Our take on the Budget Proposal: Military Families Win Some and Lose Some

The failure of the Congressional Super Committee to reach a budget agreement last fall triggered automatic penalties for the country, especially the military community. The Department of Defense (DoD) was told they would have to reduce their spending by $487 billion over the next ten years.

On February 13, our Association’s Executive Director, Joyce Raezer, attended budget briefings at the Pentagon to explain the cuts and plans in the Defense portion of the President’s budget proposal.  Unfortunately, the briefings raised more questions than provided answers.

We’ve reviewed the aspects of the DoD proposals that affect military families. It is important to keep in mind that this is just the start of the process. Many debates, discussions, and reviews will take place before any changes are made to the law. In the meantime, here’s an overview of how military families would be affected if the budget were passed today.

• Only 10% of the cuts in the Defense budget will come from personnel and healthcare programs. Included in the reduction is a minimal 0.5% pay raise in 2015. DoD officials said pay proposals could be adjusted if it becomes difficult to recruit and retain a quality force. Logic suggests if pay raises increase, the department will not meet projected savings and will need to cut expenses in other areas.
• New and increased TRICARE fees will be imposed on military retirees. Service members and their families who served in OIF and OEF and those who served in previous conflicts will pay more to enroll in a TRICARE program. Details on the proposed fees can be found here. Increased fees shouldn’t be counted as “savings” when they are a way for DoD to get back some of what it spends on health care.
• The new TRICARE fees will be assigned in one of three pricing categories based on retired pay. While some may favor a tiered system as a way to protect those who receive smaller retirement checks, it will be the first income-based benefit. This change can open the door for additional benefit modifications based on pay. All other retired federal employees pay the same for the federal health care plan; why should the military be different?
• In a bold move, the Defense Department proposed an enrollment fee for TRICARE Standard. This will help DoD count which eligible beneficiaries actually use their TRICARE benefit. However, TRICARE Standard is the earned and promised health benefit, not another insurance plan option. Retirees who enroll in TRICARE Prime do so because it guarantees timely doctor’s appointments and low out-of-pocket costs. TRICARE Standard has no such guarantees. We believe instituting a Standard fee could actually convince those who are eligible to enroll in TRICARE Prime and increase DoD’s costs.

We’re analyzing all the proposals in the FY13 defense budget to determine what they mean for military families. As we do that research, we want to know what you think. Let us know how the proposed changes will affect you. What questions would you want to ask Congress or DoD officials?

Click here for more information on the FY13 defense budget.