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Military facing cuts to health care insurance in FY2013

Ernie Shannon's picture

In a time of steep cuts in the Pentagon budget for FY2013 the Obama administration is proposing to trim military health care benefits beginning late this year.

The 2013 budget that begins funding the United States government in October, if approved by Congress, calls for a defense budget of $677.7 billion that represents a four percent decrease from 2012. More significantly, the administration wants to save up to $260 billion in defense spending during the next five years and $487 billion over ten years. To accomplish the cuts, the new budget calls for military families and retirees to pay much more for their health care. It includes saving $1.8 billion from the Tricare medical system in the 2013 budget and $12.9 billion by 2017. For the individual or family, the cuts in military health care translates into a 30 percent to 78 percent increase in Tricare premiums in the first year. In the proceeding years, the increases amount to 94 percent to 345 percent.

Tricare was formerly known as the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) and is a health care program of the United States Department of Defense Military Health System. It provides health benefits for military personnel, military retirees, and their dependents, including some members of the Reserve Component.

Pentagon leaders have been slow to respond to the budget proposals that impact military health care, but recently General Martin Dempsey, chairman of the Joint Chiefs of Staff, said that military leaders plan to review the issues. “I want those of you who serve and who have served to know that we’ve heard your concerns, in particular your concern about the tiered enrollment fee structure for Tricare in retirement. You have our commitment that we will continue to review our health care system to make it as responsive, as affordable, and as equitable as possible.”

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Causing some of the backlash in the military is the fact that civilian employees of the federal government have been spared cuts in their health care programs. Whereas federal workers will see their medical premiums remain stable, a retired Army colonel with a family currently paying $460 annually for health care could pay $2,048.

Defense Secretary Leon Panetta on Wednesday defended the Pentagon’s plan to increase healthcare fees for military personnel as a senior House Republican called the increases another Obama administration “hit” on the military.
“On Tricare costs for health care, we have recommended increased fees,” Panetta said during a hearing of the House Budget Committee.

“We have not increased those fee levels since 1990,” he said. “We’ve looked at … the retirement area with the proviso that we grand-father those benefits so that those that are serving will not lose the benefits that were promised to them, but at the same time try to look at what reforms can be made on retirement for the future.”

Military pay will not be cut and pay raises are planned for the next two years but limited in later years, he said.

Administration officials are supporting the cuts and saying the Pentagon, one of the largest federal agencies in the government, needs to shoulder a significant burden of spending cuts. The full implementation of the Affordable Care Act, the administration says, will ultimately offer everyone better health care coverage options, including for members of the military.