DOD health-cost estimate seen tainting panel's work
By Tom Philpott, Special to Stars and Stripes
Pacific edition, Thursday, February 22, 2007
An assumption in the Department of Defense's 2008 budget request that $1.9
billion will be saved by raising Tricare fees on military retirees next
year
"poisons the water" for the work of the Task Force on the Future of
Military
Healthcare, says a key lawmaker.
The projected savings will reinforce a belief among retiree advocates that
the task force is "stacked" and ready to meet DOD cost-cutting targets,
said
Rep. Vic Snyder, D-Ark., the new chairman of the House armed services'
subcommittee on military personnel.
Snyder leveled that complaint at Dr. William Winkenwerder, assistant
secretary of defense for health affairs, during a Feb. 13 hearing on the
proposed fiscal 2008 defense health budget.
"It was not our intent to poison the water in any way," Winkenwerder
replied. "I hope that's not the case."
However, the $1.9 billion hole left in the defense health budget, he
added,
should be viewed by Congress as a sign of how committed defense leaders,
especially military leaders, are to slowing retiree health costs. Not only
does the budget project $1.9 billion in savings on retiree health care,
Snyder complained, but it ties those savings specifically to the work of
the
task force, which held its first meeting just last month.
Retiree advocates are understandably angry and even task force leaders are
"very concerned," Snyder said.
"The budget is saying flat out a recommendation will be made [by] a task
force whose final re****t doesn't come out until December of this year,"
said
Snyder. "Some of us think that's not very appropriate."
New York Rep. John McHugh, ranking Republican on the subcommittee, shared
Snyder's concern and pressed Winkenwerder to explain what the department
will do if those hefty savings aren't realized.
"Do you have a backup plan or a cut list?" McHugh asked.
"[W]e do have some options that we could take," said Winkenwerder. "As you
would guess, they are fairly dramatic in . their impact."
Winkenwerder denied that the task force had been "stacked" with people who
sup****t raising fees for military retirees. Yet he also expressed
confidence
that task force recommendations will be endorsed by DOD and urged they be
given serious consideration by Congress. Recommendations to control costs
are expected to be in an interim task force re****t due in May.
Critics can argue that Congress ensured the task force was "stacked" by
giving defense officials responsibility for appointing its 14 members and
directing that half be drawn from inside DOD.
Senior defense officials and top military officers, some of whom are on
the
task force, made clear last year they want fees, deductibles and
co-payments
raised sharply for retirees under age 65, their spouses or survivors. The
aim is slow what they see as out-of-control health care spending that is
encroaching on other priorities.
The department a year ago sought Tricare fee increases that, over two
years,
would raise out-of-pocket costs for retirees E-6 and below by almost 50
percent, double them for senior enlisted retirees and triple them for
officers. Beneficiary costs then would be indexed to rise annually by the
percentage increase in health premiums for federal civilian employees.
Defense officials argued that Tricare fees haven't been raised since they
were set in 1995. Officials last year projected their plan would save $735
million in fiscal 2007 and $1.8 billion after a second stepped increase in
2008. But Congress voted to block fee increases for at least a year.
When the fiscal 2008 defense budget was unveiled Feb. 5, Winkenwerder told
Military Update the $1.9 billion savings projected for retiree health care
meant the department was abandoning its call for a two-year phase of
higher
fees and assuming they occur in a single year.
But he said the projected savings really were a "placeholder" for whatever
changes the task force eventually recommends.
Snyder said he has advised task force leaders to ignore the projected
savings and just "do your business. It's not the expectation of Congress
that . your goal is to buy the recommendations of [last] year."
Interviewed after the hearing, Snyder said last year's proposed Tricare
fee
increases, even if endorsed by the task force, "aren't going to happen."
They simply are too steep to be acceptable, he said.
But Snyder doesn't rule out including some Tricare fee increases in the
2008
defense bill if the task force quickly endorses reasonable changes.
"If they come back with specific recommendations in a way that can have a
timely impact on this year's defense bill, of course we will embrace them
if
we can, and [if we] agree with them. But I don't want them to feel any
obligation to fulfill this [$1.9 billion savings target] in the
president's
budget. That line shouldn't have been there," said Snyder.
Meanwhile, other lawmakers are introducing bills to inoculate retirees
from
sharp health care fee increases. The latest was unveiled Feb. 15 by Sens.
Frank R. Lautenberg, D-N.J., and Chuck Hagel, R-Neb. It would limit
Tricare
beneficiary fee increases to no more than the percentage rise in their
compensation. In other words, health care fees for retirees could not
exceed
the annual percentage cost-of-living adjustment (COLA) in retired pay.
Likewise, premiums for reservists under Tricare Reserve Select would be
capped at the annual percentage rise in basic pay.
The Military Coalition, an umbrella group for 35 separate military
associations and veterans groups, endorses the Lautenberg-Hagel bill.
To comment, write Military Update, P.O. Box 231111, Centreville, VA,
20120-1111, e-mail milupdate@[EMAIL PROTECTED]
or visit www.militaryupdate.com
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