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House panel set to block increase in Tricare premiums

By Lisa Rein,May 03, 2011

A Walter Reed employee gives a sign for another wounded soldier to be loaded… (Linda Davidson/THE WASHINGTON…)

A House panel plans Wednesday to prohibit any increase in health-care premiums for working-age military retirees, thwarting — again — a push by the Pentagon to hold down costs by raising fees as soon as Oct. 1.

But the long debate over the military health program known as Tricare is likely to continue for months as Congress wrangles over whether to risk offending one of Washington’s most powerful constituencies to address the military’s exploding health costs.

The personnel panel of the Armed Services Committee also plans to approve a 1.6 percent raise for service members that would take effect Jan. 1, the same increase in the Obama administration’s defense budget for next year.

The Defense Department also would be required to reduce its growing military health costs by consolidating medical commands in the armed services. Also scheduled for passage Wednesday is a congressional review of the cost of having contractors provide medical treatment for the military, another potential path to saving money.

The proposal by Rep. Joe Wilson (R-S.C.), chairman of the personnel panel, would block any fee increases for retired service members who are still working, continuing a prohibition passed by Congress in recent years.

Tricare premiums have not changed in 16 years, but the costs of the health-care plan are exploding. The Defense Department’s total health-care budget is projected to hit $65 billion in five years. The department declined to say how much of that cost would be attributable to Tricare. The higher fees the Pentagon has proposed for the Tricare program’s popular HMO are part of a Pentagon effort to slash personnel costs by $7 billion.

When the Pentagon unveiled its budget in February, it asked 586,000 military retirees to pay $520 a year for family coverage, up from $460. The increase was more modest than Defense Secretary Robert M. Gates had proposed in three previous years. All were dead on arrival in Congress, opposed by service groups who said low health-care costs were a reward for service members’ sacrifices.

Wilson and his counterpart in the Senate, James Webb (D-Va.), vowed to oppose any fee increase this year, reflecting the view of many service groups. The Senate Armed Services Committee is not expected to take up the defense budget until June.

But Wednesday’s House vote still needs to clear that chamber’s full Armed Services Committee, which is scheduled to vote on the defense budget on May 11. Rep. Howard P. “Buck” McKeon (R-Calif.), the committee chairman, supports the administration’s plan.

“There has not been a [Tricare] increase since 1994,” McKeon spokesman Josh Holly said. “He does not want to see a dramatic increase in rates. But he also believes now might be the time for a modest increase.”

“We still think the Tricare issue is up in the air,” said Mike Hayden, deputy government relations chief for the Military Officers Association of America, among the most influential service members groups. “Our biggest concern right now is the conflicting information we’re getting.”

The officers association testified at Capitol Hill hearings this spring that it would accept a modest fee increase, but it wants to tie future increases to the cost of inflation, traditionally about 3 percent. The Pentagon has proposed tying future increases to growth in health costs, closer to 6 percent.