Military healthcare reform no longer taboo to talk about

For the first time in nearly 20 years, members of the U.S. military might have to pay more for healthcare.

With the nation at war for nearly a decade, military healthcare and benefit programs have been considered sacrosanct. The Afghanistan and Iraq conflicts have generated reverence among the public for the U.S. military, making it unthinkable for most lawmakers to vote against any proposal that would take dollars out of troops’ pockets.

“This is one of the hardest rocks to crack,” said Gordon Adams, who ran defense budgeting for the Clinton administration. Reform in the area of benefits has proven “very, very hard,” he added. 

Defense Secretary Robert Gates and Joint Chiefs of Staff Chairman Adm. Michael Mullen, however, are pushing of late for a modest hike in healthcare premiums paid by military members, and some lawmakers are listening.

Mullen recently told the House Armed Services Committee that people costs account for “60 [percent] to 70 percent of our budget,” adding that the military is “on track to almost be immobilized” by healthcare and benefits costs. 

To begin paring down some of those bills, the Pentagon’s 2012 budget plan seeks to increase medical premiums for working-age military retirees by $30 — from $230 to $260 — and by $60 for family policies — from $460 to $520. That plan is one aspect of a Pentagon goal of slashing personnel costs by about $7 billion.

Rep. Adam Smith (D-Wash.), House Armed Services Committee ranking member, recently told reporters changes are needed to bring down costs.

“We have to examine where some of that money is going,” Smith said during a Feb. 17 breakfast with reporters in Washington. “It is a significant driver of the budget.”

When a business encounters budget trouble, “the first place it goes is labor costs,” Smith said. “There may have to be some increases in those fees [for] employment-age retirees.”

Asked about DoD healthcare changes during a Feb. 15 roundtable with reporters, Rep. Michael Turner (R-Ohio), chairman of the House Armed Services Strategic Forces subcommittee, said: “Everything needs to be on the table” as Washington grapples with its budgetary woes.

Other lawmakers are talking openly about — or at least not dismissing outright — changes to DoD healthcare policies untouched since 1995. That was the last time any fees in TRICARE — the name of the decades-old military healthcare system — were changed.

Pentagon officials have tried in recent years to bring about changes.

During a major budget speech last May, Gates referred to several attempts by the department to convince lawmakers to approve “modest [TRICARE] increases in premiums and co-pays.” All were defeated by a “furious response from Congress and veterans groups,” Gates said.

Defense leaders were spurred to seek those increases because “healthcare costs are eating the Defense Department alive,” Gates said at the time.

The military expected to spend $244 billion on personnel costs in 2010, more than a third of the $636 billion appropriated to DoD. Some analysts peg the actual number at over $300 billion.

Pentagon officials have said healthcare costs have swelled over the last 10 years, from $19 billion to $50 billion. 

With the nation in dire fiscal straits and the defense budget expected to shrink, Congress watchers see lawmakers’ resistance ebbing.

David Berteau, a former Defense Department official and now a Center for Strategic and International Studies (CSIS) analyst, said “the votes may be there this time.”

Berteau sees evidence of “cracks in the uniform procedure of voting against” dollars for defense programs.

Any enacted reforms likely will come after several legislative moves, “not a one-time, everyone-come-together kind of solution,” Berteau said Friday.

But there will be resistance among some lawmakers.

One is Sen. Jim Webb (D-Va.), who has promised to fight the department’s latest try to boost premiums.

“As someone who grew up in the military and served in the military, I start from the presumption that lifetime healthcare for career military personnel is part of a moral contract between our government and those who have stepped forward to serve,” Webb said in a statement. “For this reason, I oppose any proposal to raise TRICARE fees for military retirees.”

Some say tightening budgets and ever-escalating personnel costs are setting up a fight inside the Pentagon budget: people versus machines.

But Michael Bayer, until recently chairman of the influential Defense Business Board, on Friday said personnel programs will compete for funding with overhead and support functions, not hardware programs.

“Political constituencies for forces decline and increase for overhead over time,” Bayer said. “In past [defense spending] downturns, overhead and support won political [battles] with forces.”