Military retirees could see increase in health insurance costs

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Total defense health care budget:

SOURCE: Tricare/Pentagon

DAYTON — The Pentagon’s proposal to charge higher fees on retirees enrolled in Tricare, the military’s health insurance program, has angered some veterans, while the Pentagon contends those who retired from the ranks must share more of the cost as expenses escalate under the weight of budget cuts.

Military health system costs have spiraled from $19 billion in 2001 to more than $50 billion in 2011, according to federal figures.

In the next fiscal year, the military has outlined a $1.8 billion cut as part of a projected $48.7 billion health care budget covering 9.6 million people.

The cuts would total $12.9 billion over five years.

To offset the loss, retirees would pay higher enrollment fees based on how much they earn through their military pensions. Retirees and active-duty family members would pay more for pharmacy co-payments, too.

“Budget pressure is the reason these changes are proposed,” said Austin Camacho, chief of the benefit information and outreach branch at Tricare headquarters in Falls Church, Va.

The increases have sparked criticism among some Capitol Hill lawmakers and a backlash from at least one veterans group.

An Obama administration official testified this week in a Senate hearing the higher fees are necessary to avoid cuts elsewhere. Dr. Jonathan Woodson, assistant secretary for defense affairs, has said if lawmakers reject the hikes, 30,000 to 50,000 service members might have to be cut from the force, according to published reports.

Lisa Lewber, 46, of Vandalia, fears the Tricare changes could mean an additional cost of as much as $2,000 a year for her and her husband, Joseph, a retired Navy petty officer who served in uniform for 21 years. The couple has a teenage son.

She said service members were told when they enlisted they wouldn’t have to pay for health care if they stayed for a 20-year-career or longer.

“I don’t understand why they are trying to balance the budget on the backs of retirees,” said Lewber, an Air Force veteran. “I just think there’s other places they can look to trim expenses.”

Veterans who stayed for a full career endured repeated deployments and other sacrifices to earn the benefit, she said.

That’s a point the Military Officers Association of America officials have pressed in arguing against the higher fees to members of Congress who have the final say.

The Alexandria, Va.-based organization has concerns the higher fees are disproportional and retirees expenses would grow exponentially. “Our premise is military people have paid up front by their service and sacrifice for the premiums,” said Kathy Beasley, deputy director of government relations and a retired Navy captain. “We look at our health care fees and our health care benefits as something that has been earned.”

Under the proposal, retirees enrolled in Tricare Prime pay either $460 or $520 a year to enroll in a family insurance program. Depending on income, those costs could rise to between $893 to $2,048 by 2017. Tricare Prime is a managed-care program, similar to a civilian health maintenance organization, that treats most beneficiaries at military facilities, Camacho said.

In 1996, military retirees enrolled in Tricare Prime paid 27 percent of their total health care costs. That fell to 11 percent this year, according to Tricare. Meanwhile, the enrollment fee stayed the same for 15 years.

Those who participate in Tricare Standard and Extra, a fee-for-service plan for working-age retirees younger than 65, pay no enrollment fees. But enrollees could see a charge of $130 for individuals and $250 for families by 2017. Deductibles would also increase.

Tricare-for-Life is a supplemental health insurance program for veterans who must enroll in Medicare Part B, or outpatient coverage, at age 65. They would see enrollment fees rise from no charge today to $158 to $475 a year by 2017, based on income.

Herbert Davis, executive director of the Montgomery County Veterans Service Commission, is a retired Army sergeant first class who spent 20 years in uniform.

Davis, 57, who is single and enrolled in Tricare, said the benefits outweigh the costs retirees would have to pay to an outside insurance company.

“I think even if there is an increase in the cost of Tricare, it is significantly cheaper than the standard or normal charge for health insurance,” he said.

Ohio congressional lawmakers have mixed views.

U.S. Sen. Rob Portman, R-Ohio and a member of the Senate Armed Services Committee, said the military must balance costs as it navigates through budget austerity. “There’s no question the Pentagon has to address health care costs,” he told the Dayton Daily News. “I have some concerns about the way they are doing it, but I realize there has to be some ways to keep health care costs” in check to avoid impacting key parts of the military budget.

U.S. Sen. Sherrod Brown, D-Ohio, said the nation should keep the promises it made to military retirees. “These are typically not wealthy people,” he said in an interview with the Dayton Daily News. “They are already squeezed on gasoline prices and everything else. I think the Department of Defense is wrong on this. Some private companies have broken their promises on pensions and health care and that’s wrong, but government should never do that.”

“As our military is challenged with budget constraints, any proposed changes to Tricare must be justified with costs kept low for our military and their families,” U.S. Rep. Steve Austria R-Beavercreek, said in a statement.