You've probably heard that if the Defense Department has its way, there are big changes coming to how much you pay for Tricare, how much you get paid for Basic Allowance for Housing (BAH), next year's pay raise, the commissary and other quality of life items.
When the Pentagon released the nitty-gritty of its budget proposal yesterday we sat down to scour it for that stuff. You read last week about the sneak peek they gave us. Now we have the details.
As always, please remember that all of the below is a proposal. This stuff has to get past Congress before it becomes law. If it does it probably won't start to impact anyone until late this year.
How Will the 2015 Budget Impact You?Let's break it down.
1. Big Tricare changes may be coming.The biggest benefit change in the 2015 DoD budget proposal is to Tricare. Under the proposal officials want to get rid of the options we currently have -- Prime, Standard and Extra -- and roll-out a single consolidated health plan.
Right now when you enroll in DEERS as active duty you get to pick your poison. If you pick Standard or Extra you are free to use pretty much any doctor you want (although the cost share you pay depends on whether or not you go in-network). You can also self refer to a specialist. And you don't have to use the military treatment facility or deal with their long wait times and difficult appointment system. Many people love Standard for this reason. You pay out of pocket fees for non-preventative visits and generally get your prescriptions filled off base.
If you uses Prime you are assigned to a local military facility if one is available, or pick a civilian provider if one is not. You have to get referalls for specialists. But you pay no out of pocket costs. You might get your prescriptions filled on base for free or you might choose to pay a small fee and do it off base.
If you're a retiree the system works a little bit differently and costs a little bit more. But one thing remains: you can use the military treatment facility -- both doctors and pharmacy -- for free.
Under the new proposal you are going to pay more no matter what starting Jan. 1, 2016. You will not get to choose between Prime and Standard. All military treatment facility use will continue to be free for active duty families. But if you are referred to an off-base specialist (other than for most therapies) you will be paying as much as $25 per visit, depending on pay grade. If you choose to use an off-base primary care doctor you'll be paying as much as $15 per visit for non-preventative care (well child check-ups are "preventative," for example, and will continue to be free).
If you choose to fill your prescriptions off-base the cost will continue to be mostly the same for generics for awhile, but starting in 2015 those will go up a dollar every year until they reach $14 in 2024. For brand name drugs you will start paying more right away. You're paying $17 for a month supply now -- and you'll be paying $26 starting next year if this proposal is approved. That amount goes up about $2 every year until 2024 when it hits $45.
If you're a retiree things are looking even more expensive. Right now if you're a retiree who doesn't use Prime, you pay no yearly enrollment fee. That's going to change under this. All retirees are going to have to pay $286 for individuals or $569 for families per year if this proposal goes through. You'll also be paying to use military treatment facilities for care -- $10 for primary care visits (again, non-preventative) and $20 if you choose to go outside the facility to a network provider.
There are a TON of questions surrounding just how this stuff would be implemented and how it would impact families. We're going to be taking a look at that over the next few days. For now, you can see the rest of the proposed changes in this document.
2. BAH rates are going downUnlike the Tricare fees, which would hit all at once in 2016 with a few exceptions (like pharmacy costs), the proposed BAH decline is a slow death.
Rate protection would stay in place. That means if you're currently receiving $900 a month in BAH, the government isn't going to swoop in and drop it to $800 for you next year. You'll keep getting the old rate until you move. Like with the current system, however, folks new to your area would receive a new, lower rate if one was put in place.
Eventually DoD leaders are looking for military families to be paying 6 percent of their housing costs out of pocket (that's one percent more than was previously advertised). They say they're going to do this by simply slowing the growth or, in some areas, reducing the rate over time. They didn't give an exact timeline other than to say "several years."
It's difficult to tell without more details exactly how big the reduction will be in 2015. Judging by the numbers, however, it looks like the reduction really will be slow. The Army, for example, has only requested $94,000 less in 2015 BAH funds than they have for 2014. If this proposal goes into affect, it looks like rates really will go down slowly, giving us plenty of time to get used to paying out of pocket housing costs.
There are some people for whom this will be a problem. For example, if you're a landlord living out of the area with a mortgage based on the old rate but no rate protection, you're going to be stuck renting to people who aren't willing to pay quite as much as they used to be.
Another thing we don't know is how this will impact those who live on base. Will you also be paying 6 percent out of pocket to the housing company? We're getting more information.
3. Commissary cuts.There were also no big surprises with this issue. Like we reported over the last few months, the DoD plans to gut the commissary's funding by $1 billion by 2017. They are going to start by cutting the operating budget from $1.4 to $1.1 billion for 2015 if they get their way.
The cuts, the proposal said, will reduce the savings for shoppers from the current 32 percent to about 10 percent.
And if the savings aren't as great, the proposal says, or the commissary system shuts down because no one is shopping there anymore -- that's on you.
"The Department will not direct any commissary to close," the proposal says. "In the end, patron usage of the commissaries will determine the savings and their competitive advantage."
The commissary proposal doesn't just require a stamp of approval for the budget, though. Congress is going to have to change the law to allow them to raise prices and sell other products.
There's been speculation in the past that the commissary would start selling alcohol or stock generic items, and the proposal seems to validate some of that.
"The plan includes expanding the variety of products sold in stores, reducing transportation costs, and raising prices to cover the cost of operating commissaries," it says.
In the end they want to the commissary system to run more like the Exchange system.
"The Department proposes applying the successful post and base exchange business model to the commissaries," it says.
4. Military family support.The proposal makes it pretty clear that military spouse and family support -- such as job help -- remains a priority. Nonetheless they are still planning cuts in some areas and maintaining the same funding in others. For example, they are scrapping plans to replace some Department of Defense Educations Activity (DoDEA) schools, opting instead to do remodels. They are also slowing down funding for things like non-medical counseling with the idea that there won't be as many people around to use them by the time the 2015 budget hits thanks to the drawdown.
One thing this budget does not include is a overhaul of the DoDEA system -- a proposal that was, reportedly, on the table and ditched at the last minute.
5. Smaller pay raise.There really aren't any new details on this one. The budget includes a proposed 1 percent military pay raise -- the same amount we received this year, but way less than 1.8 percent we've received in years past. You can read more about that here.
There is some good news in here. If you're in the Navy you're going to see as much as a 25 percent increase in Sea Pay -- the first such plus-up in more than a decade.