The military has long prided itself on the medical and other benefits it supplies members, both active duty and retired. They have been a major selling point for the all-volunteer force. But with new budget austerity pressures, the military has been forced to consider cutting these benefits.
The public has mixed feelings on this, according to the results of an innovative, new, nationwide survey developed by three nonprofit groups, including the Program for Public Consultation, the Center for Public Integrity and the Stimson Center.
Military personnel costs have nearly doubled since the start of fiscal year 2001, according to calculations by Lawrence J. Korb, a Senior Fellow with the Center for American Progress and a former assistant secretary of defense under President Reagan. If the costs are not controlled, Korb says, they will eat away at the military’s budget, forcing vital training and modernization programs to the side.
Dealing with this issue was a challenge for Secretary of Defense Donald Rumsfeld, who opposed expanding TRICARE to National Guard members in 2003 and in 2006 pushed for raised fees similar to what the Obama administration has called for in its latest budget. The problem also haunted Secretary of Defense Robert Gates, who said of the problem in 2010 “Everybody knows that we’re being eaten alive by health care.”
Under the Obama administration’s 2013 budget, non-active military employees in TRICARE, the main health system, would see an increase in co-pays for medicines among as well as enrollment fees for special TRICARE programs. The administration believes these extra fees would save $34.5 billion in discretionary funds and $16.5 billion in mandatory funds over the next ten years.
The President’s budget proposal also includes a 1.7 percent increase in military pay, which would kick in for fiscal year 2015; it is meant to offset some of the new fees.
But House Republicans have indicated they intend to do away with the TRICARE fee increase, and the issue is expected to be a point of heavy debate during budget markups. The issue has also been raised on the campaign trail. Mitt Romney, the presumptive Republican nominee for president, has seized on the TRICARE cuts as a potential political issue. “Right now the president is cutting back on spending. And that’s something that has to happen,” Romney said during a March debate. But he’s only cutting back in the military. He’s going after Tricare. Saying ‘OK, we’re going to — we’re going to raise the co-pays. We’re going to cut the benefits.’ Why is it we go after military families?”
According to the survey, however, increasing the co-pays is supported by a solid majority of the American public — 59 percent. This change, which would not impact active duty military personnel, would save around $3 billion a year. A solid majority of the Republicans surveyed, moreover, expressed strong support for cutting military healthcare expenses and other personnel expenses — expressing a higher preference in many cases for that than cutting other military programs.
But overall, a proposal by the Obama administration to raise the annual premium on the families of military retirees younger than 65 from $520 to $1100 was rejected by those surveyed, 53% to 44%. That plan would save another $3 billion a year. A third proposal, changing the cap on military retirees out-of-pocket costs from $3,000 to $7,500, was also rejected by respondents, 63% to 34%, even though it would save an estimated $11 billion a year.
Health care costs were not the only benefit that survey respondents were asked to consider cutting. Currently, military families receive tax-exempt allowances for housing and food. These allowances are growing at a faster rate than basic military wages. Sixty-one percent of the respondents voted to slow the growth rate of these allowances, which resulted in $6 billion saved a year.
A narrower majority (52 percent) supported changing the pensions of new recruits to save $9 billion a year. Currently, military personnel can retire after 20 years and receive a pension, worth 50 percent of the average of their last three years of salary, for the rest of their lives. The respondents supported changing that pension for new recruits so that it begins only at age 60, and is worth 40 percent of the average of the last five years’ worth of salary.
The respondents also rejected a cap on military pay raises that would have saved $2 billion a year. Overall, respondents to the poll voted for cuts to military benefits of around $18 billion.
Korb, the author for a recent study on military benefits, argues that the Obama budget is not really making cuts to TRICARE, but rather is bringing costs “back into the agreed upon accepted standards.” When co-pays and fees were set in 1996, the government agreed that retirees would pick up 27 percent of the cost, with the government shouldering the rest. But with no fee increases in the ensuing years, the percentage that retirees are paying has dropped to around 10 percent; Obama’s budget proposal would raise it to around 14 percent.
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