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Military Update

House panel endorses 'sensible' Tricare hike, cut in 'widow's tax'

The House Armed Services Committee has endorsed key portions of the Obama administration’s plan to begin to raise out-of-pocket costs modestly for some TRICARE beneficiaries, particularly working-age retirees.

The committee voted early Thursday to allow the first bump in TRICARE Prime enrollment fees in more than 15 years.  Retirees not yet eligible for Medicare would see a $30-a-year fee increase, to $260, for individual coverage and a $60 hike, to $520, for family coverage.

The committee’s bill also would allow these fees for retirees to be adjusted each year to keep pace with inflation.  But while the Department of Defense wanted the fees indexed to medical inflation nationwide, the committee language would cap any increase to the percentage rise in retired pay made through by the annual COLA or cost-of-living adjustment.

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Rep. Howard P. “Buck” McKeon (R-Calif.), the new committee chairman, called it a “sensible” approach to TRICARE fees. The committee’s final version of the defense authorization bill for fiscal 2012 also would allow co-pays to rise, by $2 or $3, on prescriptions filled in the TRICARE network of retail pharmacies, a move to encourage greater use of TRICARE mail order.

But the bill also would express “the sense of Congress” that career members and their families make “extraordinary sacrifices to protect freedom for all Americans and that those sacrifices constitute pre-payment for health care during retirement.”  This language has been long sought by military retiree associations to discourage any future Congress from raising health care costs dramatically for military retirees.

Another surprise in the final mark of the bill is a provision to ease the “widow’s tax” – or SBP/DIC offset -- for 57,000 surviving military spouses.

Surviving spouses of service members who die on active duty, or in retirement as a result of a service-connected injury or ailment, are eligible for tax-free Dependency and Indemnity Compensation (DIC) from the Department of Veterans Affairs.  But those also covered by the premium-paid Survivor Benefit Plan see their SBP benefit reduced, dollar for dollar, by DIC, nearly $1200 a month.  They have argued for years that the offset is unfair.

Congress so far hasn’t found the money, roughly $6 billion over the first 10 years, to eliminate the SBP-DIC offset entirely. Instead, starting in 2007, it authorized a Special Survivor Indemnity Allowance (SSIA) to ease the sting.  SSIA now pays $70 a month. It was to rise annually by $10 until it reached $100 in 2014, and then would go away.

Congress later voted to beef up and extend SSIA out to 2017.  This year’s House defense bill would raise SSIA even more and extend its life out to Oct. 1, 2021.  Under the revised incremental growth plan, SSIA would be raised to $163 by fiscal 2013, $200 in 2014, $215 in 2015, $282 in 2016 and $314 for fiscal 2017.

For fiscal 2018, SSIA would fall to only $9 and then climb gradually back to $27 by fiscal 2021.  But these amounts merely are placeholders in the budget, a hopeful sign from the committee that Congress will continue to reduce the SBP-DIC offset in this way as money can be found.

McKeon’s $150 million SSIA initiative would be funded in part by accepting the administration plan to curb costs associated with the Uniformed Services Family Health Plan.  These are former Public Health Service hospitals that provide managed care enrollment to military beneficiaries in six select areas where bases closed.

Medicare-eligible retirees using USFHP facilities have not had to enroll in Medicare Part B.  But starting Oct. 1, 2012, any USFHP enrollee who reaches age 65 and becomes eligible for Medicare would be bumped from the program.  Like aging TRICARE Prime enrollees, they would have to enroll in Medicare Part B and rely on TRICARE for Life as a supplemental plan to Medicare. Medicare-eligible retirees already using USFHP doctors would be grandfathered from this change.

Rep. Joe Wilson (R-S.C.), chairman of the military personnel subcommittee, had inserted language in his panel’s mark of the bill to block any TRICARE fee increases for one year.  McKeon removed that language.

Wilson said military retirees “have made significant down payments” on health care benefits through years of service. Therefore he opposed any attempt to “make them pay more” particularly given that, like the rest of the country, retirees are being strained financially by “rising gas prices.”

But when Wilson tried to insert his fee freeze as an amendment during final mark up, about 2 a.m. Thursday, Rep. William Thornberry (R-Texas) said it would involve mandatory spending for which no offset funding was identified.  He therefore challenged the amendment on a “point of order.”  McKeon agreed and Wilson never got to argue it.

A lot of debate during final hours of mark up hit on social issues.  It took nearly a hour of debate before the committee rejected an amendment from Rep. Duncan Hunter Jr. (R-Calif.) to spend $10 million on a five-year pilot program to grant vouchers to as few as 250 families who could choose to educate their special needs children in private rather than public schools.

But the committee accepted three amendments aimed at slowing or dampening the effect of repeal of the Don’t Ask, Don’t Tell law, which would allow homosexuals to serve openly in the military.  An amendment accepted from Hunter would delay repeal in combat force units only until the service chiefs for the Army, Navy, Air Force and Marine Corps certified those units will not be negatively impacted.  The law passed last December would allow repeal if the president, secretary of defense and chairman of the Joint Chiefs certify it would have no significant impact on readiness.

An amendment accepted from Rep. Vicky Hartzler (R-Mo.) would require that the word “marriage” in any military policy or regulation mean only a legal union between one man and one woman.  An amendment accepted from Rep. Todd Akin (R-Mo.) would prohibit use of military facilities for same-sex marriage ceremonies, a swipe at plan by the Navy chaplain corps to support such ceremonies in states that allow same-sex marriages. 

Senate Democrats can be expected to challenge these provisions during negotiations over a final defense bill.

To comment, e-mail milupdate@aol.com, write to Military Update, P.O. Box 231111, Centreville, VA, 20120-1111 or visit: www.militaryupdate.com.

 

 

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