Fight over Pentagon proposal to raise health care fees begins

With a vast and motivated grassroots lobbying base in tow, military organizations are gearing up to battle the Pentagon over an fiscal 2007 budget proposal that offsets the Defense Department's skyrocketing healthcare costs by increasing premiums and other fees for military retirees under age 65.

The budget proposal, which has the unanimous blessing of the Joint Chiefs of Staff, would save the department $735 million in fiscal 2007, and $11 billion over the next five years -- tremendous savings at a time of increased fiscal pressures across the federal government.

In fiscal 2006 alone, the military will pay $37 billion for healthcare programs, which amounts to 8 percent of the Defense budget and $18 billion more than the department paid five years ago. Without making significant changes to the program, the military is on track to spend a whopping $64 billion a year on health care by 2015, nearly twice this year's entire Homeland Security Department budget.

"We believe that this healthcare benefit is unique and superb," Joint Chiefs Chairman Peter Pace said this week. "We want it to continue ... and we believe that [the proposal] is one way to assist in helping us achieve the goal of long-term sustained health care."

But less than a week after President Bush released his budget request, a wide range of military groups has launched letter-writing campaigns and begun pounding the pavement on Capitol Hill to sway lawmakers to reject the proposal. Indeed, more than 22,000 members of the Military Officers Association of American have inundated Capitol Hill with letters since December, when word of possible increases to TRICARE healthcare fees began to circulate.

"The military and veterans community is all on the same page with this issue," said Michael Wysong, director of national security and foreign affairs at Veterans of Foreign Wars, one of the largest groups behind the protest. "We're marching in the same direction."

The proposal essentially would increase enrollment fees and deductibles, on a sliding scale based on rank at retirement. It also would increase retail pharmacy co-payments, and reward retirees for using mail-order services for generic prescriptions.

Administration officials say TRICARE cost shares and fees have not been adjusted in 11 years, while most other healthcare programs have made substantial increases.

But that could still mean a 300 percent increase on some premiums, said Sydney Hickey, a board member at the National Military Family Association. "That's a little excessive, like a lot excessive," she added.

Some families could pay $100 a month more under the new policy, estimates John Class, deputy director of government affairs for the military officers group.

"You're going to contain costs by making it expensive so people won't join ... and maybe use other insurance," Class said. "Or just not seek medical care."

In fact, the Defense Department is banking on some current TRICARE enrollees dropping the plan and seeking insurance from employers -- who, Pentagon officials say, are encouraging their retired military employees to choose TRICARE over their plans.

But opponents argue that many retirees might not have the option of turning to private insurers. "There are a lot of assumptions that they're making with regards to second careers," Class said.

On Capitol Hill, several key lawmakers said they hope to work with the Defense Department during the authorization process to either explain or amend the proposal.

"Some of DOD's numbers and assumptions look questionable on a number of levels -- mathematically and morally," said House Armed Services Personnel Subcommittee ranking member Vic Snyder, D-Ark. "Hopefully, we can take a real hard look at this."

Personnel Subcommittee Chairman John McHugh, R-N.Y., has long been wary of increased TRICARE costs, due in part to Congress' decisions to expand coverage eligibility over the years. But he is not sold on the proposal, and expressed concern about the increased costs to retirees the country is "deeply indebted to."

"That doesn't say there isn't an enormous problem on the near- and long-term horizon," McHugh said. "Affordability is a critical issue and we've got to begin to get very serious about it, or the program in general will be taking over virtually everything else that we do for active, Guard, Reserve, as well as retired."