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 The President's Plan for Economic Growth and Deficit Reduction
Obama proposes TRICARE changes

Posted 9/20/2011   Updated 9/20/2011 Email story   Print story


by Lisa Daniel
American Forces Press Service

9/20/2011 - WASHINGTON (AFRNS)  -- Military retirees would pay an annual fee for TRICARE-for-Life health insurance and TRICARE pharmacy co-payments would be restructured under the deficit reduction plan President Barack Obama released Sept. 19.

"If we're going to meet our responsibilities, we have to do it together," Obama said during a Rose Garden speech to announce the President's Plan for Economic Growth and Deficit Reduction. The plan reduces $4.4 trillion from the $14.7 trillion federal deficit over 10 years through a combination of spending cuts and increased tax revenue.

For the military portion, Obama said the government will save $1.1 trillion from the drawdown of forces in Iraq and Afghanistan, which are to be complete at the end of this year and in 2014, respectively.

The plan includes savings of $6.7 billion over 10 years by establishing "modest annual fees" for members of TRICARE-for-Life, which becomes a second-payer insurance to military retirees who transition to the federal Medicare program upon turning age 65. The change would begin with a $200 annual fee in fiscal 2013.

The plan also includes savings of $15.1 billion in mandatory funds and $5.5 billion in discretionary funds over 10 years by restructuring co-payments for TRICARE pharmacy benefits.

To bring the TRICARE plan more in line with private and other federal plans, the president's proposed plan would eliminate co-pays for generic mail-order drugs, while shifting retail co-pays from a dollar amount to a percentage co-pay. The change would apply to military families and retirees, but not active-duty service members.

These changes will ensure fiscal responsibility without compromising quality care for service members and their families, Pentagon Press Secretary George Little said in a statement released Sept. 19.

Defense Secretary Leon E. Panetta "has consistently emphasized the need to keep faith with our troops and their families," Little said.

"That includes maintaining the highest quality health care for them," he continued. "We will continue to maintain the highest possible health care, but during this period of fiscal belt tightening, we may see modest cost increases in TRICARE enrollment fees and co-pays to sustain the health system."

The changes are necessary to help reduce the deficit and ensure the long-term strengths of the programs, a White House news release issued after Obama's speech said. The changes also would help to level "a measurable disparity" between military retirees and private sector workers, it says.

The statement notes that the administration has expanded GI Bill benefits, job training and veterans' homeless prevention programs, and proposed tax credits for employers to hire veterans.

"Still, as the cost of health care rises and benefit programs across the public and private sectors are being restructured to remain solvent," the release says, "it's important that programs that serve military retirees and veterans are modernized to be able to meet the needs of the future."

The plan also would create a commission to "modernize" military benefits through a process based on that of the 2005 Base Realignment and Closure Commission, the White House release said. Under the proposal, the Defense Department would make a proposal to the commission, which can alter the proposal before sending it to the president. The president may not alter the proposals, but would decide whether or not to send it to Congress. The Congress would have to approve or disapprove without modifications.

"The administration believes that any major military retirement reforms should include grandfathering provisions that ensure that the country does not break faith with military personnel now serving," the statement said.

Obama said the proposal to save $4 trillion "finishes what we started last summer" when he and the Congress agreed to $1 trillion in cost savings. Under the plan, the deficit -- the difference between revenue and spending -- would level out in 2017 where spending is no longer adding to the nation's debt.

While "we are scouring budget for every dime of waste and inefficiency," Obama said, the proposed plan also closes corporate tax loopholes, raises taxes on millionaires and makes changes to Medicaid and Medicare in an effort to help small businesses and middle class Americans, and protects spending on education, science and infrastructure such as roads and bridges.

"We're asking everybody to do their part so no one has to shoulder too much burden," Obama said.

