January 27, 2012
"Doc Fix" Talks Begin - Slowly   In December, Congress agreed to a two month patch to avoid a 27% cut to Medicare/TRICARE physician reimbursement rate (doc fix), along with an extension of the payroll tax holiday and certain unemployment benefits through February.

 As part of this short term deal, Congress agreed to establish a 20 member conference committee to hash out a long term extension of these three issues when Congress returned to Washington in 2012. On Tuesday, that panel of legislators met for the first time. Aside from appointing Rep. Dave Campo (R-MI) and Sen. Max Baucus (D-MT) as chairman and vice-chairman respectively, the panel didn't accomplish much in their first meeting. In the opening dialog both parties appeared to be entrenched along partisan lines much as they were in 2011. The Democrats continue to insist that increased tax revenues must pay for part of the extension, while Republicans refuse to consider new taxes and want to pay for the extension solely through budget cuts.

 One interesting development is that both sides seemed open to using projected war savings as one way of paying for the fix. Congress has until February 29 to come up with an extension, but it seems negotiations have a long way to go. Thankfully the panel is supposed to meet again next week to continue the dialog. If you haven't already done so, please send your legislators a MOAA-suggested message asking them to pass a long term fix for to Medicare/TRICARE physician reimbursement rate.

January 24, 2012
Medicare/TRICARE Cut Looms

Legislators began to trickle back into Washington this week, and they face a full plate in 2012.

A long term debt reduction plan remains the most divisive and elusive issue, and it will likely dominate the proceedings of the 2nd session of the 112th Congress. If Congress can come to a debt reduction agreement this year it can stave off the automatic debt reduction trigger - sequestration - that would lead to massive cuts in defense spending, and almost certainly disproportionately whack the military community with the brunt of spending cuts.

In the more immediate future Congress will need to pass a long term "doc fix" without which Medicare/TRICARE payments to doctors would be cut by more than 27%. The current extension expires at the end of February.

Now's the time to kick off your 2012 grass roots advocacy efforts by sending your legislators a MOAA-suggested message asking them to pass a long term "doc fix" and protect access to health care for military families and retirees.

January 24, 2012
Grappling With DoD Healthcare Costs   The Pentagon is putting the final touches on a soon to be released report providing a new perspective on the rising cost of military medical care. Most importantly the report focuses on options to save money without shifting costs to beneficiaries through fee increases. Former Defense Secretary Robert Gates repeatedly bemoaned that "health care costs are eating the Defense Department alive."

 The fact is that over the past decade, U.S. health care costs have grown substantially, and the military health system’s costs have been no exception. The Pentagon reported that health care costs have more than doubled from $19 billion in 2001 to $52.5 billion requested for fiscal year 2012. After more than ten years of war and the associated costs of readiness and force health protection, some of the cost-growth is understandable. But there are also tremendous inefficiencies and duplication in the military health care system. According to former Maine Governor John Baldacci, who was appointed to provide the review and an independent assessment of the military health system, "We need to bring things under control and change the way we are doing business." He believes the design of the current military medical infrastructure has not kept pace with the rapid changes in healthcare delivery. "Instead of placing the rising costs of TRICARE and military medicine onto the beneficiary, the system inefficiency should be addressed first," stated Baldacci.

 MOAA finds this approach refreshing, but we'll need to see the final recommendations before we can jump on board.

January 6, 2012
Troops-Pay-Healthcare Cuts Coming    On Thursday, President Obama and Secretary of Defense Leon Panetta presented an outline that shifts greater attention to the Pacific theater while reshaping the uniformed services to become smaller, more agile, and cheaper in the years ahead. The eight page report, Sustaining U.S. Global Leadership: Priorities for the 21st Century, was short on specifics of just how the defense department would carry out the $450 billion in cuts over the next 10 years (and potentially another half trillion dollars under sequestration) and neither the President nor the Secretary were willing to provide any real details.

 Panetta outlined that the cuts would be made in a way that would follow four overarching principles:

•  Maintain the world's finest military;

•  Avoid hollowing out the force;

• Generate savings in a balanced manner with everything on the table, including politically sensitive areas;

•  Preserve a high quality All-Volunteer Force and not breaking faith with our men and women in uniform or their families.

 Panetta went on, stating the "country is at a strategic turning point after a decade of war and, therefore we are shaping a joint force for the future that will be smaller and leaner, but will be agile, flexible, ready, and technologically advanced."

The specifics of their proposal likely won't be known until the President submits his budget request in mid-February. But it was abundantly clear that there would be major changes to nearly all facets of defense programs and forces – including end strength and personnel costs. A considerable force drawdown is certain over the next decade – particularly for the Army and the Marines. Pay and health care cuts are also likely part of the plan as the report calls for "reducing the growth of compensation and health care costs." It's safe to assume that some sort of pay freeze or reduced annual pay raises and health care fee increases will make its way into February proposal. Panetta acknowledged in his opening statement that "savings...will likely provoke opposition from parts of Congress, industry, and advocacy groups." And he's correct. There's no doubt that government spending needs to be curbed to reduce our nation's debt, but MOAA is concerned that these cuts, coupled with sequestration, will put a disproportionate burden on those who have already sacrificed so much in service to our nation. Additionally, MOAA believes the Pentagon plan has their priorities reversed.

