The Military Coalition Presentation to the USCG Retiree Council April 28, 2010 Phil Odom MOAA John Davis FRA

1. The Military Coalition Presentation to the USCG Retiree Council April 28, 2010 Phil Odom MOAA John Davis FRA

2. Agenda • Who We Are • Wins & Goals • Current Hill Environment • Active Duty Issues • Retiree / Survivor Issues • Healthcare Issues • Q & A

3. The Military Coalition • Organized in 1985 • 34 Military/Veterans Assns • Represents over 5.5 Million Members • Each With Its Own Programs/Goals • United Purpose: Strong Advocacy • Focus on Active, Guard & Reserve, Retired & Survivor Issues

4. Wins Last 10 Years • 46% Cum. Pay Raise (vs. 33% Pvt Sector) • Major GI Bill Upgrades • End Strength Increases • Wounded Warrior Protections • Repealed REDUX Retirement Penalties • Concurrent Receipt • Major Survivor Benefit Upgrades • Reserve TRICARE Coverage (& Premium Cut) • Defeated Major TRICARE Fee Hikes • G/R Ret Age Credit for AD Svc (Prospective) • TRICARE For Life/TRICARE Senior Pharmacy • Military Spouse/Children Protections

5. 2009 Wins • Reversed 15% Medicare/TRICARE Cut • 30K Army End Strength Plus-Up • 3.4% Military Pay Raise • Defeated $110/Day Inpatient Fee Hike • Preventive Care “Carrots” • TRICARE For Gray Area Reservists • Military Spouse Residency Relief Act • Military Child Education Compact

6. 2010 Top Goals • Minimize Health Cost-Shifting • More Concurrent Receipt Progress • SBP-DIC Offset • Match End Strengths to Missions • Guard/Reserve Retirement / TAP • Medicare/TRICARE Access/Funding • Family Support Programs/Funding • Seamless DoD/VA Transition

7. Current Hill Environment • Afghanistan Surge – Iraq Drawdown • Obligations to Wounded & Survivors • Stress on the Force – Member & Family • Economic Recovery & Federal Deficit • Entitlement Reform Threats • National Health Care Reform

8. Heard on the Hill “Congress has added politically popular pay raises and increased benefits for military personnel…, while stifling repeated efforts…to raise fees for the military’s TRICARE health care system”

9. Personnel Cost More • Pay Raises: 6 yrs of ECI+1/2% (2006), ECI (2007), ECI+1/2% (2008) ? 2009 • 4 Rounds of “Pay Table Reform” • BAH Increases • TRICARE For Life • Concurrent Receipt for VA Disability Rating of 50% or Greater • Repeal of Redux • Repeal of SBP Offset to Soc Sec After 62

10. Active Force Goals • Increase End Strength to Match Mission • Fairer Treatment of Wounded & Families • Upgrade Health Care Access • Restore/Sustain Pay Comparability • Authorize Flexible Spending Accounts • Improve Family Support Programs/Funding • Raise PCS Reimbursements • Increase Orthodontia Payment Cap

11. Retiree/Survivor Goals End ‘Disabled Veterans Tax’ Repeal SBP-DIC Offset Bar Excess Health Cost-Shifting Upgrade Health Care Access Guard Against Devalued Retirement More Consistent Disability Ret System Restore DIC If Remarry after Age 55 Final Retired Paycheck for Survivors

12. Concurrent Receipt Haves and Have-nots

13. The FIX • Further Expand Concurrent Receipt • Senate: S. 546 (Reid, D-NV) • House: H.R. 303 (Bilirakis, R-FL) • H.R. 333 (Marshall, D-GA) • White House: Budget submission supports fixing all Chapter 61 retirees; CBO score $5.8B

14. SBP /DIC Inequity • VA Indemnity Payment (DIC) Offsets Paid Insurance on Retired Pay (SBP) • DIC Deducted from SBP Dollar For Dollar ($1,154/Mo) • Wipes Out Most SBP for E-6 and Below Active Duty Deaths • FY ’08 NDAA acknowledged inequity; rebate added; FY10 $60; increases to $345 by 2016

15. The FIX Repeal SBP-DIC Offset Senate: S. 535 (Nelson, D-FL) House: H.R. 775 (Brown, R-SC, Ortiz, D-TX) Discharge Petitionintroduced CBO Score = $7B

