department no longer is asking that TRICARE fees be adjusted annually based on medical inflation.
That concession to use retiree COLAs instead might be less than it appears. The Obama budget proposes, as part of a larger debt-reduction deal, that all federal COLAs, including for social security, veteran benefits and retirement plans, switch to a "chain" Consumer Price Index to measure inflation. This CPI would save the billions of dollars annually by shaving every COLA by a fraction of a percentage point.
Obama's support for it is conditional; Republicans must agree to close some corporate tax loopholes and to raise taxes on the wealthy. Still, Obama support of chain CPI has drawn fire from some Democrats and liberals in Congress. Sen. Bernie Sanders, an independent from Vermont who chairs the veterans affairs committee, added language to the Senate's non-binding budget resolution to oppose it. If the chain CPI is adopted, said Sanders, "veterans who started receiving VA disability benefits at age 30 would have their benefits reduced by $1,425 [a year by] age 45."
In unveiling the 2014 defense budget request, Defense Secretary Chuck Hagel said the smaller pay raises and TRICARE changes would save $1.4 billion next year and $12.8 billion over just five years. The TRICARE changes, he said, would "bring the beneficiary's cost-share closer to the levels envisioned when the program was first implemented."
In 1996, officials said, retirees covered 27 percent of total TRICARE costs with enrollment fees, deductibles or co-payments. Today, their out-of-pocket costs cover only 11 percent.
Asked to recall how hard it was to vote for higher TRICARE fees when he was a senator, Hagel said times are different now. When he left Congress in 2009 the global financial crisis was just beginning. Today, the Department of Defense is struggling with $41 billion in automatic cuts this year from budget sequestration. It faces $500 billion in more cuts over the next decade if the administration and Congress can't partner on a solution.
The $527 billion defense budget for 2014 assumes that a large debt-reduction deal is reached and sequestration ends. The defense share of the deal would be $150 billion in cuts over the decade versus $500 billion under sequestration. If slowing compensation growth isn't as part of that $150 billion cut, Defense officials said, deeper force cuts are inevitable.
Showing posts with label TRICARE changes. Show all posts
Showing posts with label TRICARE changes. Show all posts
Sunday, December 29, 2013
Wednesday, March 27, 2013
Legislative Update from the Association of the U.S. Army (AUSA)
CONGRESS CLEARS SPENDING BILL
Congress cleared a spending package last week that averts a government shutdown and gives the Defense Department some breathing room. What has not been averted is the sequester. It will remove an equal amount from every non-exempt program.
The bill funds most of the government through a continuation of the current continuing resolution, but also includes full Defense and Military Construction-VA bills that have adjusted spending levels for programs in order to protect high-priority programs and better manage the sequester.
Among the provisions in the bill are those that would:
* Prohibit the Pentagon from collecting new enrollment fees for TRICARE beneficiaries;
* Prohibit DoD from spending funds on a new commission to identify the next round of potential base closures;
* Appropriate $1.5 billion in unrequested funds for National Guard and Reserve Component equipment;
* Provide funding for an across-the-board 1.7% pay increase for military personnel;
* Set a ceiling on the number of active-duty military personnel at 552,100 for the Army (9,900 less than the current level);
* Propose that the size of the active-duty Army be reduced by 72,000 between FY 2012 and FY 2017;
* Provide $2.9 billion for Defense Department dependent schools; and,
* Provide $40 million for impact aid and $5 million for impact aid for children with disabilities.
The legislation is now on the president’s desk for signature.
TUITION ASSISTANCE RESTORED
An AUSA-supported amendment offered by Sens. Kay Hagan, D-N.C., and Jim Inhofe, R-Okla., to restore funding for the military’s tuition assistance (TA) program was adopted by the Senate March 21 as part of the spending bill.
New enrollment in tuition assistance (TA) for service members was abruptly cancelled by the Army as part of its efforts to manage severe budget cuts mandated by Congress in the Budget Control Act of 2011.
