Better Health Benefits, Bigger Raises Voted For '09

Active duty and reserve component members can bank on a 3.9 percent pay raise next January as Congress continues to close a perceived military "pay gap" that a Pentagon pay study says no longer exists.

The House Armed Services Committee on May 14 joined Senate colleagues in approving, for a 10th consecutive year, a military pay increase that will exceed private sector wage growth by a half of a percentage point.

Both the House and Senate panels also agreed to block the Bush administration, for a third straight year, from raising TRICARE fees for working-age retirees or pharmacy co-pays under TRICARE's retail network.

Both panels also have directed the Department of Defense to lower premiums paid by drilling reservists and their families who enroll in the TRICARE Reserve Select program. TRS premiums by law are to be set only high enough to cover program costs. The Government Accountability Office recently found that Defense officials had set them too high. Premiums could drop for member-only coverage from $81 a month down to about $47 and for member-and-family coverage from $253 monthly down to about $175.

Another set of health care initiatives, approved so far only in House committee version of the fiscal 2009 defense authorization bill, would add "preventive" health care incentives. Co-pays would be waived or rebates given, for example, to patients who get routine health screen appropriate for their age and gender such as colorectal exams, mammograms, cervical screening, prostate exams, annual physicals or vaccinations.

Only TRICARE Prime patients receiving managed care through military treatment facilities now receive such services with no co-payments or cost-shares. The House bill also would waive costs for smoking cessation programs, and would establish a pilot program to pay a preventive health allowance, of $1000 to a family or $500 to a member, to beneficiaries who keep up on recommended health screens and maintain healthy lifestyles. 

Blocking the higher TRICARE fees sought by the president required lawmakers to find $1.2 billion to plug a hole in the military health budget, the House committee reported. But $345 million of that money, to prevent a jump in drug co-payments, required offsets of "direct spending" on other entitlements payable in fiscal 2009. Under the House committee plan, $45 million of that would come out of the pockets of military retirees by denying them one percent of their next cost-of-living adjustment for one month.

Rep. John McHugh (N.Y.), senior Republican on the personnel subcommittee, branded this part of the solution for sidelining Bush's drug co-payments a regrettable budget "gimmick."  McHugh vowed to find a more acceptable alternative to propose as the bill is debated on the House floor.

Rep. Susan Davis (D-Calif.), chairman of the personnel subcommittee, shrugged off McHugh's criticism, saying difficult choices had to be made. The committee succeeded in backing significant pay and benefits gains, she said, despite the $1.2 billion hole left by a Republican administration in the defense health budget and the funds needed to boost the next pay raise beyond 3.4 percent endorsed by the White House, thus whittling a perceived basic pay gap down to 2.9 percent.

The House committee surpassed Senate colleagues on this issue too, accepting an amendment from Rep. Thelma Drake (R-Va.) to extend the string of above-average military raises through 2013. Even if the full House agrees, this change still would need to win Senate approval to become law.

Ignored by both committees in shaping the 2009 military pay raise was a conclusion made two months ago by the 10th Quadrennial Review of Military Compensation that a military pay gap no longer exists if hefty increases in tax-free housing allowances over the last decade are counted.

But in an election year, with 150,000 U.S. troops still rotating through the unpopular Iraq war, lawmakers choose to ignore the findings of the 10th QRMC. One committee staff members called the report "persuasive" in describing how a large pay gap identified in 1999 not only has been closed but, when total compensation is considered, military pay might now exceed average wages for civilians of comparable age and education by 6.5 percent.

But this same staff member said he never heard the QRMC report even discussed by committee members since its release.

"We're in wartime, we're stressing our troops and [lawmakers] are going to take every opportunity to show their appreciation," he said.

Across the Capitol, in the others armed services committee, a staff member said his bosses aren't "ignorant" of the QRMC perspective. But for now they will continue to compare growth in basic pay that of private sector wages, ignoring gains over the years in housing allowances.

"Is it a perfect measure?  Slap my forehead, 'No.'…But their measure isn't perfect either," he said.  "What we're trying to do here is grasp relative comparability between two very diverse and different systems."

He dismissed the QRMC argument that because housing is a big expense for most Americans, therefore gains in military housing allowances are critical to assessing whether there's a pay gap.

 "The civilian world lives within their culture; we live within a military culture. The military culture is you get your housing," this committee staffer said, whether that housing is provided at no charge on base or through provision of tax-free allowances to be able to rent housing off base.

Besides, he added, the volunteer military is striving to keep its ranks full during a "very, very difficult period" and pay levels are a critical element.

This is no time, he suggested, to declare the pay gap closed and to try to introduce troops to a new method for tracking pay comparability.

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