FRA NewsBytes February 6, 2015

In this issue:
House and Senate Panels Review MCRMC Recommendations
FY 2016 Budget Request given to Congress
Pharmacy Co-pay Increase Takes Effect
Senate Sends Veteran’s Suicide Bill to President

House and Senate Panels Review MCRMC Recommendations
The Senate Armed Services Committee (SASC) and House Armed Services Committees (HASC) held separate hearings this week on the MCRMC report and its 15 recommendations. These are only recommendations and have not been introduced as legislation. FRA submitted statements for these hearings that list the 15 recommendations with comments; the statements are post to the FRA website on our Testimony page. FRA will closely monitor the legislative process and notify members if and when these proposals are introduced as legislation.

One recommendation (#6) that impacts current beneficiaries would replace TRICARE (except for TRICARE-for-Life) with a plan similar to the Federal Employee Health Benefit Program (FEHBP), except that Military Treatment Facilities would be included in the network. Like FEHBP beneficiaries, retirees could choose from a selection of commercial insurance plans. The plan would be administered by the Office of Personnel Management rather than the Defense Department. Beneficiaries would be required to pay 20 percent of all health care costs, and premiums would be allowed to increase every year. Beneficiary family members would not be covered under the plan and would be provided a Basic Allowance for Health Care (BAHC) to cover the cost of premiums and deductibles for an average health care plan. Reserve Component members who are mobilized would also receive a BAHC in lieu of TRICARE coverage. FRA believes that health ca re costs for retirees have, at least in part, been paid for with 20 or more years of arduous military service. FRA does not support or oppose this recommendation at this time, but believes that such a dramatic change to the health care benefit requires a second opinion.


Another major recommendation is to provide a “blended” retirement benefit to future service members and future retirees. The current defined benefit plan after 20 years of service would be replaced by smaller defined benefit plan (from 50 percent to 40 percent) and there would be a new defined contribution plan known as a Thrift Savings Plan (TSP) providing a one percent employer contribution and an employee contribution unless the service member opts out. Any employee contributions would be matched by employer up to five percent of pay.

SASC Chairman John McCain (Ariz.) questioned whether a proposal to overhaul military retainer pay to cover a million more current service members might backfire and discourage long military careers. “Do we have incentive for people to remain in for a career or disincentive?” FRA is also concerned that the proposed TSP will provide a disincentive for service members to serve 20 or more years. Rep. J. Randy Forbes (Va.) referenced the FRA statement when asking if TSP benefit could create a future retention crisis. Rep. Joe Heck (NV), chairman of the HASC Personnel Subcommittee, questioned how the commissioners sought to strike a balance between adopting meaningful reforms while “keeping the faith” of those who serve in uniform.

FRA is scheduled to testify on the MCRMC recommendations before SASC Personnel Subcommittee on February 25.
FY 2016 Budget Request given to Congress
The president has submitted his FY 2016 budget request, which is seven percent above sequestration levels. With projected federal deficits falling, the president urged Congress to move beyond the “mindless austerity” of sequestration-mandated, across-the-boards budget cuts. The departments of Defense, Veterans Affairs and Homeland Security all increased spending by eight percent over FY 2015. The budget intends to slow the growth of military compensation and benefits with provisions FRA opposed last year, including:

  • Capping military pay increases at 1.3 percent for FY 2016;
  • Creating an annual enrollment fee for new TRICARE for Life (TFL) beneficiaries;
  • Merging TRICARE Standard, Prime, and Extra into one consolidated health plan;
  • Requiring all retirees to use home-delivery or a Military Treatment Facility (MTF) for maintenance drugs;
  • Increasing TRICARE annual fees and pharmacy co-pays for retirees under age 65;
  • Creating a small co-pay ($10) for retirees using MTFs;
  • Requiring active duty family members to pay a co-pay for TRICARE services;
  • Reducing Base Allowance for Housing (BAH) payments by six percent; and
  • Cutting the commissary budget from $1.3 billion to $400 million in three years with only stateside commissaries being cut.

The Association will oppose these budget-driven pay and benefit cuts and is reviewing other issues addressed in the DoD budget proposal.

FRA staff (Ben Young and Chris Slawinski) attended the Department of Veterans Affairs meeting on the VA budget. The VA budget increases disability claims processing by $166 million. Much of the VA budget is now on a 2-year (advanced funding) cycle. FRA will closely monitor the VA and DoD budgets as they move through the legislative process.
Pharmacy Co-pay Increase Takes Effect
New copayments for prescription drugs covered by TRICARE went into effect on February 1. The FY 2015 National Defense Authorization Act (NDAA) requires TRICARE to increase most pharmacy copays by $3.

The old and new copay rates are given below:

At the retail pharmacy network (you can get up to a 30-day supply of drugs at retail pharmacies):

  • Copays for generic formulary drugs increased from $5 to $8,
  • Copays for brand name formulary drugs increased from $17 to $20, and
  • Copays for non-formulary drugs increased from $44 to $47.

For home delivery (you can get up to a 90-day supply of drugs through home delivery):

  • Copays for formulary brand name drugs increased from $13 to $16, and
  • Copays for non-formulary drugs increased from $43 to $46.

Drugs from military pharmacies and generic drugs from TRICARE Pharmacy Home Delivery still cost beneficiaries nothing.
Senate Sends Veterans’ Suicide Prevention Bill to President
This week, the Senate unanimously passed the Clay Hunt Suicide Prevention for American Veterans Act and sent it on to President Obama to sign into law. The bill establishes an annual third-party evaluation of the VA’s mental health care and suicide prevention programs, promotes greater collaboration with community mental health resources, and creates a pilot program to attract and retain department psychiatrists. The bill is also designed to combat veteran suicide by improving the quality of care at VA facilities and creating a strong base for future mental health initiatives. FRA, along with other veterans service organizations, has been advocating for quick passage. The bill was introduced in the House on January 7, 2015 and passed the House on January 15, 2015. “This bill had many advocates—none more important than Clay Hunt’s parents—who fought tirelessly to shepherd this legislation through both houses of Congress. Today, we commend them for their work in this effort, and call on President Obama to sign this important bill into law without delay,” said Rep. Jeff Miller, Chairman House Committee on Veterans’ Affairs.