Asking military retirees to pay a bit more for health care is reasonable
“SIMPLY UNSUSTAINABLE.” That is Defense Secretary Robert M. Gates’s assessment of the spiraling cost of the health-care system for military personnel, retirees and their families. Mr. Gates is correct — and he is correct to press for modest increases in premiums paid by those covered by the system, known as Tricare. Health-care costs consume one-tenth of the base-line defense budget — more than $50 billion a year. Costs have tripled since 2001 and are projected to grow to $64 billion by 2015. As the Center for American Progress points out in a new report, the Pentagon is spending as much on health care as on the war in Iraq.
The country owes an enormous debt to service members and their families. Providing good health insurance at a reasonable cost is part of repaying that debt. Active-duty troops receive free health care, and their families receive care at little or no cost, depending on the coverage they choose. Wounded, disabled and needy veterans receive care through the Department of Veterans Affairs. That is as it should be.
But retired personnel and their dependents, who account for the majority of costs, can reasonably be called on for more. Premiums for Tricare Prime, an HMO-like program, have not been raised since it began in 1995; the cost is $460 a year for family coverage. It’s no surprise that retirees often choose Tricare over other group insurance and are using its services at an increased rate.
Meantime, rather than clamping down on costs, Congress has gone in the opposite direction. In 2001, it gave military retirees over age 65, previously ineligible for the program, free “Tricare for Life” to supplement Medicare. It rejected proposals — first from President George W. Bush, then from President Obama — for modest increases in Tricare fees. Now, for the fiscal 2012 budget, Mr. Gates is trying again. He has proposed raising Tricare Prime enrollment fees by a modest $60 a year, to $520, for the families of working-age retirees (those under 65). Had premiums been adjusted to reflect national increases in health-care costs, the charge would be just under $4,000. Civilian federal retirees pay about $5,000 a year for their coverage.
The howls of outrage from veterans groups and their Capitol Hill allies are misplaced. The current proposal does not go far enough. As the Center for American Progress report recommends, Tricare coverage for retirees under 65 should be limited to those below a certain income level or without access to employer-sponsored insurance. Enrollment fees should be increased, with a tiered system based on retirement pay, and they should be pegged to rise, like Medicare premiums, with increases in costs.
Just like other consumers of health care, Tricare beneficiaries should be asked to have some skin in the game, to discourage overuse. The president’s deficit commission recommended modifying Tricare for Life so it would not cover the first $500 in expenses and would cover only half of the next $5,000 — saving money for both Tricare and Medicare.
If Congress can’t manage the small fee increase that Mr. Gates, backed by the Joint Chiefs of Staff, is seeking, it can’t pretend to be serious about controlling the deficit.