16. What’s Next • President’s Budget submitted in February • Pay raise 1.4% ; smallest since 1962 • Concurrent Receipt fix for Chapter 61 retirees; no $ provided ($5.8B) • G/R Early Retirement credit FY fix • Deployment spanning 2 FY’s • SBP/DIC Repeal (HR 775) Discharge Petition • Fiscal Reform Commission

17. Fiscal Reform Commission • “Everything Is On the Table” • Medicare, Soc Sec, Fed/Mil Retirement, VA, Taxes • 1995 Commission Revisited, But Worse • Challenges: • Articulate Earned Benefits vs. Social Programs • Avoid Disproportional Penalties on Any Segment

18. Military Healthcare John Davis FRA

19. Healthcare LegislativeWins for 2009 • TRICARE Co-pays/Fees • Medicare/TRICARE Provider Payments • Preventive Services Co-pays & Deductibles • Improve Access to Health Providers • Gray Area Reserve TRICARE Coverage

20. Healthcare LegislativeWins for 2009 • Special Compensation for Wounded Warrior Caregivers • Reserve Component Transition Assistance • Prohibition of MIL-CIV conversions • Expansion of TRICARE Dental to Survivors

21. Healthcare Legislative Goals for 2010 • Ensure proper DoD/VA Care for Wounded Warriors and Families • Improve TRICARE Access and Provider Participation • Fix Medicare/TRICARE Pay Formula • Protect Against Benefit Cuts/Avoid Disproportional Cost-Shifting

22. Healthcare Legislative Goals for 2010 • Allow 3 Yrs of A-D level healthcare for disability retirees/family • Improve Seamless Transition Between DoD and VA Healthcare Benefits Systems • Authorize Option to Subsidize Retention of Reservists’ Civilian Family Health Insurance

23. TRICARE Fees • Good News • Sec Gates Indicated no Fee Increases in Budget and Approves Defense Request • Solves a Budget Issue for Congress • Bad News • Opened Discussion on Dept’s Ability to Sustain Continued Increase in Health Costs as have other lawmakers

24. TRICARE Fees • DoD Past Arguments for Fee Increases: • Need to Restore 1995 Share of DoD Cost • Need to Reflect Civilian Practices • Cost of Legislated Benefit Increases • Need to Free Funds for Weapons

25. Beneficiary Fees vs.DoD Costs • Fees Should NOT Reflect % of DoD Costs • Bureaucracy Doesn’t Incentivize Efficiency • Ops/Readiness/Inefficiency Costs Are “Cost of Nat’l Defense”, Not Patient Responsibility

26. Positive Ways to Cut DoD Health Costs • Incentivize Preventive Care • Eliminate Co-pays/Deductibles for Cost-Saving Treatments/Meds • Continue efforts / pilots to re-direct and educate on proper care venues • Promote Mail-Order Rx in Positive Way – Now termed “Home Delivery”

27. Positive Ways to Cut DoD Health Costs • Promote Retention of Employer Ins. • Make TRICARE True 2nd-Payer • Provide Optional Subsidy for G/R • Maximize Use of Military Medical Facilities / Medical Home Model • Overhaul PreAuth and Referral Sys

28. TRICARE Fee Legislation • Need to Establish Principles In Law: • Primary Offset for Service Conditions • Military Pre-Pay Very High In-Kind Premiums Through 20-30 Yrs of Sacrifice

29. TRICARE Fee Conclusion • Have not Dodged the Bullet • No Budget Battle but Still Pressure on Congress to Increase Fees • Potential Savings Could be Used for Other Priorities • Allows Reasonable Dialogue and Trade-Offs

30. Healthcare ReformCurrent Bills of Interest S. 3148 & H.R. 4887 amends the IRS Code to provide for the treatment of DoD health coverage as minimal essential coverage; Sen. Webb (March 22); Rep. Skelton (March 19); sent to WH 14 April S. 3162, clarifies the healthcare provided by VA that constitutes minimum essential coverage; Sen. Akaka ( March 24) H.R. 4894, amends the PPACA to ensure appropriate treatment of VA and DoD health programs; Rep Buyer (March 20) H.R. 4923 & S. 3201 amend Title 10, U.S. Code to extend TRICARE coverage to certain dependents under the age of 26; Rep. Heinrich (March 24) HR 4851 (PL 111-157) delays 21.2% reduction in Medicare reimbursement to medical providers until 1 Jun 2010

31. Questions ?