The rising cost of health care in the United States has prompted some of the nation’s most contentious policy debates, with spending on entitlements for the poor and elderly a constant source of tension between lawmakers. One policy that has enjoyed widespread support in Congress is the TRICARE system, which ensures that nearly 10 million active duty personnel, retirees, reservists and their families have access to generous health benefits. But there are currently far more retirees than active duty personnel receiving benefits through TRICARE. And with health costs continuing their upward trajectory, providing these expensive benefits has become something of an albatross around the Pentagon’s neck — setting up an unusual showdown between civilian leaders looking to tame costs through higher fees and deductibles on one side, and congressional lawmakers from both parties who are wary to shift costs onto retired service members on the other.
As Military Times reports, the Pentagon’s push for implementing higher fees goes beyond party lines. The last three Defense secretaries have pushed for enrollment fees on Medicare-eligible beneficiaries and higher enrollment fees that are pegged to national health care inflation — rather than the more generous metric currently endorsed by Congress — for working-age retirees. President Obama is expected to include those requests, as well as requests for higher deductibles on working-age retirees, in his budget on Wednesday.
Civilian leaders have not minced words about what might happen without drastic changes to the way that the Defense Department provides these benefits:
The greatest fiscal threat to the military is not declining budgets, [Defense Secretary Chuck Hagel] warned, but rather “the growing imbalance in where that money is being spent internally.” In other words, money dedicated to health care or benefits is money that’s not spent on preparing troops for battle or pilots for missions.
Hagel echoed his predecessors, Leon Panetta, who said personnel costs had put the Pentagon on an “unsustainable course,” and former Pentagon chief Robert Gates, who bluntly said in 2009 that “health care is eating the department alive.”
In his speech last week, Hagel quoted retired Adm. Gary Roughead, the former Navy chief, who offered a devastating assessment of the future Pentagon.
Without changes, Roughead said, the department could be transformed from “an agency protecting the nation to an agency administering benefit programs, capable of buying only limited quantities of irrelevant and overpriced equipment.”
TRICARE benefits are extraordinarily generous. As the Times notes, the annual enrollment fee for working-age TRICARE beneficiaries is significantly lower than it is for other federal employees, and the program currently imposes no deductibles on beneficiaries or their dependents. That’s a truly unique deal in an era of high-deductible health plans and blatant cost-shifting by employers onto their workers.
But, to state the obvious, the Pentagon is an employer, too — and one that is spending far more money on former service members than on current ones. To civilian officials, the question is not one of a moral obligation to the men and women of the armed forces, but of simple math. Former assistant defense secretary and Center for American Progress senior fellow Lawrence Korb said of Hagel’s budget pronouncement, “He did lay it out that we’re going to have to do something or we’re going to end up like General Motors and spending everything on people not working for us anymore.”
In the meantime, however, Congress may not be willing to risk a political firestorm by hiking veterans’ out-of-pocket costs. Veteran and military groups also argue that such a move could have a chilling effect on enlistment and re-enlistment numbers. “If you don’t take care of people, they’re not going to enlist, they’re not going to re-enlist,” said Joe Davis, a spokesman for the Veterans of Foreign Wars, to the Times. Particularly considering the thousands of young soldiers returning from the waning wars in Afghanistan and Iraq with critical mental and physical health needs, health care spending is bound to be a budgetary problem that hounds the Defense Department for the foreseeable future.