The new strategy garners big savings from personnel programs and troop cuts, yet is relatively silent on any savings from eliminating redundant programs or improving management and cost overruns of high-profile programs. Hopefully, the President's Budget submission will contain such improvements – but we're not holding our breath. We'll provide more details when they become available.  

December 17, 2011
Your Healthcare at Risk    After delaying almost all of its essential work until the last two weeks of the year, Congress has scrambled to pass a defense bill, pass annual appropriations, and extend unemployment benefits. But fixing the biggest threat to your family’s healthcare access – stopping the January 1, 27% cut in Medicare and TRICARE payments to doctors – seems to have slipped down on legislators’ priority list. This is a huge deal. Everyone in Congress wants to stop the cuts, but they're still bickering over how to pay for it, and how long they can afford to delay the cut. The Republican House-passed payroll tax extension bill included a two year fix, but Democrats opposed to offsets to pay for the bill, which included an even lengthier freeze of federal workers' pay, among other things.

 With time running short, it's time to send your legislators a MOAA-suggested message asking them to work across party lines and reach a quick agreement to avoid a 27 percent cut that would devastate military and Medicare beneficiaries' access to health services.

December 17, 2011
Defense Bill Passed Early this week, House and Senate leaders worked out an agreement on the FY2012 Defense Authorization Act (H.R. 1540).   By Thursday, both the House and Senate had passed the compromise version, and it's expected to be signed by the President as soon as this weekend. Among other provisions, the legislation would:

•  Authorize a 1.6% military pay raise

• Limit the percentage increase in TRICARE Prime enrollment fee in any year to the percentage growth in military retired pay

• Enhance authority to call up the Reserves for certain missions

• Authorize early retirement and voluntary separation incentives to reduce the need for involuntary separations during the coming force reductions

•  Bar denial of reenlistment based on a medical condition that a medical board has evaluated and deemed as not disqualifying for continued duty

•  Establish the Chief of the National Guard Bureau as a member of the Joint Chiefs of Staff

• Provide $45M in assistance for civilian schools in which military dependents are enrolled

•  Enhance the Yellow Ribbon Reintegration Program for wounded warriors and their families

•  Safeguard reemployment rights for Guard members ordered to full-time duty under state orders

•  Authorize a death gratuity and related benefits for Reserves who die during an authorized stay at their residence during or between successive days of inactive duty training

•  Require GAO to review effectiveness of programs aimed at promoting military spouse employment

•  Require GAO to review effects of extending space-available travel eligibility to certain survivors and gray area reserve retirees

•  Require a DoD report on the cost of expanding the Homeowner Assistance Program to help more servicemembers who are "upside-down" on their mortgages

 Unfortunately, the final legislation did not retain the Senate-passed provision to eliminate deduction of VA survivor benefits from military Survivor Benefit Plan annuities.

December 4, 2011
President Obama Mulls Military Benefit Penalties

The Pentagon has sent the White House its proposed plan for cutting $450 billion from the defense budget over the next 10 years. Ominously, Pentagon budget leaders say the plan focuses on personnel accounts more than weapon systems to achieve the bulk of the savings. It reportedly includes significant cuts in force levels, pay, and retirement and healthcare benefits, particularly in the form of higher healthcare fees.

MOAA objects strongly to this wrong-headed effort to impose major new financial penalties on the military community that already has sacrificed more for our country than any other group of Americans. Most retirees already have lost thousands in retired pay as a result of past budget cuts that depressed military pay (and subsequent retired pay) by as much as 13% or more. Hundreds of thousands of disabled retirees continue to fund their own disability compensation by forfeiting part or all of their earned retired pay. Tens of thousands of military widows continue to forfeit part or all of their earned military SBP annuities to fund modest VA survivor payments. More than a half-million current retirees served on active duty during the past decade of war that has imposed such unprecedented sacrifices of deployment, family separation and physical and psychological wounds.

The President and First Lady have gone out of their way to acknowledge troops' and families' sacrifices. Yet they now have in their hands a Pentagon plan to make military families the first targets of punishment for the government leaders' own financial sins.

Where is the sense of outrage at the inconsistency between Defense and Administration leaders' words and deeds?

If you believe, as MOAA does, that military beneficiaries should be last (not first) in line to suffer financial penalties for government leaders' decades of mismanagement, please send the President, Vice President, and Defense Secretary this MOAA-suggested message, urging them to reject making military people programs absorb a large share of defense budget cuts. 

November 29, 2011
Oppose McCain TRICARE Fee Hike

The Senate is expected to finish action on the FY2012 Defense Authorization Act (S. 1867) this week. One of the amendments to be considered soon is a proposal by Sen. John McCain (R-AZ) to significantly increase TRICARE Prime enrollment fees over time.

Previously, the full House of Representatives and the Senate Armed Services Committee approved language to specify the percentage increase in Prime fees can't exceed the retired pay COLA percentage in any year. The McCain amendment would eliminate the COLA cap and let the Pentagon hike fees by some unspecified index of health cost growth (estimated by DoD at 6.5% per year). Over time, the McCain amendment would increase fees by hundreds of dollars a year.