While TA will be restored, the future program will probably be a lot different than the current program. Eligibility rules may be tightened and the basic structure may change. An Army Times article said that there is speculation that the Army will seek to return to the 75/25 payment model, under which the service paid 75 percent while the soldier paid the remaining 25 percent.
Further, the legislation does not say how the cost would be covered, only that the Defense Department would have to restore funding. Accordingly, the services are left to figure out where the money will come from.
In response to this announcement, AUSA President Gen. Gordon R. Sullivan, USA, Ret., said, "The Association of the United States Army supported the amendment to restore TA funding and we thank the House and the Senate -- and in particular Senator Hagan and Senator Inhofe -- for restoring tuition assistance for our soldiers who wish to pursue educational courses to improve themselves – personally and professionally --during their off-duty time while in the service or as they transition to the civilian sector during troop cutbacks.”
Adding, “Cutting tuition assistance for our soldiers – especially those who have been down range and in harm’s way – would have been a blow to the morale of our all-volunteer force, and would have had a dramatic negative impact on the Army’s recruiting and retention efforts.”
TRICARE FOR LIFE IS NOT FREE!
A column in today’s Washington Post trots out the same tired arguments with regards to the cost of TRICARE. One assertion regarding TRICARE For Life has us particularly irritated.
The column states that, “Once former military personnel turn 65, they are eligible for Medicare, like everyone else. But in 2002, Congress gave them “Tricare for Life” — essentially, a free Medigap plan.”
That assertion is flat out wrong!
When a military retiree and his or her spouse reach the age of eligibility, the Medicare system assumes responsibility for providing their health care. To receive the full range of benefits that they have earned, military retirees have to enroll in Medicare Parts A and B and become subject to the same fees and regulations as those citizens who never served a day in uniform. Military retirees and others enroll in Medicare Part A (in-patient care coverage) at no cost, but access to Medicare Part B (out-patient services) requires that they pay substantial monthly premiums.
Annual Part B premium increases have not only been steep but have also proved highly erratic and unpredictable. Between 2000 and 2011, the average Part B premium increase was nearly 9 percent per year, but it fluctuated considerably, reaching a high of 17.4 percent in 2005 and a low of zero in 2009—before spiking again to 14.6 percent for new enrollees in 2010.
Since 2007, Medicare Part B premiums have been “means-tested”; i.e., retirees with higher individual or family incomes pay even higher Part B rates. Effectively, military retirees who achieved higher rank during their service or succeeded in supplementing their post-retirement incomes are penalized in the health care system for their success and have no other option for accessing their health care benefits.
Further, even as the Part B cost trends accelerate, military retirees’ access to quality care is increasingly threatened. In an effort to control costs, existing law has triggered a series of reductions over the past decade to the funds that reimburse health care providers for delivering care to Medicare patients. So far, Congress has passed short-term fixes every year that temporarily postpone the cuts. However, the continued uncertainty in the program erodes health care providers’ confidence in the system and causes a great number of them to refuse service to Medicare beneficiaries, thereby reducing the availability of quality care for military retirees and their families—especially for patients who are newly eligible.
We are grateful that Congress recognized the need for the TRICARE For Life program and that they continue to protect it from those who seek to solve budget issues on the backs of our military retirees.
CIVILIAN FURLOUGH NOTICES DELAYED
The Pentagon announced last week that they will delay the issuance of civilian employee furlough notices for approximately two weeks.
A statement said that the delay would allow the Pentagon to carefully analyze the impact of the continuing resolution legislation on the department's resources. It further states that they have not made any decisions on whether or not the total number of planned furlough days for fiscal 2013 will change as a result of this delay.
AUSA President Gen. Gordon R. Sullivan, USA, Ret., is not happy about the way federal civilians are being yanked around. He feels that they are being demonized as a too highly paid, unnecessarily large work force, and is seen by many as a convenient cost containment target whose pay has been frozen by Congress for the last several years and who now face furloughs.
