MILITARY UPDATE
Groups push for reform of Survivor Benefit Plan, retiree healthcare
By Tom Philpott
Advocates for military retirees will press Congress this year to enact two more major benefit reforms, one to improve the oft-criticized Survivor Benefit Plan and another to move the government nearer to providing free healthcare to a generation of older retirees.
Neither is expected to be backed by the Bush administration.
The top goal of SBP reform is to end a sharp drop in benefits that surviving spouses see at age 62 when most become eligible for Social Security. SBP annuities that are set at 55 percent of the covered retired pay amount suddenly fall to as low as 35 percent.
Sen. Mary Landrieu, D.-La., and Rep. Jeff Miller, R-Fla., introduced S 401 and HR 548, identical bills to phase out the lower tier of the SBP formula so that 55 percent annuities are sustained through old age. The first step of the phase out would occur Oct. 1, 2004, when annuities for older beneficiaries would rise to 40 percent. It would be 45 percent in 2005, 50 percent in 2006 and 55 percent in 2007, thus ending the reduction at 62.
The Military Officers Association of America has made SBP reform a priority, publishing a slick, six-page pamphlet called Fighting for Fairness. MOAA also plans a mail barrage on members on the House and Senate budget committees, urging them to create head room in the defense budget for SBP reform — nearly $1.3 billion over five years.
MOAA and other proponents make several arguments for the change. One is that many retirees and spouses were unaware of the drop in benefits at 62 when they enrolled in SBP. Also, because retirees are living longer, the government's share of SBP costs has fallen sharply since SBP began in 1972. A 40-percent government subsidy is down to 17 percent. Raising the subsidy back to 40 percent would go a long way to paying for the age 62 phase out.
Finally, reformers argue that federal civilians see no drop in survivor benefits at 62, although they do pay higher premiums.
Retired Air Force Col. George Bud Day, a lawyer and war hero, also supports SBP reform. But first he wants Congress to pass HR 3474, the Keep Our Promise to America's Military Retirees Act.
Introduced by Rep. Chris Van Hollen, D-Md., the bill would waive Medicare Part B premiums, now $66 a month, for retirees who entered service before June 7, 1956. It also would allow retirees and their dependents to enroll in the Federal Employees Health Benefits Plan, the menu of insurance options for federal civilians. It also would provide drug reimbursement at TRICARE network rates to beneficiaries who do not have access to a pharmacy in the TRICARE retail network.
The Keep Our Promise bill is Day's sole priority.
"What you need on these issues are rifle shots," he said. "Take an issue to Congress and pound on that until they do it. Then you need to pick up your next issue and pound on that."
For Day, it's an old battle on new ground. He led a six-year court challenge for older retirees seeking compensation for broken promises of free lifetime healthcare. The legal fight ended last year when the Supreme Court declined to reverse an appellate court's rejection of the lawsuit. The defeat was far from total, however. While the court challenge progressed, Congress enacted TRICARE for Life and the TRICARE Senior Pharmacy benefit, enormous gains for retirees 65 and older.
Day and the Class Act Group of retirees who rallied around the lawsuit, have turned to Congress, shopping for an advocate and helping Van Hollen draft HR 3474 to make more strides toward free lifetime healthcare.
"It's a very good bill," Day said. Elderly military retirees, he said, shouldn't have to pay Part B Medicare premiums. Yet they need to have Part B coverage to use TRICARE for Life.
Day said HR 3474 had more than 100 co-sponsors by early January. He expects his friend, Sen. John McCain, R-Ariz., and Sen. Tim Johnson, D-S.D., to introduce a companion bill in the Senate. Day said he will be on Capitol Hill, from his Florida home, at least one week a month this spring, "to make sure guys who vocalize support put their pencil on the paper too."
Waiver of Medicare premiums, the bill's most expensive feature, will cost about $800 million a year. Day shrugs off rhetoric from lawmakers that rising budget deficits are worrisome and could block new retiree initiatives.
"When it comes to spending, none of them pay attention to that. This Republican Congress is the most spendthrift we have ever had. [The] pork last year was just absolutely astonishing.
After HR 3474 passes, Day said, he'll join the push SBP reform.
CRSC applications delayed
It will be several more weeks before a revised application for Combat-Related Special Compensation will be available at www.dod.mil/prhome/crsc.html.
The delay is caused by the complex task of writing regulations to guide service CRSC boards.
Questions, comments and suggestions are welcomed. Write to Military Update, P.O. Box 231111, Centreville, VA 20120-1111, or send e-mail to: milupdate@aol.com. Or visit Tom Philpott's Web site.
