Shadow Government

Congress should heed Gates and chiefs on defense health

Nearly five years ago, testifying alongside and in support of my former Pentagon colleague, then-Under Secretary of Defense David Chu, I pleaded with the House Armed Services Committee to do something, anything, about spiraling defense health care costs. At the time the Defense Health Program exceeded $40 billion, more than the entire defense budgets of most of our allies -- and of many of them combined. The program had more than doubled over the previous five years, spurred by two major Congressional decisions that took effect on Oct. 1, 2001, just as the war in Afghanistan was about to commence.

The first of these decisions was to create TRICARE for Life, a program to supplement Medicare benefits for military retirees; the second eliminated co-pays for active duty personnel. The Joint Chiefs had lobbied hard for both programs, arguing that it was imperative that military personnel and their families be fully cared for. Until Sept. 30, 2001, Medicare-eligible retirees were accepted only on a space-available basis at military treatment facilities. As a result, the plan was not that attractive to many military retirees. Overnight, however, TRICARE became one of America's top premium health insurance plans: TRICARE for Life meant that TRICARE was now the supplemental health insurer for all Medicare eligible retirees, and also covered costs that were not provided by Medicare.

But congressional action did not stop there. In Fiscal Year 2003, Congress expanded the TRICARE Prime Remote program, which covered military families that lived more than fifty miles, or an hour's drive, from the facility where the military member was stationed. Congress also expanded TRICARE eligibility for reserves, who were playing an increasingly arduous and critical role in the wars in Afghanistan and Iraq, by offering continuous benefits to those called to active duty since 9/11.

With pharmaceutical costs increasing more than five-fold over the past decade, with medical care outpacing inflation by four percent annually, and with co-pays remaining frozen at mid-1990s levels, more and more military members and their families have come to realize just what a good deal TRICARE really was. They have signed up accordingly, even as more people have become eligible for TRICARE coverage. On Oct. 1, 2001, there were 1.5 million persons eligible for TRICARE for Life; five years later that number was 1.8 million. Today it exceeds two million, and continues to climb. Spending on beneficiaries under the age of 65 has also grown: from 33 percent in 2006 to about 39 percent, or a ten percent increase projected, for the current fiscal year. Meanwhile the Congress, egged on by veterans' organizations, has absolutely refused to increase co-pays even by the minuscule rate of inflation nor to increase TRICARE's annual fees, which amount to only $460 for TRICARE Prime, the most popular insurance option that closely resembles an H.M.O.

Civilian employers, as well as at least a half-dozen state governments, have also come to recognize what a great deal TRICARE offers their military retiree employees -- many of whom join private industry as soon as they retire from the military, some as young as age 38. Recognizing that they would be contributing to health care plans for as long as three decades, employers naturally encourage military retirees to sign up for TRICARE. Since TRICARE costs are generally so much more economical than what most employers' plans offer, it takes little encouragement to get retirees to sign up.

Veterans' organizations argue loudly that retirees deserve all they get; and in a sense that is true. But by expanding the number of those eligible for benefits and minimizing the cost to receive those benefits, Congress is short-changing other elements of the defense budget, whether operations -- including training, procurement or research and development programs, that are equally crucial for the troops. During the earlier part of this decade, many Democrats otherwise opposed to defense spending, supported health benefits; if procurement had to be reduced, that did not worry them. Republicans went along, despite pleas from Bush administration officials, and other analysts who recognized that defense health had evolved into nothing other than an entitlement program, akin to Social Security or Medicare. As a result, the long range prospects for meeting even shrunken defense requirements are gloomy, with budget deficits likely to eat away at the defense top line.

The secretary of defense has engaged the deficit commission on the defense health issue. And the joint chiefs have finally come to realize that health care is devouring the rest of the defense budget, and has been doing so for a decade. They too now concede that it is not too much to ask those on active duty to increase their co-pays by the minimal amount that an inflation-based increase would represent. Nor is it outrageous to ask that the family free for TRICARE Prime, be raised from its current minimal level.

It is time that the Congress, and the veterans' organizations that egg it on, take note of the other needs of those who are in active service today, and those who will serve tomorrow. A defense budget that does not begin to rein in defense health costs will overwhelm our ability to buy the guns of today, develop those of tomorrow and furnish the means to operate and maintain them. And that will do neither our troops nor our nation any good now or in the days to come.

AFP/Getty Images

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