Time is short, and we need phone calls to fight this inappropriate fee hike. Please use MOAA's toll-free Capitol Hill Hotline (1-866-272-6622) and ask the Capitol operator to put you through to your senators' offices (NC - Senators Burr and Hagan).

Please give this short message to the staffer who answers the phone:

"I'm a constituent, and I want my senator to OPPOSE Sen. McCain's defense bill amendment #1230 that would impose further increases in military TRICARE fees."

If you get a busy signal, please try again in a few minutes.

November 22, 2011
Defense Bill Amendments on Tap

Last week we reported on the Senate Armed Services Committee’s update to its version of the FY2012 Defense Authorization Bill. Almost immediately thereafter, the bill was brought up for action by the full Senate, generating a flurry of hundreds of proposed amendments. The Senate is scheduled to tackle these amendments – and possibly finish action on the defense bill – next week. That means MOAA members need to act fast to weigh in to support a number of amendments that would help military families...and oppose one that would hit many hard in the wallet over time.

 Amendments MOAA supports include:

•  Sen. Bill Nelson's (D-FL) amendment to end the deduction of VA death benefits (DIC) from military SBP annuities

• Two amendments offered by Majority Leader Harry Reid (D-NV) to ease compensation inequities for disabled retirees

•  Sen. Barbara Boxer's (D-CA) amendment urging the Pentagon to provide servicemembers access to flexible spending accounts to pay out-of-pocket health and dependent care expenses with pre-tax dollars, just as federal civilians and all corporate employees can

• Sen. Carl Levin's (D-MI) amendment to authorize early retirement and other authorities to ease inequities during the coming force drawdown

•  Sen. Frank Lautenberg's (D-NJ) amendment to acknowledge in law that career military people pre-pay extraordinary premiums for their healthcare through decades of service and sacrifice

 But MOAA was shocked and disappointed at an amendment offered by Sen. John McCain (R-AZ) that would backtrack on the position previously approved by the Armed Services Committee that the percentage increase in TRICARE Prime enrollment fee should not exceed the percentage increase in retiree COLAs. McCain's amendment would delete that protection and tie future increases to a Pentagon generated index of health cost growth that would raise fees by an estimated 6.5% per year. Over time, that increase would cost enrollees many hundreds of dollars a year. Please act now by sending your legislators a MOAA-suggested message expressing your views on key defense bill amendments.

November 22, 2011
Crucial Week

This is a crucial week for the military community, as the so-called "Super Committee" is supposed to offer its recommendations by Wednesday on initiatives to reduce the deficit by $1.2 trillion over the next 10 years. We know that the Defense Department, the White House and Senate Armed Services Committee leaders have endorsed significant health care fee hikes for TRICARE beneficiaries of all ages, as well as reviews of options to curtail the total military compensation and retirement package.

 Last Wednesday, at a meeting with Senate Democratic leaders, including Super Committee co-chair Sen. Patty Murray (D-WA), MOAA thanked them for what they are doing for veterans and for their efforts to support military families. But said we've been shocked and disappointed at how those expressions of support are being contradicted by recent White House and congressional proposals to cut back and civilianize military healthcare and retirement programs -- including significant enrollment fees for TRICARE for Life and pharmacy copays of $40 or more for all family members, retirees and survivors.

 While defense officials assert health costs are "eating them alive", they've done little to meet their own cost management responsibilities…ignoring billions in savings opportunities to be realized from more efficient management, ignoring repeated studies that urged combining redundant service and contractor systems, and failing to effectively promote the cost-saving mail-order pharmacy program. While evading their own oversight responsibilities, defense and Administration leaders have blamed beneficiaries and sought to shift significantly more costs to patients. The hard fact is, MOAA told the Senate leaders, the Pentagon and the Executive Branch have historically resisted almost every significant "people program" initiative, and it's been Congress that has had to ensure military people are fairly treated.

 As the Super Committee nears its reporting deadline (or risks automatic budget cuts if it can't agree) and as Congress takes up the FY2012 Defense Authorization Bill, it's essential for MOAA members and other concerned members of the military community to let your legislators know your thoughts. Please act today and send them this MOAA-suggested message urging rejection of proposals to raise health care fees on military beneficiaries until the Pentagon first fulfills its own responsibilities for effective and efficient program management. Your active grassroots participation…and spreading the word to get others actively involved...is the only way we can help ensure the sacrifices of the military community for our country are fairly recognized.  

November 18, 2011
MOAA, AMA Push Doc Fix

This Veterans Day, MOAA and the American Medical Association (AMA) joined forces to ask Congress to step up and stop a 27 percent cut in Medicare/TRICARE physician payments to protect health care access for seniors and America's military families. Congress has until January 1 to pass a fix.

TRICARE ties its physician payment rates to Medicare, so the scheduled 27 percent cut would hurt the nearly 10 million military family members who rely on TRICARE for their health care needs.

"This payment cut is the number one threat to military beneficiaries' health care access," said MOAA President Vice Admiral Norb Ryan, Jr., USN-Ret. "Having just returned from visiting with our troops in Afghanistan earlier this month, I know the last thing our deployed servicemembers should have to worry about is whether their sick spouse or child will have a difficult time getting the health care they need."

