Air Force general warns growing health costs could hurt military's budget

“We have to recognize that if we are not careful these unbounded costs can force out military content elsewhere in the Department of Defense portfolio,” Gen. Norton Schwartz, the Air Force’s chief of staff, said at a National Press Club luncheon on Tuesday.

Schwartz said that the Pentagon pays $40 billion in healthcare costs for military members and retirees, and is expected to pay as much as $60 billion by 2015 — about 13 percent of the entire Pentagon budget.

“That is serious money,” Schwartz said at the luncheon.

Schwartz attributed the large cost increase to the fact that co-pays for Tricare, the military’s health insurance, have not grown for decades.

Defense Secretary Robert Gates earlier this year said healthcare costs “are eating the Defense Department alive.”

The Pentagon has tried several years in a row to raise the co-pays but have run into stiff resistance from Congress and military advocacy groups. Lawmakers have been very strong in their support for the troops, veterans and their families, and view any decision to cut off or diminish benefits for the military, such as healthcare or pay raises, as tough politically.

“It is un-escapable that a change will have to be made,” Schwartz said.

The defense budget is going to flatten and the Pentagon's purchasing power is going to diminish, Schwartz said.