Obama Deficit Plan Would Boost Health Care Costs for Elderly Veterans

September 23, 2011 - 10:00 AM
(CNSNews.com) – President Obama’s new deficit reduction plan includes two proposals that would impose new costs on retired, elderly veterans enrolled in the military’s TRICARE for Life health insurance program.

The higher costs would “save” the government an estimated $27.3 billion over ten years by making retired, elderly veterans and their spouses pay more for their health care and prescription drugs.

The proposals drew fire from Republicans, who said that Obama should not try to fix the government’s fiscal problems by going after veterans.

The Military Officers Association of America says it will fight the president’s proposal, which it called “an attack on the fundamental principles that have sustained the all-volunteer military force for the last four decades.”

One of Obama’s proposals (page 21) would require newly-retired elderly veterans to pay a yearly fee to enroll in the Tricare for Life (TFL) program. Typically, when military retirees turn 65, they are automatically enrolled in Medicare, with the added benefit of rolling over their current TRICARE military health insurance into TFL insurance, which acts as a second-payer covering almost all out-of-pocket Medicare costs.

To save the government money, Obama plans to charge elderly veterans a yearly fee for converting their current TRICARE plan into a TFL plan. The administration says this would align TFL with private-sector versions of Medicare supplemental insurance – called Medigap insurance.

“In the private sector, this type of ‘Medigap’ policy would likely require premiums, deduct¬ibles, and co-pays. In 2009, the average annual premium for a ‘Medigap’ policy was $2,100. By contrast, there are no premiums under the TFL programs,” the Obama plan says.

Obama plans to start charging elderly veterans a $200 annual fee in 2013 for TFL coverage, a fee that would increase steadily each year until it reaches parity with the fees paid by veterans under age 65 in the regular TRICARE program

This proposal would end up saving the government -- and costing elderly veterans -- an estimated $6.7 billion over ten years, the plan estimates.

The second proposal would charge all military retirees, elderly and non-elderly alike, new drug co-pays that would make the TRICARE and TFL drug plans more like private insurance.

“This new proposal would move the TRICARE pharmacy program closer to parity with the most popular Federal employee health plan, BlueCross/BlueShield Standard, and closer to the health plans that most Americans have from their employers.”

The plan would end co-pays for generic mail-order drugs and institute higher co-pays for drugs bought at a pharmacy in an effort to “provide an incentive” to veterans to buy the cheaper drugs through the mail, instead of from their local pharmacist.

Shifting retail co-pays from a dollar figure to a percentage would save the government – again by costing veterans – an estimated $20.6 billion over ten years.

Republicans said deficit reduction should not start with war veterans.

“If you try and break the back of this recession on the backs of the military, who’s going to have our back when we’re attacked again,” House Armed Services Committee spokesman Claude Chafin told CNSNews.com. “Let’s look at threats first, and then decide what kind of strategy and what size of a force we’re going to need to meet those threats. And then we [can] make these decisions based on that.

“Let’s not throw a number up on a chalkboard that we want to meet and then look at what we’ve got to cut to get there.”

The Military Officers Association of America says it will fight the president’s proposal, which it called “an attack on the fundamental principles that have sustained the all-volunteer military force for the last four decades.”

“Significant cuts to the crucial incentive packages that sustain a top-quality career force will undermine long-term retention and readiness,” said MOAA President and CEO, Vice Adm. Norb Ryan.

“The military career incentive package must be unique because military service conditions have no civilian comparison, Ryan said. “Military pay and benefits are the elemental foundation of the all-volunteer force, which is what America says it wants.”