3/2/2015 6:01:11 PM ET
This cutting medical and retirement benefits will most surely end the all volunteer military then what at least we have saved money. And why start new programs when you can not afford what you have now so you say.
Ron, Pennsylvania
7/30/2012 6:26:16 PM ET
Senior DoD and military leaders 500 million for FY2011 Congress says military health care will cost 708 million less than budgeted for FY2012. DOD lied about rising medical costs and wants to rebudget medical funds. We were volunteers so we should be willing to pay for our own healthcare ...right.
Rayford K Brown, Republic of Texas
10/11/2011 10:30:51 AM ET
This sounds reasonable, doesn't it? You all know once it starts it will only go up unless someone is brave enough to put the government on a diet. Say "balanced budget."
Phillip Annis, Stevens Point WI
9/26/2011 3:35:58 PM ET
If we all need to pay our share why not make the senators and congerman pay their fair share on medical as well as Obama
freida lewallen, south carolina
9/26/2011 10:50:03 AM ET
What another cost of living increase for vets another sticking gov noses into where it has no businessLeave our retirement alone.Let the people who recieved all those favors as GREEN companies repay their money.Lets look at what factors are actually being used to determine cost of living.
Mark Shepherd, Maysville NC
9/25/2011 6:25:22 PM ET
The current leadership in washington dc is doing everything they can to hurt the military personnel current and retired.
Scott Sharp, Louisiana
9/22/2011 12:52:15 PM ET
Where is the opposition to this ridiculous proposal Once they start imposing an annual fee it will go up every year My Tricare benefit was one of the major reasons that I committed to stay for 23 years. It is a financial life saver for allowing me to take care of my disabled wife. How are we going to maintain an all volunteer service if we start eroding military benefits
Jim Levine, Massachusetts
9/21/2011 8:22:25 PM ET
200.00 annually is a very small amount. Tricare for life is still a great retirement benefit. We all need to be responsible for getting our government back into good fiscal condition. Getting into a war without raising taxes to pay for it was what helped put us here.
Lynn McCurdy, Spring Lake MI
9/20/2011 9:32:05 PM ET
I say no to the modest annual fees for members of TRICARE-for-Life to the transition to the federal Medicare program upon turning age 65. The change would begin with a 200 annual fee in fiscal 2013 making it unaffordable to pay after Tricare Billing the increase in Co-payments and Annual Doctor Visits. Thank you.
Carlas M Claxton, California
9/20/2011 8:27:14 PM ET
Here we go They promise to leave our old guys retirement alone but that is a lie. We have probably seen our last COLA adjustment that will ever make it all the way to our checks. At the same time they quote increasing cost which are increasing for everything we have to buy to survive as justification for increasing our health care costs. These were promised to us as a lifetime no cost benefit for joining up in a time of war. Does the name Vietnam bring back any memories We are being thrown under the bus to protect tax cuts for businesses and rich friends. I hoped for protection from the Republican agenda by the people who call themselves Democrats in DC. I am now convinced there are no real democrats in DC.
Dan Taylor, Colorado Springs CO
9/20/2011 7:04:16 PM ET
200.00 annual fee for TriCare for Life....NOT NO BUT HELL NOIf he does get that through I will not pay it.
David Henry, Conway SC
9/20/2011 6:13:04 PM ET
Don't believe a word this POTUS says. His numbers don't add up he is a socialist and you will be cheated if not now later as happened when all military members had to wind up paying for health care after it was promised free for life. And wait until you have to deal with the VA. More government bureaucracy. All I can say is get EVERYTHING in writing trust no one and do the minimum time and get out before you get locked into something that is all wrong.
Publius 2012, USA
9/20/2011 3:01:17 PM ET
President Obama wants to help to level a measurable disparity between military retirees and private sector workers. GREAT We will gladly take UAW pension benefits instead.
J. R. Kennedy, Largo Florida
9/20/2011 2:53:32 PM ET
No more cost increases for retired military. It is not warrented. Especially when there has been no COLA increase these last few years.
9/20/2011 2:49:17 PM ET
I cannot believe you are going to mess around with TRICARE. I believe the system now works and no changes are needed where a greater cost share to the beneficiary is warranted.Especially when there has been no COLA for two years and maybe for this year. Why are you comparing tricare costs for to Federal employees etc. We have sacrificed more over the years then anyone else. Reconsider
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