The Military Coalition Presentation to the USCG Retiree Council April 28, 2010 Phil Odom MOAA John Davis FRA

Agenda Who We Are Wins & Goals Current Hill Environment Active Duty Issues Retiree / Survivor Issues Healthcare Issues Q & A

The Military Coalition Organized in Military/Veterans Assns Represents over 5.5 Million Members Each With Its Own Programs/Goals United Purpose: Strong Advocacy Focus on Active, Guard & Reserve, Retired & Survivor Issues

Wins Last 10 Years 46% Cum. Pay Raise (vs. 33% Pvt Sector) Major GI Bill Upgrades End Strength Increases Wounded Warrior Protections Repealed REDUX Retirement Penalties Concurrent Receipt Major Survivor Benefit Upgrades Reserve TRICARE Coverage (& Premium Cut) Defeated Major TRICARE Fee Hikes G/R Ret Age Credit for AD Svc (Prospective) TRICARE For Life/TRICARE Senior Pharmacy Military Spouse/Children Protections

2009 Wins Reversed 15% Medicare/TRICARE Cut 30K Army End Strength Plus-Up 3.4% Military Pay Raise Defeated $110/Day Inpatient Fee Hike Preventive Care “Carrots” TRICARE For Gray Area Reservists Military Spouse Residency Relief Act Military Child Education Compact

2010 Top Goals Minimize Health Cost-Shifting More Concurrent Receipt Progress SBP-DIC Offset Match End Strengths to Missions Guard/Reserve Retirement / TAP Medicare/TRICARE Access/Funding Family Support Programs/Funding Seamless DoD/VA Transition

Current Hill Environment Afghanistan Surge – Iraq Drawdown Obligations to Wounded & Survivors Stress on the Force – Member & Family Economic Recovery & Federal Deficit Entitlement Reform Threats National Health Care Reform

Heard on the Hill “Congress has added politically popular pay raises and increased benefits for military personnel…, while stifling repeated efforts…to raise fees for the military’s TRICARE health care system”

Personnel Cost More Pay Raises: 6 yrs of ECI+1/2% (2006), ECI (2007), ECI+1/2% (2008) ? Rounds of “Pay Table Reform” BAH Increases TRICARE For Life Concurrent Receipt for VA Disability Rating of 50% or Greater Repeal of Redux Repeal of SBP Offset to Soc Sec After 62

Active Force Goals Increase End Strength to Match Mission Fairer Treatment of Wounded & Families Upgrade Health Care Access Restore/Sustain Pay Comparability Authorize Flexible Spending Accounts Improve Family Support Programs/Funding Raise PCS Reimbursements Increase Orthodontia Payment Cap

Retiree/Survivor Goals End ‘Disabled Veterans Tax’ Repeal SBP-DIC Offset Bar Excess Health Cost-Shifting Upgrade Health Care Access Guard Against Devalued Retirement More Consistent Disability Ret System Restore DIC If Remarry after Age 55 Final Retired Paycheck for Survivors

12 Concurrent Receipt Haves and Have-nots

The FIX Further Expand Concurrent Receipt Senate: S. 546 (Reid, D-NV) House: H.R. 303 (Bilirakis, R-FL) H.R. 333 (Marshall, D-GA) White House: Budget submission supports fixing all Chapter 61 retirees; CBO score $5.8B

SBP /DIC Inequity VA Indemnity Payment (DIC) Offsets Paid Insurance on Retired Pay (SBP) DIC Deducted from SBP Dollar For Dollar ($1,154/Mo) Wipes Out Most SBP for E-6 and Below Active Duty Deaths FY ’08 NDAA acknowledged inequity; rebate added; FY10 $60; increases to $345 by 2016

The FIX Repeal SBP-DIC Offset Senate: S. 535 (Nelson, D-FL) House: H.R. 775 (Brown, R-SC, Ortiz, D-TX) Discharge Petition introduced CBO Score = $7B

