Rep. Jackie Speier, a Democrat from California and a member of the House Armed Services Committee, praised the recent work of the Military Compensation and Retirement Modernization Commission. The panel called for offering troops 401(k)-like retirement plans and military families a choice of commercial health insurance plans in lieu of Tricare, among other proposals.
"We've just now have got to inject a little guts into all of us to do the right thing," she said Wednesday during a hearing of the committee's military personnel subcommittee, which received testimony from commission members.
The hearing was the latest in what will be a series of debates on Capitol Hill over the future of military compensation. Members of the congressionally mandated panel have said their 15 recommendations were designed to give troops, military families and retirees more benefits choices while saving the Pentagon an estimated $12 billion a year in personnel costs by 2040.
While the hearing touched on many of the proposed reforms, including retirement, much of the discussion focused on health care. Speier, in particular, sought to downplay the financial impact of the health care proposals to working-age retirees.
Under the panel's recommendations, retirees younger than age 65 would initially pay 5 percent of the cost of a private plan, but the figure would increase 1 percent a year until reaching 20 percent of the premium -- or until they're eligible to switch into Medicare and Tricare for Life.
"It's costing about, let's just say round numbers, $500 a year," Speier said. "A 1-percent increase is $5. I mean, I think we have to pitch this for what it is: You're going to have better health care, you're going to have a bigger network, and it's going to cost you one Starbucks Latte a year. Are you in?"
Commissioner Stephen Buyer responded, "Bingo. Thank you."
Buyer, a former Republican congressman from Indiana who headed the Veterans' Affairs Committee, also noted that working-age retirees paid a bigger share of their health care costs in the early 1990s. "In 1994, when it started, it was a 27-percent premium," he said. "It's eroded to 5 percent."
Commissioners defended their proposal to do away with the three Tricare plans for military families, reservists and working-age retirees while retaining Tricare for Life for elderly retirees. The new health care program, called Tricare Choice, would be similar to the one for federal civilian employees and allow recipients to choose from a list of commercial health care plans.
"Tricare is a broken program," Buyer said, noting that it's only accepted at a relatively small number of health care providers.
"You are going to receive a lot of pressure from those across the river," he added, referring to the Pentagon, "and institutions and the contractors to convince you otherwise ... do not get sucked into the status quo. That's my best counsel to you."
Commissioner Edmund Giambastiani, a retired Navy admiral, was even more blunt.
"Tricare is in a death spiral," he said.
The term is another way of describing how the Defense Department seeks to save money when renewing contracts for the program by restricting or eliminating procedures, reducing the number of coverage zones and making other marginal changes "to capture every dollar," Giambastiani said.
"The bottom line is that service continues to get less and less," he said.
-- Brendan McGarry can be reached at email@example.com.