Commission pushes military health and pension reforms
A high-profile commission to overhaul military pay and benefits is pushing to dissolve the TRICARE health care system familiar to troops and their families into a new program and scale back the pensions for service members who stay long enough to retire. But its recommendations, which could eventually lead to savings of $12 billion a year, immediately drew some backlash and face a steep climb on Capitol Hill. Even members of the commission downplayed the urgency of reforming the current pay and benefits system that Pentagon leaders say is getting too expensive and threatening the core of the military. Story Continued Below âItâs my hope all of [the recommendations] would end up in legislation and be adopted,â said Commission Chairman Alphonso Maldon, who would not characterize the current system as unsustainable even when prodded by reporters. The next step: selling the proposals to members of Congress whoâve been skeptical all along of the Pentagonâs warnings that escalating personnel costs were going to eat it alive if not reined it. The nine-member commission, which released its final report Thursday, is pressing for retired service members to get a smaller pension that would equal 40 percent of their salaries after 20 years of service instead of the current 50 percent. But the panel would grandfather current retirees and service members under the existing pension system unless they chose to opt out, meaning the cut would largely affect just new recruits. At the same time, the panel is pushing for a new retirement benefit for all service members: a 401(k)-style savings plan in which the government would contribute. The plan would provide retirement benefits for the 83 percent of enlisted men and women who never reach the 20 years required for a pension, something that disproportionately goes to higher-paid officers, the commission said in its final report. On TRICARE, the panel is recommending the development of a new health care system in which active-duty family members, members of the Reserves and retirees would pick private-sector insurance from a menu of plans. Active-duty family members would be reimbursed for the cost of these private-sector plans through a new Basic Allowance for Health Care. Active-duty service members, meanwhile, would see their health care unchanged: Theyâd continue to receive care from military treatment facilities. And retirees who qualify for Medicare would get to keep the TRICARE-for-life program that picks up health care costs that Medicare doesnât cover. The panel made a number of other recommendations, including the creation of a new joint medical directorate and increased funding for on-base childcare centers. And it recommended keeping the current subsidies for the military commissaries that are popular among service members and their families. So far, the commission has avoided its worst nightmare: knee-jerk statements of opposition. But thereâs not much enthusiasm either for the proposals, despite their projected savings. The commission members, who are set to testify next week before the House and Senate Armed Services committees, portrayed their efforts not as a cost-cutting exercise but as an attempt to modernize a system that been largely unchanged for decades â and has been criticized for allowing little career flexibility. The commissioners also sought to allay concerns about retention, saying their recommendations would leave in place financial incentives to keep best-and-brightest service members in uniform. In a statement, House Armed Services Chairman Mac Thornberry (R-Texas) pledged to âthoroughly studyâ the recommendations âto understand how they will affect our ability to recruit and retain the top quality individuals we need.â The committeeâs ranking Democrat, Adam Smith of Washington state, said heâs âhopeful that, after careful review, the commissionâs recommendations will present Congress with an opportunity to finally begin to address this issue.â The powerful Military Officers Association of America, which has lobbied in recent years to scuttle Pentagon-proposed cuts to military benefits, also vowed to study the recommendations â and notably didnât oppose any of them in its initial response. âWeâll have to evaluateâ the report âto determine what recommendations we can support and which ones require greater scrutiny, such as retirement and health care changes,â said MOAA President and CEO Norb Ryan. And Defense Secretary Chuck Hagel said the Pentagon âwill analyze the commissionâs proposals in full detail.â âWhile the recommendations released today will not affect the budget request that the president will submit to Congress next week, they will inform discussions that DOD will have with Congress over the course of this year,â he said.