Tricare users would see out-of-pocket costs rise by $27 billion over the next decade -- through higher pharmacy co-payments at retail drug outlets and a first-ever Tricare for Life annual fee -- under President Barack Obama's $3 trillion plan to address the nation's debt.
The same plan would protect current members from retirement changes but would form a powerful commission to modernize military retirement for future generations. Final recommendations would have to be wholly rejected or accepted. The president and Congress could not make select changes.
The White House debt-cutting plan, delivered to the Joint Select Committee on Deficit Reduction, confirms what advocates for Tricare beneficiaries had feared: They are expected to share in the fiscal sacrifices to be asked of millions of Americans drawing federal entitlements.
Military associations sound equally alarmed by White House recommendations suggesting that key military benefits are too generous and must be brought nearer to what civilians receive.
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"Military service is unlike any other occupations, whether in government or the civilian sector," said Joe Barnes, national executive director of the Fleet Reserve Association. Yet the White House now puts "a tremendous focus on trying to benchmark benefits associated with that service to what's going on in the corporate world."
"We were shocked at the tone of it," said Steve Strobridge, director of government relations for Military Officers Association of America. "It talks about, basically, civilianizing the military benefits package. ... The whole point of the benefit package is to provide an offset for unique conditions of military service. You can't civilianize the package without civilianizing service conditions. If the last 10 years show us anything it's that military conditions are getting worse than when these programs were designed."
Two Tricare features are targeted.
Users of Tricare for Life, the prized supplement to Medicare for beneficiaries 65 and older, would pay an annual fee, starting at $200 in 2013, with adjustments for inflation.
The White House notes that Tricare for Life users now pay only the Medicare Part B premium, $110 a month for most, and pharmacy co-pays. Otherwise they face no out-of-pocket health costs. By contrast, private-sector seniors paid on average $2,100 a year for their "Medigap" policy in 2009.
The annual Tricare for Life fee would save a $6.7 billion over 10 years.
Obama's plan would save another $20 billion across a decade by raising pharmacy co-pays in the Tricare retail network, sparing only active-duty members. Current co-pays "have lagged" behind other plans, it says.
Family and retiree drug costs at retail outlets would move "closer to parity with the most popular federal employee health plan, BlueCross BlueShield Standard, and closer to the health plans that most Americans have from their employers," the White House report explains.
Federal civilians now pay about $45 to get a brand-name drug at a retail outlet. Military beneficiaries pay $9, and it rises next month to $12.
Obama also wants military drug co-pays to rise automatically with costs to the government, thus shifting from a set dollar co-pay to a percentage formula. Co-pays for generic drugs at retail would be set at 10 percent of the Defense Department's cost for the medicine. Sometime after 2013, this would climb to 20 percent. Co-pays for brand names would start at 15 percent of cost and be raised to 30 percent over some yet unspecified period.
In proposing a commission to "reform" retirement, with authority similar to that of the 2005 Base Realignment and Closure Commission, the White House said the current system "is now out of line with most other government or private retirement plans."
Even as associations like MOAA and FRA alerted members to details of Obama's plan, and urged that e-mails and letters of protest flood Congress, the outcome of this fight to protect benefits appeared more uncertain than in battles past, with the real chance changes could become law by year's end.
The unusual structure adopted in August to reach a final debt deal -- with the president and Congress conceding to the joint or "super" committee of 12 lawmakers responsibility to shape a take-it-or-leave-it legislative package by Nov. 23 -- almost certainly handcuffs the influence of lobbyists to derail whatever package of cost curbs the committee's majority embraces.