Military Pay and TRICARE Under Fire

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The first shots over the bow were fired ear­lier this spring when Sen. Webb (D-Va.) floated the idea that mil­i­tary pay and ben­e­fits were unsus­tain­able. A DoD advi­sory panel later rec­om­mended increas­ing TRICARE pre­mi­ums and end­ing the trend of annual across-the-board mil­i­tary pay raises which out­pace the civil­ian sec­tor pay increases.

Webb recently called for reduc­ing troops and replac­ing the across-the-board raises with tar­geted bonuses and raises based on com­bat assign­ments and/or job spe­cial­ties. Webb’s rec­om­men­da­tions drew heavy fire from mil­i­tary com­mu­ni­ties. But that is noth­ing com­pared to the bat­tle that is likely to come based on the rec­om­men­da­tions made by the Pres­i­den­tial “blue rib­bon” debt panel.


Tasked with mak­ing sug­ges­tions on how the U.S. could avoid fur­ther finan­cial cri­sis, the debt panel released its ini­tial plan - call it a trial bal­loon. The panel approached their plan with­out regard to any polit­i­cally sacred cows, includ­ing mil­i­tary pay and ben­e­fits.



The President’s National Com­mis­sion on Fis­cal Respon­si­bil­ity and Reform co-chairs, for­mer Sen. Alan Simp­son (R-Wyo.) and for­mer chief of staff to Pres­i­dent Clin­ton, Ersk­ine Bowles, released a 58 page ini­tial plan which includes the fol­low­ing mil­i­tary pay and ben­e­fit related pro­pos­als:

A Fed­eral Pay Freeze - The plan’s most volatile sug­ges­tions is a three-year mil­i­tary and fed­eral civil­ian employee pay freeze. In gen­eral, the freeze would affect basic pay and basic allowance for hous­ing (BAH).

Elim­i­nate the 20 Year Mil­i­tary Retire­ment - The plan calls for replac­ing the cur­rent 20-year retire­ment sys­tem with a plan that would allow retire­ment at 10 years but delay pay­ment until age 60. This would pre­sum­ably affect future mil­i­tary entrants.

Reform COLA - The panel sug­gests mak­ing the mil­i­tary retirement/annuitant and dis­abil­ity com­pen­sa­tion annual cost-of-living adjust­ments for­mula reflect con­sumer shop­ping options - essen­tially reduc­ing the annual increase.

Increase TRICARE Pre­mi­ums and Co-pays - Pre­mi­ums and fees would climb for working-age mil­i­tary retirees, enroll­ment fees and co-pays would be applied to all three TRICARE options, includ­ing fee-for-service cov­er­age under TRICARE Stan­dard and the pre­ferred provider net­work using TRICARE Extra.

In addi­tion, employ­ers would have to reim­burse the gov­ern­ment for any mil­i­tary retiree who opts to use TRICARE over employer offered pro­grams.

The DoD is not the only agency fac­ing dras­tic cuts, the panel made unpop­u­lar cost cut­ting rec­om­men­da­tions for vir­tu­ally every sec­tor of gov­ern­ment. Sen. Alan Simp­son sug­gested that he and his co-chair, Ersk­ine Bowles, may “need to go into wit­ness pro­tec­tion” before this process is com­pleted.
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