Physician payments under Medicare and TRICARE have been nearly frozen for a decade, leaving a 20 percent gap between payment updates and the cost of caring for seniors. A drastic cut of 27 percent is the largest ever scheduled and will force many physicians to limit the number of TRICARE and Medicare patients in their practice.

Use our alert system to send your legislators a MOAA-suggested message asking them to find a long term fix to this recurring problem. 

October 31, 2011
Three Frights for Halloween Unemployment and the economy are still a problem, the national debt continues to grow, and so does the number of major, unsolved issues on Congress' plate. We're confident America will rebound from these challenges in the long term, but in honor of Halloween we take a look at three scare-worthy issues:

 Medicare/TRICARE Payment Cuts: It's back. The flawed statutory formula which determines Medicare and TRICARE payments to doctors is scheduled to cut payments to physicians by almost 30% on January 1 unless Congress intervenes. Allowing these cuts to go into effect would be devastating to access to health care for millions of Americans including much of the military community. No one in Congress wants to see that happen, but they keep squabbling over how to pay for a fix. The longer they wait the more difficult it gets to fund even short-term fixes, and we'll likely be in for more brinksmanship in the coming months if Congress keeps delaying the cuts one or two months at a time. Send your legislators a MOAA-suggested message asking them to act now to pass a fix.

 The Super Committee and Sequestration: The Joint Select Committee on Deficit Reduction (Super Committee) has until November 23 to propose a way to trim the national debt by $1.2 trillion, and Congress has until December 23 to vote on that proposal. If the committee fails to agree on a proposal, or if Congress rejects it, an automatic trigger mechanism called sequestration will cut spending across the board. Defense spending will be hit particularly hard – accounting for 50% of the cuts. This $600 billion in defense cuts would come on top of the $350 billion in cuts already agreed upon earlier this year. Defense leaders are on the record as saying that this level of cuts would be catastrophic and could "hollow out" our military.

 No Defense Bill: With the legislative calendar winding down and major unresolved issues piling up in Congress, some again worry whether this may be the first year in decades that Congress fails to pass a defense authorization bill. Should that happen, it would be a major setback to a number of programs and a disruption to important retention bonuses. The House has passed its version of the bill, but the Senate still hasn't set aside a specific time to consider this crucial piece of wartime legislation.

October 23, 2011
Senate Leaders Open Door for Cuts   Last week's update included summaries of recommendations from House Armed Services Committee Chairman Rep. "Buck" McKeon (R-CA) and Senate Armed Services Committee Ranking Member Sen. John McCain (R-AZ) to the co-called "Super Committee" that must identify $1.2 trillion in budget savings before Thanksgiving. We since have received a copy of Senate Armed Services Committee Chairman Sen. Carl Levin's (D-MI) letter to the Super Committee.

 Levin's letter, like McCain's, supported White House proposals aimed at making military benefits more like civilians', by imposing a significant enrollment fee for TRICARE For Life, raising TRICARE pharmacy copays as high as $40, and convening a commission to curtail the value of the military retirement system. Levin went a step further, saying, "I support the President's proposals, and....suggest that the scope of the commission be expanded to encompass all aspects of military compensation, including the current system of basic pay, allowances (including the housing allowance), special and incentive pays, and health care, as well as the tax treatment of the various components of military pay." Like McCain, Levin said that the current force should be grandfathered against retirement changes. He also said that future increases in the TFL enrollment fee should be tied to whatever index is used to increase the TRICARE Prime enrollment fee.

 MOAA is shocked and dismayed that the leaders of the Senate Armed Services Committee, in contrast to the inputs from the House Armed Services Committee, have embraced initiatives whose stated purpose is to reduce the difference between military and civilian benefits. The past decade of war has underlined more than ever that military service is radically different from civilian work experience, and the military retirement and healthcare package is the primary career incentive for top-quality people to endure those extraordinary sacrifices for 20-30 years. We're pleased that House Armed Services Committee Chairman Howard "Buck" McKeon's letter to the Super Committee spent two pages expressing similar concerns about the longer-term dangers of undermining this core career incentive package.

 MOAA President VADM Norb Ryan's (USN-Ret) October 20 letter (PDF) to the 12 members of the Super Committee re-emphasized the importance of the McKeon inputs

October 1, 2011
MOAA Fights Administration Proposals

MOAA has gone on the offensive against new Administration proposals to make military retirement and healthcare programs more closely mirror plans for civilian workers.

In previous updates, we cited our initiatives to generate hundreds of thousands of messages and letters to Congress, and especially to the 12 members of the congressional "Super Committee" charged with coming up with a plan by Thanksgiving to reduce the deficit by $1.2 trillion.

This week, MOAA sent letters to every member of the House and Senate Armed Services Committees, urging them as the congressional experts and institutional memory in this area to remind the Super Committee that military retirement/healthcare programs are core career retention incentives and are essential to sustain military readiness.

MOAA sent similar letters to the 12 Super Committee members, expressing our grave concern that some in the Administration and Congress view these programs as simple sources for savings, without regard for the hard-learned lessons of the 1970s, '80s, and '90s about what happens to retention when core compensation incentives are eroded.

