Military retirees to pay higher health premiums
Thursday, September 29, 2011
WASHINGTON (AP) — Military retirees will pay slightly more for their health care starting Saturday, and more cost increases are on the way.
Premiums haven’t been raised since 1994 and still will be just a fraction of what civilians pay. Under a change announced by the Defense Department on Thursday, individuals who enroll in the retiree program as of Saturday will pay $260 annually, up from $230, and it will be $520 annually for a family, up from $460.
Retirees already in the program will not see any increase until next year because they have already paid for this year. But “modest annual increases” are planned in the future, Cynthia Smith, a Pentagon spokeswoman, said.
Active duty service members get free health care and that will remain the same. But other personnel changes unpopular with service member may be in the offing due to U.S. budget problems, including changes to the system for retirement pay, which is under study.
Military health costs have ballooned since 2001, and increases announced Thursday were approved in February by former Defense Secretary Robert Gates, who said he was trying to get spending under control. The decades-old health program, known as TRICARE, provides health coverage to some 10 million active duty personnel, retirees, reservists and their families. Its costs have jumped from $19 billion in 2001 to $53 billion, according to estimates from earlier this year.
“We are committed to offering the best possible health care system for our entire military family,” Dr. Jonathan Woodson, the assistant defense secretary for health affairs, said in a statement Thursday. “This modest annual fee increase allows us to responsibly manage our costs in line with other secretary of defense initiatives announced earlier this year.”
Officials have tried previously to raise premiums but were met with resistance from veterans’ groups as well as lawmakers loathe to tamper with benefits of men and women in uniform who have sacrificed for the nation. But the nation’s budget and debt crises have changed that.
Gates particularly singled out working-age retirees — those in their 40s who retired after 20 years in the military and can go on to second careers, meaning they are likely to be able to afford a small increase, he said.
That retirement system is also under a magnifying glass. A Pentagon advisory panel in July created an uproar among troops and retirees by suggesting it should be scrapped and replaced with a 401K-style savings plan. Though the report was preliminary, advisory and nonbinding, Defense Secretary Leon Panetta took pains to put out a statement saying he believed any changes to retirement pay should exempt current troops and retirees.
But Panetta also said the system needed to be looked at, and other defense officials have said everything is on the table as the Pentagon looks for savings.
Panetta also agreed with the advisory group that the retirement system is unfair in that it pays lifetime benefits at about half of base pay, starting immediately when a person retires with 20 years of service, but it pays nothing for those who stay in uniform for 10, 15 or even 19 years.