What’s Next President’s Budget submitted in February Pay raise 1.4% ; smallest since 1962 Concurrent Receipt fix for Chapter 61 retirees; no $ provided ($5.8B) G/R Early Retirement credit FY fix Deployment spanning 2 FY’s SBP/DIC Repeal (HR 775) Discharge Petition Fiscal Reform Commission

“Everything Is On the Table” Medicare, Soc Sec, Fed/Mil Retirement, VA, Taxes 1995 Commission Revisited, But Worse Challenges: Articulate Earned Benefits vs. Social Programs Avoid Disproportional Penalties on Any Segment

Military Healthcare John Davis FRA

Healthcare Legislative Wins for 2009 TRICARE Co-pays/Fees Medicare/TRICARE Provider Payments Preventive Services Co-pays & Deductibles Improve Access to Health Providers Gray Area Reserve TRICARE Coverage

Special Compensation for Wounded Warrior Caregivers Reserve Component Transition Assistance Prohibition of MIL-CIV conversions Expansion of TRICARE Dental to Survivors Healthcare Legislative Wins for 2009

Healthcare Legislative Goals for 2010 Ensure proper DoD/VA Care for Wounded Warriors and Families Improve TRICARE Access and Provider Participation Fix Medicare/TRICARE Pay Formula Protect Against Benefit Cuts/Avoid Disproportional Cost-Shifting

Healthcare Legislative Goals for 2010 Allow 3 Yrs of A-D level healthcare for disability retirees/family Improve Seamless Transition Between DoD and VA Healthcare Benefits Systems Authorize Option to Subsidize Retention of Reservists’ Civilian Family Health Insurance

TRICARE Fees Good News Sec Gates Indicated no Fee Increases in Budget and Approves Defense Request Solves a Budget Issue for Congress Bad News Opened Discussion on Dept’s Ability to Sustain Continued Increase in Health Costs as have other lawmakers

TRICARE Fees DoD Past Arguments for Fee Increases: Need to Restore 1995 Share of DoD Cost Need to Reflect Civilian Practices Cost of Legislated Benefit Increases Need to Free Funds for Weapons

Beneficiary Fees vs. DoD Costs Fees Should NOT Reflect % of DoD Costs Bureaucracy Doesn’t Incentivize Efficiency Ops/Readiness/Inefficiency Costs Are “Cost of Nat’l Defense”, Not Patient Responsibility

Positive Ways to Cut DoD Health Costs Incentivize Preventive Care Eliminate Co-pays/Deductibles for Cost-Saving Treatments/Meds Continue efforts / pilots to re-direct and educate on proper care venues Promote Mail-Order Rx in Positive Way – Now termed “Home Delivery”

Positive Ways to Cut DoD Health Costs Promote Retention of Employer Ins. Make TRICARE True 2 nd -Payer Provide Optional Subsidy for G/R Maximize Use of Military Medical Facilities / Medical Home Model Overhaul PreAuth and Referral Sys

TRICARE Fee Legislation Need to Establish Principles In Law: Primary Offset for Service Conditions Military Pre-Pay Very High In-Kind Premiums Through Yrs of Sacrifice

TRICARE Fee Conclusion Have not Dodged the Bullet No Budget Battle but Still Pressure on Congress to Increase Fees Potential Savings Could be Used for Other Priorities Allows Reasonable Dialogue and Trade-Offs

Healthcare Reform Current Bills of Interest S & H.R amends the IRS Code to provide for the treatment of DoD health coverage as minimal essential coverage; Sen. Webb (March 22); Rep. Skelton (March 19); sent to WH 14 April S. 3162, clarifies the healthcare provided by VA that constitutes minimum essential coverage; Sen. Akaka ( March 24) H.R. 4894, amends the PPACA to ensure appropriate treatment of VA and DoD health programs; Rep Buyer (March 20) H.R & S amend Title 10, U.S. Code to extend TRICARE coverage to certain dependents under the age of 26; Rep. Heinrich (March 24) HR 4851 (PL ) delays 21.2% reduction in Medicare reimbursement to medical providers until 1 Jun 2010

Questions ?