MOAA is appalled that the Administration proposal explicitly states a goal of making military retirement and health care more like those available to civilians, apparently oblivious to their primary purpose of inducing top quality people to serve decades in uniform under arduous conditions civilians don’t experience.

October 1, 2011

Why OMB Shouldn't Drive Health Policy

One perplexing part of the Administration's proposal to raise TRICARE pharmacy costs would change retail copays to a percentage of DoD's cost for the drug rather than the current flat-dollar copay.

For FY2013, the proposed copay would be 15% of the drug cost, and that would rise to 30% in a few years.

MOAA did some additional research to see what the percentage-of-cost methodology would mean for some specific medications – and found some disturbing things.

Among the most expensive medications are those for treatment of cancer, hemophilia and multiple sclerosis. Astonishingly, a 15% copay for those medications would amount to about $2,000; $5,000; and $6,600, respectively. Do your own calculations for a 30% copay.

As a practical matter, all of these would quickly bounce against the annual catastrophic expense cap of $3,000 per year, which many patients with these diseases already bump into. But changing the copay structure in this way would hit many of them with a $3,000 bill up-front rather than stretching it out over months or a year. And if the catastrophic cap were raised, as some have proposed, that bill could soar much higher.

Another concern is that a 15% or 30%-of-cost copay would dramatically raise the cost of medications for conditions like asthma, high cholesterol, high blood pressure, and diabetes.

At the 15% level, copays for those medications would range from $17 to $36. Double that for the 30% copay.

Such changes fly in the face of the preventive medicine initiatives touted by DoD and Congress, which depend on the use of medications to prevent chronic conditions from developing into catastrophic and costly hospital care.

Studies show that even modest copays deter some patients from taking needed medications, so MOAA has urged elimination of copays for these medications.

By using the TRICARE pharmacy program as a cash cow to generate savings, the Office of Management and Budget would undermine preventive health policy and put many more military beneficiaries’ lives at risk.

That's nuts.

September 22, 2011

Special Message from MOAA's President VADM Norb Ryan, Jr.

On Monday, the Administration put out its plan to cut the deficit by $3 trillion over the next 10 years, including specific proposals for $27 billion in cuts in the military retirement and health care package. See MOAA President VADM Norb Ryan Jr.'s special message on this important issue.

September 19, 2011
Funding Bills Bring Defense Cuts   This past week Congress took up two funding bills that could become platforms for budget cuts. The House Appropriations Committee introduced a Continuing Resolution (H.J. Res 79) which will fund the government until November 18. Current FY2011 funding expires on September 30. Since none of the 13 departmental appropriations bills has yet been enacted, Congress must pass a continuing resolution (CR) to prevent a government shutdown and continue operations until the appropriations bill are finally passed.

The CR continues government funding at $1.043 trillion – a 1.4% cut from the FY2011 funding level. This amount was agreed to by the Congress and the White House last July when the Budget Control Act of 2011 was passed. On Tuesday, the Senate Defense Appropriations Subcommittee recommended freezing DoD spending at $513 billion for fiscal 2012, cutting funding for several weapons systems and reducing $5 billion in funding for Afghanistan operations. This is $26 billion less than President Obama requested and $17 billion less than the House-passed Defense spending bill (H.R. 2219). The Senate version would meet targets for overall Defense spending in fiscal 2012 as required in the August debt deal.

 Appropriations Committee Chairman Daniel Inouye (D-HI) said the reductions reflect the realities of "this austere fiscal climate…while some of the cuts will be considered tough, we believe they are not only fair but prudent". The bill does still provide a 1.6% military pay raise and roughly $40 billion for DoD health care programs.

September 3, 2011
Congress Returns…and They're Looking at You!

Congress will reconvene Tuesday, Sept. 6 – kicking off a three-month frenzy to find $1.2 trillion in budget cuts.

Under the provisions of the budget-cutting law enacted in early August, a "Super Committee" of six U.S. senators and six U.S. Representatives must come up with a proposal by November 23 to save that much over the next 10 years, and that proposal will get an "up-or-down" vote by Congress, with no amendments allowed. If they don't do that, automatic cuts will take effect – with half the cuts coming from the defense budget.

Everything is on the table, including troop levels, weapons, military and federal civilian retirement, COLAs, health care, commissaries, and more.

The time for your action is now.

You can either help MOAA defend the military community and the key programs that sustain long-term retention and readiness, or you can stand by while other well-funded special interests work their persuasive ways at your expense.

But the most powerful voice of all is constituent mail, and volume counts! Now is the time to tell your legislators – repeatedly – how important these programs are to the military community by sending MOAA-suggested messages to your senators and representative.

August 16, 2011
Visit Your Legislators  Congress is in recess during the month of August through Labor Day.  After a difficult struggle in Washington to come up with a deal to avert a government default on its national debt, your legislators are back home reconnecting with their constituents. That includes you and your fellow MOAA members. While they are home in their district offices, contact them about the following three key issues:

•  protecting our troops and their families from budget-driven cutback

•  resisting the undermining of crucial military career incentives

• stopping the 30 percent cut in Medicare/TRICARE payments to doctors

Your grassroots support is needed on each of these key issues. Visit your legislators in their district offices, and let them know your and MOAA’s concerns. Visit MOAA’s website and link to fact sheets on each issue.

