Gates defends plan to raise some Tricare fees - Navy News | News from Afghanistan & Iraq - Navy Times

Gates defends plan to raise some Tricare fees

Health care coverage rates for working-age military retirees would increase about 13 percent under a controversial plan unveiled by Pentagon officials Monday.

The fee increases, which will require approval from Congress, are part of Defense Secretary Robert Gates’ broader plan to cut $7 billion from the military health system’s budget during the next five years.

The proposal does not change health coverage fees for active-duty members and their families or for Medicare-eligible Tricare for Life beneficiaries.

The current Tricare Prime annual enrollment fees of $230 for an individual retiree and $460 for a family have not changed since Tricare was created in 1996. Gates’ proposal would increase next year’s fees to $260 per year for an individual and $520 a year for a family.

The health care fees were just one component of the Pentagon’s 2012 budget request released Monday, which includes a $553 billion base budget and $118 billion for overseas contingency operations that would go directly toward the ongoing missions in Afghanistan and Iraq, budget documents show.

The baseline defense budget request marks the largest ever but is an uptick of less than 1 percent from last year’s request for $548 billion. It also includes a modest 1.6 percent pay increase for troops.

Military spending has risen steadily since 2001 and now exceeds its peak during the Cold War-era spending boom in the 1980s, when adjusted for inflation. But the Pentagon is coming under political pressure to rein in costs. In a nod to concerns about the growing national debt, Gates also released a five-year plan to reduce budget growth and eliminate annual spending increases by 2015.

Gates said at a Pentagon briefing Monday that the budget is the latest step in his effort to curtail spending and preempt efforts by Congress to impose even more severe cuts.

“These budget decisions took place in the context of a nearly two-year effort by this department to reduce overhead, cull troubled programs and rein in personnel and contractor costs — all with the purpose of preserving the fighting strength of America’s military at a time of fiscal stress,” Gates said.

In January, Gates announced plans to cut several major weapons programs and shift $100 billion of expected internal “efficiency” savings over the next five years into “high-priority areas such as the development or purchase of unmanned intelligence, surveillance, and reconnaissance assets; more ships; a new ground combat vehicle; the Advanced Extremely High Frequency satellite; and the stealthy F-35 Joint Strike Fighter,” according to budget documents.

This year’s war funding request for $118 billion is about 25 percent less than last year’s request of $160 billion. In part, that reflects current plans to withdraw all combat troops from Iraq by January 2012.

War funding for operations in Afghanistan assumes troop levels will remain steady at about 98,000 through the end of the fiscal year in September. Although President Obama has predicted the start of a troop drawdown in July, Gates said the budget planners did not account for a significant troop reduction.

“It makes more budgeting sense to do this conservatively, and budget on a straight line” based on fiscal 2011, Gates said.

“We have no idea what the size of the drawdown is going to be” since the pace will be based on conditions, he said. “That is not to say that we will have 98,000 troops” in Afghanistan at the end of fiscal 2012.

A recent poll suggests a majority of Americans favor defense spending cuts as part of a broader effort to reduce the federal deficit and national debt.

This year’s defense budget — and the debate about the size of cuts — has split Republicans on Capitol Hill, pitting those who prioritize a strong defense against budget hawks who want to see the federal budget reduced across the board.

The Republican chairman of the House Armed Services Committee issued a statement Monday that tried to balance those two forces.

“The federal government has a spending problem, and Republicans in Congress intend to be part of the solution in curing this uncontrollable appetite,” said Rep. Buck McKeon, R-Calif.

However, he said, “We cannot take our eye off our national security requirements and the obligation the federal government — and Congress specifically — has to provide for the common defense.”

Curbing health care costs is a key component of Gates’ effort to reduce overall defense spending growth. This year’s health care budget for troops, families and retirees now tops $50 billion and accounts for nearly 10 percent of all Pentagon spending. The medical budget was $19 billion just a decade ago.

The proposed fee increase of 13 percent on retirees’ enrollment fees was significantly smaller than past proposals and far less than many veterans groups expected.

Starting in 2013, annual fees for retirees using Tricare Prime coverage would increase over time at the rate of medical inflation, which typically rises more rapidly than the broader inflation rate and cost-of-living adjustments.

Other proposed changes to Tricare include pharmacy co-pay fees. Tricare would eliminate the $3 drug co-pay fee for generic drugs obtained through the military’s mail-order pharmacy system, while fees for drugs purchased through neighborhood retail pharmacies will increase by up to $3.

Health officials hope the shift will encourage more people to use the mail-order service, which is significantly cheaper for the military, compared with retail pharmacies.

The changes are likely to be controversial, which is why Pentagon officials underscored the fees that will not change, including out-of pocket costs for active-duty service members and their families, fees and co-pays for medically retired service members or survivors of service members, Tricare Standard coverage fees and the catastrophic cap for all plans.