Higher TRICARE Fees, Better GI Bill

Tom Philpott | February 07, 2008

Higher TRICARE Fees, More Gi-Bill Transfers, Sought In '09

Presidents Bush's final defense budget, for fiscal 2009, asks a reluctant Congress for a third time to raise TRICARE co-payments on drugs dispensed at retail pharmacies and to increase TRICARE enrollment fees and deductibles for working-age military retirees and their families.

Defense Secretary Robert Gates and Adm. Michael Mullen, chairman of the joint chiefs, soft-pedaled arguments for fee increases this year while presenting the '09 budget to the armed services committees Feb. 5.

Indeed, both said they will reexamine the Defense Department's opposition to Sen. James Webb's (D-Va.) bill (S. 22) for a World War II-style GI Bill education package for the current force.  Meanwhile, Gates said, DoD will get behind some sort of expansion to a program that allows transfer of unused Montgomery GI Bill benefits to spouses and dependent children.  

Savings of $1.2 billion from higher TRICARE fees are assumed in the budget, even though Defense officials aren't ready to share specific details. Tina Jonas, the DoD comptroller, said the fee increases will be based on recommendations of the Task Force on the Future of Military Health. But Defense officials have given themselves until June to study those recommendations and decide which ones DoD wants Congress to approve.

If that sounds like a health budget built backwards, well, it is, say some influential lawmakers. Rep. John McHugh (N.Y.), ranking Republican on the House armed services' military personnel subcommittee, said no lawmaker he knows wants to support the administration's final try to raise TRICARE fees. But the challenge again this year will be finding money to plug the $1.2 billion hole left that DoD left in service medical budgets.

"My gut is that there are very few, if any, members either on the personnel subcommittee or the full committee who want to do this," said McHugh. "The question that remains is, 'Where do we find the money not to?' The tyranny of the proposal is that, if you refuse to enact it, the revenue-slash-savings embodied in it has to be made up somewhere."

Rep. Carol Shea-Porter (D-N.H.), a freshman on the House Armed Services Committee and former military spouse, suggested to Gates that the projected TRICARE savings are "a shell game" because they assume many retirees under age 65, when faced with higher out-of-pocket costs, will go elsewhere for health insurance, shifting most likely to employer plans.

"Can you imagine that people will pull away from a [military] health care policy?" she asked.

Comptroller Jonas, sitting at Gates' side, responded for him that the fee increases will be based on recommendations of the task force that Congress commissioned. She added that military health care spending "has doubled since 2001. In fact, we spend more on our health care than Germany spends on its entire defense. So this is something that has to be looked at. Obviously it's something that we cannot do without the help and engagement of Congress. Our purpose is to put it on the table and try to get some discussion going about how we maintain a very important benefit."

The higher drug co-payments, which would impact active duty families as well as retirees of any age and their families, are projected to save $700 million next year. Higher TRICARE fees and deductibles for under age 65 retirees and their families would save another $500 million.

With health costs climbing nationwide, Shea-Porter said, it is unrealistic to try to curb health costs for the military. Also, she said, the $42 billion being spent next year on military beneficiaries needs to be considered in light of $10 billion to $12 billion a month being spent to stay in Iraq.

"We have an obligation to protect these troops and honor our commitment to their families," Shea-Porter said.

Besides higher TRICARE fees, DoD is pushing three new budget initiatives to enhance support for military families. One would strengthen work opportunities for spouses through merit-based internships and by expanding a pilot program called "career advancement accounts" which offer spouses up to $3000 a year for education and training in select career fields.

A second would increase child care centers through public-private partnerships. A third initiative would allow more members to transfer unused Montgomery GI Bill education benefits to their spouse and children but officials are still deciding how such a program would be shaped.

One idea being studied is to endorse a bill (S 2575) introduced by Sen. Kay Bailey Hutchison (R-TX) to broaden the very limited MGIB transfer authority approved several years ago and used today only by the Army.

Under current law, the services can offer enlisted members in critical skills a chance to transfer up to 18 months of unused MGIB benefits to a spouse or child. The member must have at least six years in service, must sign a four-year reenlistment contract and must accept a reduction to their reenlistment bonus. Fewer than 100 soldiers have been enticed by the offer since it became available in November 2006.

Hutchison's bill would drop the critical skills requirement thus opening the transfer option to many more careerists with at least six years of service. Her bill also would allow transfer of all unused benefits, which means up to 36 months, and the offer would be open to reserve component enlisted too.

Gates and Mullen promised Webb to at least look carefully at his bill to replace the contributory MGIB with plan that would pay the full cost of attending public colleges and universities. Last year, Defense officials testified that any major boost to educational benefits would hurt retention.

Webb argues that a more robust GI Bill not only is deserved but would boost recruiting at a time when officials concede recruit quality is falling.

"I'm very happy to take a look at this bill," Gate said, adding that his GI Bill benefits "did pay for my PhD at Georgetown."