We have 2 Action Items today at Issue 4

 

 

Summary of Issues

At Issue 1. we see COLA UNCHANGED.  Low energy costs continue to anchor index. Despite growth in other sectors, inflation index still lags. Check out the 2016 vs 2015 COLA trends. (See Issue 1 below for the details. GF)

At Issue 2. we see CONGRESS RAMPS UP HEALTH CARE TALKS. MOAA leads the charge in health care discussions. Reform should focus on improving beneficiary care, not just increasing fees.

( See Issue 2 below for the details. GF)

At Issue 3. we see SMALL MILITARY PAY CAPS ADD UP TO BIG PENALTIES. Continued pay caps lead to big losses. In his March As I See It column, MOAA Director of Government Relations Col. Steve Strobridge, USAF (Ret), highlights how pay raise caps really bite you in the longer term. (See Issue 3 below for the details. GF)

At Issue 4. we see MOAA TESTIFIES ON VETERAN PRIORITIES. Health and benefit system reforms top the list. (Click on  MOAA TESTIFIES ON VETERAN PRIORITIES here or above for the details. At the end of that site, click on HR. 969  and S. 681 respectively. At the next link, enter your Zip Code (at the lower right of the screen) to access the “Take Action” and “COMPOSE MESSAGE” screen where you can scroll down to the draft message for editing if desired and verify or insert your personal information before hitting “Send Message”. GF)

                               

Collectively We Can and Are Making a Difference

 

FOR ALL, Please feel free to pass these Weekly Legislative Updates on to your group of Veteran Friends –

don’t be concerned with possible duplications – if your friends are as concerned as we are with Veteran issues, they probably won’t mind getting this from two or more friendly sources

 

ISSUES

 

Issue 1. COLA UNCHANGED 

In order for a positive COLA next year, the Consumer Price Index (CPI) has to make pretty significant increases.

The February CPI is 230.972, and remains at 1.4 percent below the FY 2014 COLA baseline. Because there was not a positive COLA in FY 2015, the FY 2014 baseline is used.

The CPI for March 2016 is scheduled to be released on April 14, 2016.

Note: Military retiree COLA is calculated based on the CPI for Urban Wage Earners and Clerical Workers (CPI-W), not the overall CPI. Monthly changes in the index may differ from national figures reported elsewhere.

 

Related content: Retired Pay vs Active Duty Pay Adjustments

(Click on : Retired Pay vs Active Duty Pay Adjustments here or above for the detail. GF)

Issue 2. CONGRESS RAMPS UP HEALTH CARE TALKS

 

March 18, 2016

The Chairman of the House Armed Services Military Personnel Subcommittee invited MOAA and a small handful of stakeholders to Capitol Hill on March 17 to discuss Pentagon proposals to reform the military’s health care system (MHS).

MOAA Government Relations Director Col. Steve Strobridge, USAF (Ret) told the panel in the year of TRICARE reform, DoD’s plan contained only vague statements on needed program improvements, and focused mainly on adding several new beneficiary fees and raising a wide range of others, especially for the retired community.

He noted the proposed fee schedules were designed to push more care to military hospitals and clinics, which have been the primary sources of access problems.

“Our preference would be to ensure access is improved in the [military facilities] before implementing a fee structure intended to drive more care there,” Strobridge said.

He also expressed MOAA’s hope the system would establish positive “carrots” to incentivize beneficiary choices rather than financial penalty “sticks.”

“Particularly for retirees, we believe the proposed fee increases – in the range of $500 to $1,200 a year – are disproportional,” Strobridge said.

“Further, the incentives seem structured as different-sized sticks, with the biggest sticks proposed for the TRICARE Standard group that, ironically, costs DoD the least money.

”Retirees in TRICARE Prime who use military facilities, as DoD wants, would see a 24 percent enrollment fee increase plus other increases in cost-shares and pharmacy copays.

Families who elect to stay with TRICARE Standard – which costs DoD less than Prime – would incur a new $900 annual enrollment fee, plus a $600 deductible for using out-of-network care, in addition to their existing 25 percent cost share for all services.

If a military family has a choice, a higher deductible for using out-of-network care might make sense. But DoD acknowledges the network system will only cover 85 percent of the population.