July 24, 2011
Quote of the Year

"The heat doesn't bother me but our Government sure does!"

-Unknown Individual-

July 22, 2011
Could You Handle a 5%-20% Retired Pay Cut?

If you're following the ongoing debt ceiling/budget negotiations (and you should be), you know multiple plans have been offered by various individuals or groups to cap federal spending or require a balanced budget. Those sound reasonable in concept (how can a balanced budget not be a good thing?). But how much do you understand about how they would affect you?

In many cases, the specifics are vague...either because they have yet to be worked out, or because it's inconvenient to have constituents understand exactly what kind of pain would be involved before there's a vote. In some cases, proposals have been pretty specific. In others, impacts have to be inferred by doing some math.

To start, let's look at the "Cut, Cap and Balance" legislation (H.R. 2560) that was passed by the House of Representatives on Tuesday by a vote of 234 to 190 – and then blocked in the Senate this morning by a 51 to 46 vote. Among other things, that legislation envisioned capping federal outlays below 20 percent of Gross Domestic Product (GDP) by FY2017. For comparison, federal spending currently represents about 24% of GDP. For FY2014 and subsequent years, H.R. 2560 would explicitly exempt military personnel accounts, military (but not federal civilian) retired pay, TRICARE For Life, Medicare, Social Security and veterans' benefits from cuts.

But a separate section citing exemptions for FY2012 lists only Social Security, Medicare, veterans' benefits, and net interest. Spending on non-exempt "mandatory spending" programs for FY12 would be capped at $680.7 billion – an apparent 21.7% cut below the $828.6 billion requested in the Administration's FY2012 budget for those programs. While the Senate's blocking vote rendered the issue moot, the potential for large one-time program cuts in FY2012 is still disturbing.

One of the most modest plans is the Corker-McCaskill budget cap bill (S. 245) that would phase in reductions at a more moderate pace, limiting FY2013 spending to 25% of the FY09-11 average GDP, with further reduction in later years. It would allow no exemptions. That would require a 5% cut in FY 2013 outlays for retired pay, TRICARE For Life, and SBP, for example, with cuts escalating each year – to 19% by FY2021. Giving up COLAs for five years would be a head start to meet those goals, but more would be needed – perhaps rolling back some concurrent receipt payments. A 5% cut in TFL would require something on the order of a $350 per person annual TFL deductible. For SBP, it would require several years of COLA forfeitures, plus maybe rolling back recent payments to SBP-DIC widows or reinstituting some level of benefit reduction upon receipt of Social Security.

Initiatives that would cap spending at lower percentages of GDP would impose far more severe cuts. For example, the balanced budget amendment (H.J. Res 1) introduced in the House would cap federal outlays at 20% of GDP. The Judiciary Committee subsequently amended it to reduce that to 18%. Neither version would exempt any spending category, allowing the ceilings to be waived only in years when war is formally declared, or Congress passes a joint resolution if the country is engaged in armed conflict that causes "an imminent and serious military threat to national security."

Another proposal endorsed by a group of senators calling themselves the "Gang of 6" includes initiatives similar to those proposed by last year's deficit commission. They would dramatically reduce military retirement value for new entrants, require holders of Medicare supplement policies (including TFL) to absorb an extra $3,000 per year ($6,000 per couple), and raise TRICARE fees for retired military families under 65 by up to $2,000 a year or more, and freeze military pay raises, among other things.

MOAA President VADM Norb Ryan, Jr. has written a letter to House Armed Services Committee Chairman Howard "Buck" McKeon (R-CA) thanking the Chairman for expressing strong objections to the "Gang of 6" plan.

You can add your voice to protect the interests of the military and veterans community by sending a MOAA-suggested message to your elected officials.

July 8, 2011
Ask Congress to Protect Troops' Pay
Bills pending action in both the House and Senate would ensure continuation of military members' paychecks in the event that Congress' inaction causes a government shutdown.

The bipartisan bills, H.R. 1297 and S. 724, called the "Ensuring Pay for Our Military Act of 2011," were introduced by Reps. Louie Gohmert (R-TX) and Jack Kingston (R-GA) and Sens. Kay Bailey Hutchinson (R-TX) and Bob Casey (D-PA), respectively.

MOAA strongly endorses these bills. Troops in wartime shouldn't have their pay cut off because Congress doesn't do its job. And they shouldn't be used as pawns in politicians' budget brinksmanship games. Click on the two bill numbers above to send MOAA-suggested messages encouraging your legislators to co-sponsor the applicable bill. 

July 2, 2011
Key Committee: Whack Commissaries

Among the bills approved by the Senate Veterans Affairs Committee this week was the "Caring for Camp Lejeune Veterans Act of 2011" (S. 277), sponsored by Sen. Burr (R-NC), the senior Republican on the Committee. The bill would authorize VA health care for former military family members and veterans and certain family members stationed at Camp Lejeune between 1957 and 1987, when the water at the base is acknowledged to have been contaminated with carcinogens.

MOAA indicated its support for the bill and other pending measures in a letter to Committee Chair Sen. Patty Murray (D-WA) and Sen. Burr.

But that was before the committee voted unanimously, without notice or hearing, to fund the care by eliminating the federal subsidy for military commissaries and directing consolidation of all DoD commissaries and exchanges.

