Senator opposes steep hikes in Tricare fees, calls for study
Pentagon officials have proposed boost in one-time enrollment fees and recurring co-pays that would save about $735 million in fiscal 2007.
The Pentagon will have to go back to the drawing board on its hopes for hefty hikes in beneficiary costs of the military's health and pharmaceutical coverage, according to the chairman of the Senate Armed Services Personnel Subcommittee.
After a two-hour hearing on the subject Tuesday, Personnel Subcommittee Chairman Lindsey Graham, R-S.C., said, "There is no way a 115 percent increase in co-pays and enrollment fees [in the TRICARE health insurance program] is going to happen in the next two years." The numbers Graham cited are what the military's top brass has said is required to put the program on a sounder financial footing.
Graham did not rule out the possibility that Congress might go along with some "small bump-ups" in the price of the popular coverage for both active-duty members and retirees and their families, nor did he suggest that the subcommittee might come up with some program savings.
But he insisted that any steep increases were off the table until GAO or some other independent analyst studied the problem and made recommendations for curbing program costs.
Last year, according to the Pentagon, the cost of providing the coverage reached $38 billion. Four years ago, the program consumed about 4 percent of DOD's annual budget; last year it ate up 8 percent. The Joint Chiefs of Staff have proposed the big boost in one-time enrollment fees and recurring co-pays that they say would save about $735 million in fiscal 2007 and $11 billion over the next five years.
Several veterans' and retired military lobbies weighed in at the hearing, in some cases challenging the validity of the Pentagon's calculations and in all cases decrying the prospect of slapping such a stiff increase on military families.
"The proposal to raise TRICARE fees by exorbitant amounts has resonated throughout the beneficiary population," said Tanna Schmidli, head of the National Military Family Association. "Seldom has the reaction of service members and families been as strong and strident...even though the proposal would only marginally affect active-duty families or retirees over age 64. Beneficiaries see the proposal as a concentrated effort by DOD to change their earned entitlement to health care into [a private type] insurance plan."
Other witnesses worried that tampering with TRICARE would hurt recruiting and retention of highly skilled military personnel. They all agreed that the Pentagon's numbers on the cost and projected growth of the program were suspect and needed a thorough vetting.
"We do need to verify the costs before we start increasing the fees and deductibles," said retired Marine Lt. Gen. Dennis McCarthy, executive director of the Reserve Officers Association.
On that score, retired Vice Admiral Norbert Ryan, Jr., president of the Military Officers Association of America, said the Pentagon's claim of billions in savings is "grossly overstated" and labeled the proposal for the 115 percent hike in beneficiaries' fees and deductibles "inappropriate and uncalled for."
All of the witnesses insisted there are "other cost-saving options," as the Fleet Reserve Association's national president, Edgar Zerr, put it, and all laid out several recommendations for consideration by the subcommittee.
Graham cautioned the groups that "an erosion of benefits is inevitable" over time as the cost of the program competes with the Pentagon's other needs for military housing, pay increases, new weapons, and peacekeeping operations.