Military Health Budget Underfunded

Note: More about that promised free health care for Retiree's, never
delivered

Military Health Budget Underfunded
Tom Philpott | March 20, 2008
Military Health Budget Again Hit by Bogus "Savings"
http://www.military.com/features/0,15240,164397,00.html

Bush administration officials again have saddled Congress with an
underfunded military health care budget by projecting $1.2 billion in
savings they know will not be realized, say critics on Capitol Hill.

Part of the false savings, for a third straight year, is tied to the
unlikely scenario that Congress will enact administration plans to raise
TRICARE fees, co-payments and deductibles for military retirees. Key
lawmakers have vowed anew not to allow this.

But what irritates lawmakers more is that, even if they did embrace the
higher fees recommended by the Department of Defense's Task Force on the
Future of Military Health Care, and penciled into Bush's fiscal 2009 defense
budget, the actual savings realized wouldn't come close to matching the
number that the administration projects.

Most of the $1.2 billion in assumed savings swing on a the notion that if
fees, co-pays and deductibles are raised for retirees, tens of thousands of
current and future users of TRICARE will drop the military benefit and
switch to alternative health insurance offered by second-career employers.

That scenario defies logic, however, as even the co-chair of DoD's task
force on military health care bluntly stated during a March 12 hearing of
the House armed services' military personnel subcommittee.

"With all due respect to the department, there's nothing they're going to do
which is going to make TRICARE more expensive than what goes on in the
private sector," said Dr. Gail R. Wilensky, a prominent healthcare
economist. "I know they have used that argument. I don't know what they're
thinking. I don't agree with it."

The bottom line is that DoD, again, is intentionally shorting military
health care budgets, which means Congress either will have to add money to
the defense budget's top line or will have to find ways to squeeze $1.2
billion from other defense accounts.

Rep. John McHugh (N.Y.), ranking Republican on the subcommittee, noted that
the false savings built into the '09 budget will be harder for the armed
services committees to overcome this year.

"How this committee will find the means to restore that $1.2 billion cut
will be an especially difficult challenge because the House Budget
resolution, which opposes the TRICARE fee increases, does not add funding to
restore DOD's assumed savings," McHugh said in an opening statement.

McHugh vowed that the money will be found.

Though disavowing the Pentagon's proposed savings from higher fees, Wilensky
warned that they shouldn't remain frozen as they have been since TRICARE
began in 1995. Over time, she said, the government's cost share will reach a
point where taxpayers cover nearly all military health costs while the cost
for beneficiaries "approaches zero."

"We recognize the sacrifice [military] people made. The kinds of benefits
that are being provided are, we estimate, into the 90th percentile of [those
provided by] the largest employers in the country," said Wilensky.

That is as it should be, she said.

"We just didn't think Congress meant to have zero cost growth, or very close
to zero cost growth, to beneficiary contributions," Wilensky said.

McHugh and Rep. Walter Jones (R-N.C.) suggested that Congress won't allow
fee increases unless they are endorsed by service associations who lobby
lawmakers on behalf of beneficiaries.

But Dr. S. Ward Casscells, the assistant secretary of defense for health
affairs who testified along side Wilensky, said association leaders have
told him they are "willing to see a gradual increase in TRICARE fees,
co-pays and deductibles as long as it's not more than within the private
sector. Because they don't want to rob theater care" to address the rising
cost of retiree care.

McHugh was incredulous.

"Are you telling this panel that the [veteran service organizations] support
the increases that are contained in the DoD budget proposal?"

VSO leaders, Casscells clarified, "are not in favor of an abrupt increase in
fees, co-pays or deductibles" that "would catch up [for] the past 12 years
when [fees were] flat." But they do "recognize that you can't go for another
10 years without some increase in fees and co-pays and deductibles because
they know that at some point this will eat into theater care, combat
casualty care and force readiness."

"If you could get any of that in writing," said McHugh, "I would love to see
it."

Representatives of The Military Coalition, an umbrella group that include
scores of service associations and veteran organizations, have testified
previously that it is unfair for DoD officials to keep fees flat for more
than a decade and then try to double or triple them in a few years.

The coalition wants Congress to establish principles regarding military
health benefits to protect their value from the whims of politicians and
policymakers, and to establish limits on future beneficiary cost increases.

For example, fees increases for retirees and survivor beneficiaries in any
given year should not exceed the percentage increase in retired pay or
survivor compensation, the coalition maintains.

The coalition opposes the level of fee increases sought by the
administration and specifically objects to imposing new enrollment fees on
users of TRICARE Standard and TRICARE for Life. It also opposes "tiering" of
fees and co-payments based on rank at retirement or level of retired pay.

The coalition argues that retirees paid large "up-front premiums" for their
health care coverage through career of arduous service.

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