‘Our federal civilian work force soldiers on -without pay raises and with the enormous uncertainty that the potential furlough action brings to their already frozen pay checks. In addition to the immediate financial impact on the civilian work force, the possible furlough action has impact on military readiness, on medical care (many physicians in military hospitals are civilians), on lost spending when exchanges and commissaries are closed which then impacts the vendors who sell less to military customers and cut their work forces because of reduced demand,” Sullivan said.
While the two-week delay in furlough implementation is welcome news, AUSA urges the Department of Defense to carefully consider the myriad effects of such action on a talented and dedicated group of people as well as the nation writ large before it moves forward.
Congress cleared a spending package last week that averts a government shutdown and gives the Defense Department some breathing room. What has not been averted is the sequester. It will remove an equal amount from every non-exempt program.
The bill funds most of the government through a continuation of the current continuing resolution, but also includes full Defense and Military Construction-VA bills that have adjusted spending levels for programs in order to protect high-priority programs and better manage the sequester.
Among the provisions in the bill are those that would:
* Prohibit the Pentagon from collecting new enrollment fees for TRICARE beneficiaries;
* Prohibit DoD from spending funds on a new commission to identify the next round of potential base closures;
* Appropriate $1.5 billion in unrequested funds for National Guard and Reserve Component equipment;
* Provide funding for an across-the-board 1.7% pay increase for military personnel;
* Set a ceiling on the number of active-duty military personnel at 552,100 for the Army (9,900 less than the current level);
* Propose that the size of the active-duty Army be reduced by 72,000 between FY 2012 and FY 2017;
* Provide $2.9 billion for Defense Department dependent schools; and,
* Provide $40 million for impact aid and $5 million for impact aid for children with disabilities.
The legislation is now on the president’s desk for signature.
TUITION ASSISTANCE RESTORED
An AUSA-supported amendment offered by Sens. Kay Hagan, D-N.C., and Jim Inhofe, R-Okla., to restore funding for the military’s tuition assistance (TA) program was adopted by the Senate March 21 as part of the spending bill.
New enrollment in tuition assistance (TA) for service members was abruptly cancelled by the Army as part of its efforts to manage severe budget cuts mandated by Congress in the Budget Control Act of 2011.
While TA will be restored, the future program will probably be a lot different than the current program. Eligibility rules may be tightened and the basic structure may change. An Army Times article said that there is speculation that the Army will seek to return to the 75/25 payment model, under which the service paid 75 percent while the soldier paid the remaining 25 percent.
Further, the legislation does not say how the cost would be covered, only that the Defense Department would have to restore funding. Accordingly, the services are left to figure out where the money will come from.
In response to this announcement, AUSA President Gen. Gordon R. Sullivan, USA, Ret., said, "The Association of the United States Army supported the amendment to restore TA funding and we thank the House and the Senate -- and in particular Senator Hagan and Senator Inhofe -- for restoring tuition assistance for our soldiers who wish to pursue educational courses to improve themselves – personally and professionally --during their off-duty time while in the service or as they transition to the civilian sector during troop cutbacks.”
Adding, “Cutting tuition assistance for our soldiers – especially those who have been down range and in harm’s way – would have been a blow to the morale of our all-volunteer force, and would have had a dramatic negative impact on the Army’s recruiting and retention efforts.”
TRICARE FOR LIFE IS NOT FREE!
A column in today’s Washington Post trots out the same tired arguments with regards to the cost of TRICARE. One assertion regarding TRICARE For Life has us particularly irritated.
The column states that, “Once former military personnel turn 65, they are eligible for Medicare, like everyone else. But in 2002, Congress gave them “Tricare for Life” — essentially, a free Medigap plan.”
That assertion is flat out wrong!
When a military retiree and his or her spouse reach the age of eligibility, the Medicare system assumes responsibility for providing their health care. To receive the full range of benefits that they have earned, military retirees have to enroll in Medicare Parts A and B and become subject to the same fees and regulations as those citizens who never served a day in uniform. Military retirees and others enroll in Medicare Part A (in-patient care coverage) at no cost, but access to Medicare Part B (out-patient services) requires that they pay substantial monthly premiums.