“MOAA believes the 15 percent of beneficiaries who have no choice other than using out-of-network providers shouldn’t be charged an extra $1,200 in enrollment fees and extra deductible for having no other option,” Strobridge told the panel.

MOAA believes there should be no enrollment fee for TRICARE Standard or TFL, as neither plan guarantees access to a network of providers, as TRICARE Prime does.

“MOAA particularly disagrees with the proposal to means-test the TFL enrollment fee by making it a percentage of retired pay,” Strobridge said. “No other federal or civilian employer means-tests its retirees’ service-earned health coverage, since it would penalize longer and more successful service.”

“We urge against any enrollment fee for TFL for three additional reasons: First, these older retirees already pay more for their health care than any other military beneficiaries. Second, DoD only pays 20 percent of their health costs, because Medicare is first payer. Finally, DoD costs for TFL have dropped 40 percent over the last several years”.

All of the witnesses expressed concern DoD’s budget proposal does nothing to address the serious continuity of care and consistency of coverage issues faced by the Guard and Reserve communities.

Lawmakers were receptive to MOAA’s and other witnesses’ inputs, and agreed the focus of military health reform must be on improving timely access to quality care rather than simply raising beneficiary fees.

 

Issue 3. SMALL MILITARY PAY CAPS ADD UP TO BIG PENALTIES

 

In times of budget crunches, the big cuts get the headlines. But small, repeated cuts also add up to big bucks over time.

For instance, the FY 2017 budget proposes capping military pay raises below the average American’s for the fourth year in a row.

The 2017 basic allowance for housing (BAH) increase for currently serving personnel also will be shaved by 1 percent for the third consecutive year, with two more years of 1-percent cutbacks coming after that.

For most servicemembers, the effect of these pay and allowance adjustments is masked.

They still get a pay raise each year and likely still get a BAH increase each year. The increases just aren’t as big as they would have been without the caps.

But that doesn’t mean the cuts have no impact.

In fact, the cumulative effect compounds with each passing year, and it will follow some servicemembers (those who retire under the depressed pay rates) for the rest of their lives in the form of reduced retired pay.

So exactly how much are we talking about?

First, let’s summarize the relative size of the caps for each year to date.

For 2014, the military basic pay raise was capped 0.8 percent below the average American’s pay raise (as measured by the Employment Cost Index, which is supposed to be the standard for military raises under the law unless the president proposes something different).

For 2015, there was an additional 0.8-percent pay-raise cap. In 2016, the cap was a full 1 percent. The FY 2017 budget proposes an additional 0.5-percent cap.

For 2015 and 2016, the BAH raise was capped 1 percent below actual housing cost growth, and current law will require another 1-percent BAH cap for 2017, 2018, and 2019.

The chart below shows the progressive, incremental losses those combined caps have imposed on an E-5 and an O-3, each with 10 years of military service.

While the first-year pay loss was relatively small, the compounded losses have mounted with each passing year.

The pay and allowance loss for 2017 alone will have grown above $2,000 for the E-5 and almost $3,300 for the O-3.

Their four-year cumulative losses will approach $5,000 and $8,000, respectively.

Because both the O-3 and the E-5 likely would have been promoted at some point in those four years, the amounts would be larger still.

What about their future retired pay?

Without even considering any subsequent promotions or longevity increases or further pay-raise caps, the O-3’s retired pay loss after 20 years’ service would be about $1,100 a year for life, just from these four “modest” pay-raise caps. Add in promotions, longevity increases, and likely further caps, and the future retired-pay loss would grow dramatically.

Think this sounds a little alarmist?

The last period of pay-raise caps began in the mid-1980s and continued through most of the ’90s. Servicemembers who retired under those depressed pay tables between 1994 and 2004 lost (and still are losing) upward of $5,000 in retired pay each year for the rest of their lives.

Unfortunately, history shows that once administrations and Congresses start capping military pay raises, they don’t stop until the cuts start hurting military retention and readiness.

That’s why MOAA is urging Congress to learn from the past and restore military pay raises to match the average American’s — before the troops’ cumulative losses get any larger.

 

That’s it for today- Thanks for your help over the years!