Gates goes after military health care

[January 08, 2011]  WASHINGTON (AP) -- Defense Secretary Robert Gates is betting that Americans' frustration with a ballooning deficit will finally allow him to trim one of the government's most politically protected entitlement programs: the military's $50 billion-a-year health care system.

The defense chief has tried to push similar proposals through Congress before and failed. And this year's pitch is a particularly fraught with political risk. President Barack Obama is defending his own health care plan from threats of repeal in the House, while Republicans are looking for ways ahead of the 2012 election to discredit the administration's commitment to the troops.

The military health care program, set up in the 1960s and known as TRICARE, has exploded in cost in recent years with some 10 million individuals now eligible for coverage, including active-duty personnel, retirees, reservists and their families. The price tag has climbed from $19 billion a year a decade ago to its current $50 billion.

Last month, Congress voted to extend coverage of children of service members and retirees until the age of 26, putting the program in line with new requirements for civilian policies.

Gates has been blunt about what he regards as the need to rein in the soaring costs of the program.

"Leaving aside the sacred obligation we have to America's wounded warriors, health care costs are eating the Defense Department alive," Gates said.

But cutting the U.S. defense budget is never a simple task, and Gates' broader spending plans have already drawn fire from Congress.

"I remain committed to applying more fiscal responsibility and accountability to the Department of Defense, but I will not stand idly by and watch the White House gut defense when Americans are deployed in harm's way," Rep. Buck McKeon, R-Calif., the new chairman of the House Armed Services Committee, said of Gates' broader proposal to cut $78 billion from the Pentagon budget over the next five years.

Gates' proposal, announced this week, appears relatively modest. It would raise fees only on military retirees under the age of 65, who presumably have access to health care in their civilian jobs in addition to their military pensions and haven't seen a rate increase in more than 15 years. Meanwhile, health care for active-duty troops would remain free and rates charged to older retirees would remain untouched.

While Gates has not said how much the rate increase might be, he has projected that the additional fees combined with bureaucratic changes could save the military as much as $7 billion over five years.

Even so, Gates' plan pits the Pentagon and the Obama administration against a politically powerful network of veterans groups and retired generals who have long argued that fee increases are unfair. They say that the challenges of military service -- including extended and dangerous deployments overseas -- are unlike anything faced by civilians and that retirees have paid their dues through the sacrifice of serving their country.

Joe Davis, spokesman for the Veterans of Foreign Wars, said his group is still waiting to see more details of the plan, including the proposed rate increase. But past proposals he says would have tripled premiums remain a "nonstarter."

"Military retirees understand the need to reduce the national deficit," Davis said. "But two years without a (cost-of-living) increase, and knowing that civilians don't sacrifice anywhere near the level of the military, makes us very leery of any proposal to create parity between those who serve and those who don't."

So far, lawmakers have been relatively quiet about Gates' proposal. The TRICARE provision is part of a long list of reforms proposed, including plans to shrink the military's ground force, cancel some weapons programs and delay the production of others.

Details were provided in a 45-minute briefing Thursday on Capitol Hill to a small group of senior committee heads, and aides said their bosses were still digesting it.

Both the push for TRICARE overhaul and opposition to change has cut across party lines.

President George W. Bush first raised the issue in his 2007 budget submission by calling for higher prescription drug co-payments for all beneficiaries of military health care except those on active duty. Bush also wanted to increase annual enrollment fees for military retirees under age 65.

Congress rejected the proposal, along with similar ones made in 2008 and 2009.

Obama did not attempt a TRICARE increase his first year in office, and Gates has acknowledged that the timing hasn't been right. But many new lawmakers elected on a promise that they would rein in government spending say they are willing to consider any proposal that would chip away at the nation's deficit.

"The proposals routinely die an ignominious death on Capitol Hill," Gates said in a speech last May that outlined his broader plan of finding $100 billion in other cost-cutting measures across the military.

"But as a matter of principle and political reality, the Department of Defense cannot go to the America's elected representatives and ask for increases each year unless we have done everything possible to make every dollar count," he said.

[Associated Press; By ANNE FLAHERTY]

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