MOAA strongly opposes this sneak attack on the military benefit package.

First, the Veterans Affairs Committee has no jurisdiction over and no knowledge of DoD commissary and exchange systems, which are under the purview of the Armed Services Committee.

Second, they propose virtually dismantling the commissary system without any hearings or other effort to assess the adverse impact of such a dramatic cut to a core military benefit. There are good reasons why the Armed Services Committees, who actually understand the commissary and exchange programs, have ardently rejected similar proposals for the last four decades.

Third, they seek to poach DoD funds to pay for VA health care at a time when DoD personnel budgets already are under threat.

MOAA supports expanding VA care to cover Camp Lejeune veterans, but the Veterans Affairs Committee needs to find another way to fund it besides raiding the military commissary system. Make no mistake, without the federal subsidy, military commissaries would eventually go out of business, as prices would have to rise, and savings to customers would be lost. The commissary is one of DoD’s most cost-effective people programs. Every dollar of the subsidy translates to nearly three dollars of benefit value to patrons (and considerably more than that for lower-grade enlisted families). Where else can the Pentagon get that kind of compensation bang for the buck?

Use MOAA's suggested message to urge your senators to reject this attack on military commissaries. 

June 24, 2011
Military Retirement on the Chopping Block?

Once again, the military retirement system is coming under the scrutiny of budgeters and deficit reduction task forces. This time the assault comes from various fronts – from outgoing Secretary of Defense Robert Gates and incoming Secretary Leon Panetta to Vice President Joe Biden. Earlier this year Gates stated, "Everything is on the table" for budget cuts. Panetta used the same line during his recent nomination hearing before the Senate Armed Services Committee, urging more significant, program-specific changes rather than an across-the-board, salami-slice budget cutting approach.

Tasked by President Obama with finding over $400 billion dollars in savings over the next 10-12 years , Gates has become a bit more specific on where some of the savings may be achieved – specifically the military retirement system. Gates has criticized the "one-size-fits-all" 20-year retirement structure and has directed the Defense Science Board to establish a working group to develop alternative options. In his final hearing before the Senate Appropriations Committee last week, he noted, "70-80% of the force does not stay until retirement but leave with nothing," endorsing an early vesting system.

Even more ominous, multiple media reports have indicated military retirement cutbacks could be in play in ongoing deficit-reduction talks between administration and congressional leaders, headed by Vice President Joe Biden. Most current proposals are based on recommendations of the 2009 10th Quadrennial Review of Military Compensation (QRMC), which included:

• Converting to a civilianized 401(k)-style system under which full retired pay wouldn’t be paid until age 57-60

• Authorizing the services to make variable annual retirement contributions depending on changing retention and skill requirements

• Vesting retirement benefits after 10 years of service

The last major revision to the military retirement system was in 1986 when Congress passed the so-called REDUX system as part of an earlier budget-cutting drill.

REDUX entailed far smaller cuts than the QRMC envisions. Under that plan, post-1986 entrants were to receive 40% of high-three-year average basic pay (vs. 50%) at 20 years of service.

In contrast to the advocacy of current Defense leaders, then-Secretary Caspar Weinberger warned Congress that REDUX cuts would cause serious future readiness problems by undermining retention.

He was proven right. A little over a decade later, Congress had to repeal REDUX when the Joint Chiefs of Staff complained it was hurting career retention. And that was in peacetime. Think what you will about the 20-year retirement system, MOAA believes it's the primary reason retention hasn't imploded over the last 10 years of unprecedented strains on career servicemembers and their families. The problem with proposals to cut overall military retirement costs while also implementing an expensive new 10-year vesting plan is that there's only one place for that money to come from – the pockets of those who stay for a full career. If you tried to build a plan to slash career retention, it’s hard to conceive a better way than taking lots of money from people who serve a career in order to pay more to people who separate early.

Imagine the impact if the QRMC proposals were in effect in today's wartime environment. A 10-year soldier facing a fourth or fifth combat deployment would have a choice between (a) taking the vested military retirement and leaving to pursue a civilian career or (b) having to serve decades longer (with who knows how many more deployments) before being eligible for military retired pay at age 57-60. What do you think would happen to retention then? Especially knowing the services let very few people serve that long – but force nearly all out of uniform between their early 40s and early 50s.

Advocates for these initiatives seek to sugar-coat them by saying they wouldn't affect anyone now serving, but would only apply to new entrants. That also was true of the REDUX system, and we know how that turned out. The only thing grandfathering the current force does is let retirement-cutting leaders evade responsibility for their ill-advised actions – by deferring the inevitable retention disaster for a decade and dumping it on their successors.

MOAA believes it's essential to avoid repeating past mistakes that traded temporary budget relief for major national security risks. Please use MOAA's suggested message to urge Administration, Defense, and congressional leaders against jeopardizing future retention and readiness through ill-advised military retirement cutbacks. 

