Action in Congress

April 1, 2007

Tricare Assumptions

Key lawmakers and military retirees’ advocates challenged Defense Department assumptions of $1.86 billion in new Tricare revenue in the Fiscal 2008 defense health budget. It assumes Congress will pass a raft of new Tricare fees.

William Winkenwerder Jr., assistant secretary of defense for health affairs, suggested a medical budget shortfall can be avoided if Congress embraces future recommendations of the Task Force on the Future of Military Health Care.

Rep. Vic Snyder (D-Ark.), chairman of the House Armed Services’ subcommittee on military personnel, blasted the projected savings, saying the projection “poisoned the water” for the task force by reinforcing a perception that the task force has been “stacked” to recommend fee changes and hit cost-cutting targets.

Last year Congress rejected a DOD plan to raise Tricare fees, deductions, and co-payment costs for under-65 retirees. After a two-year phase in, beneficiary cost-shares would have been indexed to rise annually by the percentage increase in health care premiums for federal civilian employees. (See “Action in Congress: DOD Upholds Tricare Increases,” April 2006, p. 25.)

Winkenwerder confirmed that the $1.86 billion projected for Fiscal 2008 signals that DOD would now implement full changes in a single year, if allowed.

Rep. John McHugh (N.Y.), ranking Republican on the personnel subcommittee, asked Winkenwerder what DOD would do if Congress doesn’t approve fee increases to produce the anticipated Tricare savings.

There would have to be “fairly dramatic” program cuts, Winkenwerder answered.

Pocketing Savings

Snyder noted that the Tricare task force isn’t scheduled to produce a final report until long after the House and Senate need to pass a Fiscal 2008 defense budget.

The assumed savings, said Winkenwerder, are a signal of how committed defense officials, particularly military leaders, are to seeing Tricare cost-sharing rebalanced. Costs have grown dramatically in recent years with fees frozen, and DOD wants retirees and their families to pay more.

Winkenwerder denied that the task force had been stacked, and he also expressed confidence that its recommendations will be endorsed. DOD selected the panel’s 14 members.

Blocking Moves

Some lawmakers, meanwhile, are building barricades against hefty Tricare fee increases. In February, Sen. Frank R. Lautenberg (D-N.J.) and Sen. Chuck Hagel (R-Neb.) introduced a bill to limit annual increases in health care fees to no more than the percentage increase each year in military compensation.

The bill also would block any enrollment fee for Tricare Standard, the military’s traditional fee-for-service health insurance, and block any increase in the Standard inpatient co-payment.

The bill would establish in law that health benefits offset the demands of a military career.

The Military Coalition, an umbrella group for 35 separate military associations and veterans groups including the Air Force Association, endorses the bill.

Meanwhile, Rep. Chet Edwards (D-Tex.) and Rep. Walter Jones Jr. (R-N.C.) in January introduced legislation to block fee increases.

Total Force GI Bill

Lawmakers, urged on by service associations and veterans groups, have unveiled fresh plans to pass a Total Force GI Bill that would bring education benefits for reservists more in line with those of active duty members.

The legislative vehicle for all of this is the Total Force Educational Assistance Enhancement and Integration Act of 2007, introduced in the House and Senate by key Democrats and Republicans.

The bill was drafted by the Partnership for Veterans’ Education, a consortium of military, veterans, and higher-education groups.

“The big motivator for all of us,” said Rep. Vic Snyder, chairman of the House Armed Services’ subcommittee on military personnel, is ending the disparity in education benefits—particularly when both active duty and reserve are serving year-long tours in a war zone.

Drilling reservists have seen the gap in education benefits widen compared to active duty members. Most significantly, reserve personnel, even those mobilized for war, still lose their education benefits when they separate from service.

Beyond REAP

Supporters contend a modern Montgomery GI Bill for Reservists is overdue. Congress a few years back passed the Reserve Educational Assistance Program, which enhanced GI Bill benefits to reservists activated for 90 days or more after Sept. 11, 2001.

Payments are set at 40, 60, or 80 percent of active duty MGIB, depending on length of activation. But as with Selected Reserve MGIB, REAP can’t be used once a reserve component member is discharged from service.

The Total Force MGIB would guarantee that Reserve and National Guard education benefits rise proportionally with active duty MGIB benefits. It would allow REAP benefits to accrue month by month for mobilized members at the active duty rate, currently $1,075 per month. And it would establish “portability” for REAP benefits so once-mobilized reservists who leave service have up to 10 years to use their GI Bill benefits.

First Things First

The first step Congress must take, said Snyder, is to consolidate active and reserve MGIB programs under the Department of Veterans Affairs. (Reserve benefits now are awarded and funded by DOD.) This split in responsibility between agencies also splits Congressional committee oversight and has led to the current disparities.

Defense officials oppose such consolidation. They see Reserve GI Bill benefits as a retention tool they need to control. Officials have testified that making reserve benefits portable risks harming retention goals.

“We don’t agree,” Snyder said.

Officials also fear Congress will give the VA management of all GI Bill programs but continue to require that DOD fund reserve benefits. Congress must ensure that doesn’t happen, Snyder said.

Other New Measures

Several other measures to help pay and benefits for service people have been recently introduced. They include:

Concurrent Receipt—Senate Majority Leader Sen. Harry Reid (D-Nev.) seeks to expand eligibility for concurrent retirement and disability payments to all retirees with at least 20 years of service and disability ratings from the VA. Freshman Rep. Gus M. Bilirakis (R-Fla.) has introduced a companion bill in the House.

Death Gratuity Beneficiary—Sen. John McCain (R-Ariz.) wants to repeal the statutory designation of beneficiaries of the $100,000 military death gratuity to permit service members to designate their choice of beneficiary in the event of their death on active duty. The intent is to provide financial support to those who might assume responsibility for raising a deceased member’s children.

Reserve Hire Incentives—Bilirakis also has introduced two bills to provide incentives for businesses to hire reservists. One would provide employers with a tax credit of 50 percent of compensation paid to employees who are serving on active duty; the other would give employers a tax credit of 10 percent for the value of services not performed while employees are on duty.