Budget proposal raises premiums

Defense Secretary Robert Gates has signaled that the department’s fiscal 2012 budget request to be sent to Congress early next year will include recommendations to raise TRICARE premiums for some beneficiaries.

If past proposals are a reliable guide, the target of higher fees is likely to be military retirees rather than active duty families. The Bush administration had tried for three straight years to raise fees for working age retirees. Congress blocked those efforts.

Defense officials hope lawmakers, facing with mounting federal debt and tightening defense budgets, will be more receptive to the argument that TRICARE fees haven’t been raised since they were set in 1995.

During a Pentagon press conference where he unveiled a host of initiatives to cut “overhead” in defense budgets, including shutting down the Joint Forces Command in Norfolk, Va., Gates said proposals to control burgeoning health care costs will be unveiled in the months ahead.

The issue arose when Gates was asked by a reporter when it would be time to control rising health care costs, either through TRICARE premium increases or reducing plan coverage. “Yesterday,” Gates responded.

“Health-care reform is on my agenda,” he added. It will be part of a new “track” of cost-cutting reforms identified by the Quadrennial Defense Review and endorsed by other reports for curbing defense spending.

Dr. Jonathan Woodson, nominated to take charge of health care policy as the new assistant secretary of defense for health affairs, stayed mum on the hot-button issue of higher TRICARE fees during his Aug. 3 confirmation hearing before the Senate Armed Services Committee.

Asked by Committee Chairman Carl Levin (D-Mich.) how he would address rising health costs, Woodson said, “What we need to do is work with a number of constituents and try and stem rise of that cost.” He referred to more cost-efficient “therapies” and addressing “waste in the way we deliver care because of the culture of medicine. And there’s opportunity to decrease the variability of care that might result in cost savings.”

Sen. John McCain, ranking committee Republican, said Woodson’s major challenge will be getting costs under control. McCain questioned whether he can do it, given the steady rise of national health costs.

Woodson, an Army Reserve brigadier general and vascular surgeon who has deployed in most every recent conflict, is Army assistant surgeon general for force management, mobilization, readiness and reserve affairs.

In his written responses for the committee, Woodson said retirees and their families are 53 percent of all TRICARE beneficiaries and account for 57 percent of the DoD health care budget.

In his defense budget request last February, President Obama called on Congress again to phase in “concurrent receipt” — payment of some military retired pay in addition to disability compensation — for 103,000 “Chapter 61” veterans, those of them forced by service-connected disability to retire short of 20 years.

But the administration disappointed advocates for this change, including Rep. Ike Skelton (D-Mo.), chairman of the House Armed Services Committee, by not identifying new money or else “offsets” from other entitlement accounts to pay for this change. The estimated cost is $5.4 billion over the first 10 years. As a result, neither the House nor Senate version of the defense bill, at least so far, authorizes Obama’s CR initiative.