June 17, 2011
New Pay, TRICARE Proposals

The Senate Armed Services Committee approved its version of the FY2012 Defense Authorization Bill Thursday night. The proposed legislation includes a range of personnel and compensation initiatives, including a MOAA-endorsed statutory limitation on future TRICARE fee increases. Here's a list of selected provisions:

•         1.6% military pay raise for 2012
•         Statutory limitation that the percentage increase in TRICARE Prime fees for FY2013 and future years will not exceed the percentage increase in military retired pay
•         Permission for modest increases in some TRICARE fees for FY2012: TRICARE Prime enrollment fee would rise from $230/$460 per year (single/family) to $260/$520; retail pharmacy copays would rise $2 or $3, depending on the medication; copays would be eliminated for generic drugs purchased via the TRICARE mail-order system; no change in brand-name medications via mail-order
•        Authority for service secretaries to call reservists to active duty for up to one year for preplanned and budgeted missions
• ·         Prohibition of barring reenlistment based on medical conditions that a physical evaluation board has considered and found the servicemember fit for duty
•          $30 million in Impact Aid support for schools with significant populations of military children
•         Authority for services to develop job training programs to prepare servicemembers for civilian employment
•         Additional voluntary separation and retirement incentive authorities to assist services experiencing force reductions, including authority for a one-time "retirement bonus" for officers in selected specialties who volunteer to retire
•          Enhanced requirements for Yellow Ribbon Reintegration Programs to adopt best practices and improve collaboration
•          Requirement to pro-rate hostile fire and imminent danger pay on a daily rather than monthly basis
•          Extension of requirement for DoD surveys of provider participation in TRICARE Standard
•          Exclusion of TRICARE providers from consideration as government subcontractors (a recent Department of Labor ruling on this has caused some providers to drop TRICARE)
•          Requires Uniformed Services Family Health Plan enrollees who turn 65 in FY2012 and future years to transition to Medicare and TRICARE For Life, but encourages DoD and USFHP to develop options for TFL-eligibles to continue in USFHP. Note: this provision only applies to new enrollees in FY2012 and future; all current enrollees (of any age) are grandfathered

The next step in the process is consideration of the defense bill by the full Senate, which could take place next month. 

May 25, 2011
This week, the House of Representatives is considering amendments to the FY2012 Defense Authorization Act (H.R. 1540).

One key amendment is #215, offered by Rep. Robert Andrews (D-NJ). The Andrews amendment would:

a. Eliminate the disability offset to military retired pay for all 100% disabled military retirees, regardless of years of service;

b. Eliminate the accounting rule that denies early retirement credit for thousands of National Guard and Reserve members whose active duty service spans more than one fiscal year; and

c. Increase the special allowance for Survivor Benefit Plan annuitants subject to the VA survivor benefit offset (from $90 to $125 for FY2013 and from $150 to $175 for FY2014).

While these changes would not entirely fix the problems in these three programs, the Andrews amendment offers the only opportunity in the House this year for at least some incremental progress.  The amendment is fully paid for through establishment of additional controls on internet gambling.

Please send your U.S. representative a MOAA-suggested message urging them to support the Andrews amendment.

May 25, 2011
Worry About the Flood, Not the "Camel's Nose"

Some rail against the proposed $5 per month TRICARE Prime enrollment fee increase as the "camel's nose under the tent." They seem to think that by opposing any increase we can actually "control the camels." In that context, there's a whole herd of camels coming, whether we like it or not. But MOAA thinks that's the wrong metaphor.

The more relevant comparison is to the Mississippi flood. It's not a matter of negotiating to stop the flood...or to stop the first inch of the flood to prevent the rest from coming.

It's a matter of building a defense to try to limit the damage when the truly big water comes. Once the heavy rains hit the Midwest (i.e., now that we've built up such a horrendous national debt and the country and the Congress are showing an ever-intensifying budget-cutting mood), the flood is coming to the lower river valley and delta whether we like it or not. You can rail against it all you want, but that's not going to stop the rising river.

What MOAA is trying hard to do is build at least some kind of levee where none now exists, and recognize that we're going to have to accept a little spillage in trying to provide the best protection we can to the most people. From that perspective, there's absolutely nothing in current law to provide any limiting guidelines at all on adjusting TRICARE fees. That leaves us at the mercy of budget pressures every year, and those pressures are building to levels that simply will not be resistible without some additional lifeline. So we must – must – get something in law we can point to as a reason to recognize that military health care is a special case.

That's why we believe it's so important to support the House Armed Services Committee's proposal to recognize - in law - that career military people already pay very large, up-front premiums for their health care in retirement through decades of arduous service and sacrifice, and that this must be considered in assessing their cash fees. Based on that premise, the Committee would impose a statutory limit that TRICARE fees can't rise in any future year by a percentage that exceeds the percentage growth in military retired pay.

If we're successful in getting those provisions in law, can that guarantee we won’t get swamped by further changes a few years downstream when the whole country is facing draconian cuts across the board? No.

But it has a whole lot better chance of having a positive effect than just hollering "we oppose any rise in the water" or "we have to oppose the first inch in the rise or it will just keep going up." To us, such a stance ignores the reality of the current situation and fails to recognize how much worse the budget situation is going to get -- very soon.

MOAA is about taking constructive action to build a levee against the coming flood, not just hollering against the rising river. Doing nothing for another year only puts the military community at ever-greater risk.

May 15, 2011
By Col. Steve Strobridge, USAF-Ret. Byline date May 13, 2011