In a speech Thursday, Defense Secretary Robert Gates proposed a number of cost-saving measures, including "modest increases to TRICARE fees for working age retirees, with fees indexed to adjust for medical inflation."
Many military retirees who now work in the private sector have been forgoing the health benefits their companies offer and opting instead for the TRICARE system. Participant fees were set in 1995 and remain at $460 per year for the basic family plan. The cost for comparable coverage for federal workers is now around $5,000 per year, Gates said.
Steve Strobridge, director of government relations at the Military Officers Association of America, said previous proposed fee increases have been "outside the realm of modest." It's unfair to use the premiums civilian federal workers pay to justify an increase, he added.
"It's a bogus comparison to talk about what military and civilian people pay in cash without talking about military people paying tremendous fees above that in sacrifice and service," Strobridge said. "We just feel that the cash comparison tends to devalue people's service retroactively."
Arnold Punaro, who chaired the Defense Business Board task force responsible for making budget cut recommendations to Gates, said what civilian workers pay for health care could be considered modest, and a TRICARE increase affecting the 1.9 million military retirees would be less than that.
"It's time for people who have been out there ranting and raving about the deficit to put their money where their mouth is," Punaro said. "It'll be a tough sell, but we can't be hypocritical about it."
Strobridge, who has worked with both Republican and Democratic lawmakers to fight TRICARE fee hikes, said Congress will face a conflict between a mandate to reduce spending and empathy for the sacrifices military personnel make while serving.
"We've got to carefully analyze, and I think [Congress] has yet to do so," said Rep. Walter Jones, R-N.C., a member of the House Armed Services Committee who in 2006 sponsored legislation to prevent TRICARE fee hikes. "I would want TRICARE fees to be at the bottom of the list if there are any fee increases. That will be part of discussion and debate … but let's do everything else that we must do to make adjustments before raising TRICARE fees."
The proposed cuts also would affect the size and compensation of Defense's civilian workforce. A two-year governmentwide freeze on civilian salaries, along with a three-year hiring freeze, will save the department $54 billion over five years, Gates said.
"Since the beginning of the fiscal year, we've been operating under a freeze in the number of positions, with very limited exceptions, such as the acquisition workforce within the Office of the Secretary of Defense, the defense agencies and field activities, and the combatant commands," Gates said. "While new requirements may emerge that require further staff support, those needs should be met by shifting personnel from other less important activities within the organization."
In August 2010, Gates announced plans to freeze the number of positions in the Office of the Defense Secretary, Defense agencies and combatant commands, the number of civilian senior executive, general and flag officer positions, as well as political appointments requiring Senate confirmation. The department will eliminate more than 100 general officer and flag officer positions, and eliminate or downgrade nearly 200 civilian senior executive positions, he said Thursday.