Annual Part B premium increases have not only been steep but have also proved highly erratic and unpredictable. Between 2000 and 2011, the average Part B premium increase was nearly 9 percent per year, but it fluctuated considerably, reaching a high of 17.4 percent in 2005 and a low of zero in 2009—before spiking again to 14.6 percent for new enrollees in 2010.
Since 2007, Medicare Part B premiums have been “means-tested”; i.e., retirees with higher individual or family incomes pay even higher Part B rates. Effectively, military retirees who achieved higher rank during their service or succeeded in supplementing their post-retirement incomes are penalized in the health care system for their success and have no other option for accessing their health care benefits.
Further, even as the Part B cost trends accelerate, military retirees’ access to quality care is increasingly threatened. In an effort to control costs, existing law has triggered a series of reductions over the past decade to the funds that reimburse health care providers for delivering care to Medicare patients. So far, Congress has passed short-term fixes every year that temporarily postpone the cuts. However, the continued uncertainty in the program erodes health care providers’ confidence in the system and causes a great number of them to refuse service to Medicare beneficiaries, thereby reducing the availability of quality care for military retirees and their families—especially for patients who are newly eligible.
We are grateful that Congress recognized the need for the TRICARE For Life program and that they continue to protect it from those who seek to solve budget issues on the backs of our military retirees.
CIVILIAN FURLOUGH NOTICES DELAYED
The Pentagon announced last week that they will delay the issuance of civilian employee furlough notices for approximately two weeks.
A statement said that the delay would allow the Pentagon to carefully analyze the impact of the continuing resolution legislation on the department's resources. It further states that they have not made any decisions on whether or not the total number of planned furlough days for fiscal 2013 will change as a result of this delay.
AUSA President Gen. Gordon R. Sullivan, USA, Ret., is not happy about the way federal civilians are being yanked around. He feels that they are being demonized as a too highly paid, unnecessarily large work force, and is seen by many as a convenient cost containment target whose pay has been frozen by Congress for the last several years and who now face furloughs.
‘Our federal civilian work force soldiers on -without pay raises and with the enormous uncertainty that the potential furlough action brings to their already frozen pay checks. In addition to the immediate financial impact on the civilian work force, the possible furlough action has impact on military readiness, on medical care (many physicians in military hospitals are civilians), on lost spending when exchanges and commissaries are closed which then impacts the vendors who sell less to military customers and cut their work forces because of reduced demand,” Sullivan said.
While the two-week delay in furlough implementation is welcome news, AUSA urges the Department of Defense to carefully consider the myriad effects of such action on a talented and dedicated group of people as well as the nation writ large before it moves forward.
Friday, November 23, 2012
BOHICA: 171,000 May Soon Lose TRICARE Prime
Defense officials are expected to announce that military retirees and their dependents that live more than 40 miles from a military treatment facility or BRAC (base closure) site will lose access to TRICARE Prime as early as next April.
This move could force as many as 171,000 retirees to shift to TRICARE Standard, which would mean an increase in out-of-pocket costs--especially those with special needs dependents or other chronic health issues.
The first round of Prime service changes is "tentatively" planned to go into effect in the West region on April 1. The North and South regions will see the plan implemented by October 1, 2013.
Go to the Military Advantage.Military.com site to read more.
Note: For those of you who have forgotten what "BOHICA" stands for, it means: Bend Over Here It Comes Again
This move could force as many as 171,000 retirees to shift to TRICARE Standard, which would mean an increase in out-of-pocket costs--especially those with special needs dependents or other chronic health issues.
The first round of Prime service changes is "tentatively" planned to go into effect in the West region on April 1. The North and South regions will see the plan implemented by October 1, 2013.
Go to the Military Advantage.Military.com site to read more.
Note: For those of you who have forgotten what "BOHICA" stands for, it means: Bend Over Here It Comes Again
Subscribe to:
Posts (Atom)