Retiree Benefits Presentation - Association of the United

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Transcript Retiree Benefits Presentation - Association of the United

Retiree Presentation North Texas Chapter

10 March 2011

SGM Leroy Bussells, USA (Ret.) Asst. Director Retiree & Veteran Affairs AUSA 10 March 2011

Retiree Population -- Growing

Year Active Soldiers Retired Soldiers 1920 204,000 6,000 1950 1960 1970 1980 1990 593,000 873,000 1,323,000 777,000 732,000 42,000 102,000 282,000 425,000 489,000 1993

2009 539,675 828,288*

* 211,476 annuitant surviving spouses • Each year approximately 28,000 Soldiers retire


Declining Military Experience in Congress

106th 107th 108th 109th 110th 111th Senate 48% 38% 35% 31% 29% 25% House 32% 30% 27% 25% 23% 22% 112 th Congress: Senate – 25% House – 19%

The Environment

• Unemployment at 9+/- % • SECDEF wants $100 Billion Saving in 5 Years • VA and DoD Healthcare Costs have increased dramatically • Stress on the Force and Families • Health Care Cost Shifting • “Entitlement Reform” – Commission of Fiscal Responsibility and Reform

What’s Hot on Hill

Budgets for 2011 – 2012 – “Cuts”

Costs of Long Wars. DoD Budget: “Peace Dividend?”

Wounded Warrior / Survivor Issues

“Entitlement Reform” Threats – Commission of Fiscal Responsibility and Reform

Healthcare Reform & Medicare/ TRICARE Payment Formula

Soldiers and Families Have Real Benefit Concerns

• • • • • • • • • • • • •

Recent Legislative Gains

TRICARE For Life/ TRICARE Pharmacy Elimination of the SBP – Social Security Offset Combat Related Special Compensation – Concurrent Receipt (50% or greater disable) Six Year Phase in of CRDP for IU’s Medical Retirees eligible for CRSC (’08) Commissary Benefit now in Law Defeated Major TRICARE Fee Increases Repeal Medicare/TRICARE Payment Reduction for Doctors Retirement Credit for G/R after Jan ’08 Gray-Area Health Care Wounded Warrior Caregiver Compensation TRICARE Coverage for Dependents up to Age 26

2011 Top Goals

• • • • • • • •


Health Care Cost-Shifting from the government to military beneficiaries -


disproportional TRICARE Fee increases


in its entirety the SBP – DIC offset for survivors


the concurrent receipt entitlement legislation to include all veterans that medically retired (disabled)


no cuts to Medicare/TRICARE Payments


legislation to allow military retirees to use pre-tax earnings to pay health insurance premiums.


the Reserve Component retirement system to reduce the age at which retired RC Soldiers begin to receive their pay and benefits from 60 to 55


the full value of retiree and annuitant income (COLA) and non-monetary benefits that are an integral part of military retirement (commissary, PX and etc)


Title 10 to forgive overpayment of retired pay after death of retiree

2011 NDAA

Authorizes $30.9 billion for the Defense Health Program.

• •

Authorizes TRICARE coverage for eligible dependents up to age 26

Requires the Secretary of Defense to submit a plan to enhance the quality, efficiencies, and savings within the military health care system.

Extends for 1 year the limitation on charges for inpatient care in civilian hospitals under TRICARE Standard.

Requires the Secretary of Defense to develop and implement education and training programs on the use of pharmaceuticals for patients in, or in transition to, a wounded warrior unit, medical caregivers, medical and non-medical case managers, military leaders, and family members

Authorizes $71.2 million to be appropriated for the Armed Forces Retirement Home.

Sets the stage for the creation of a unified medical command to increase efficiency in providing health care to our service members.

Concurrent Receipt “Disabled Retiree Tax”

Thousands of disabled retirees lose $1 retired pay for ea $1 from VA. Congress has fixed some but more needs to be done Cmbt Non-Cmbt Related Related 20+ Yrs/100% Disabil 20+Yrs/50+% Disabil 20+ Yrs/0-49% Disabil Under 20 Yrs Yes Yes Yes In Process Yes No Yes No

SBP Progress

Passed Law Four Years Ago Phasing Out Age 62 SBP “Widows Tax” (1 Apr 08)

But SBP Inequity Remains:

• •

VA Indemnity Payment (DIC) Offsets Paid Insurance on Retired Pay (SBP) FY ’08 NDAA: $50 mo. added to SBP, Increases annually to $310 over 10 yrs. Ends 1Oct 2017

SBP-DIC Offset

SBP: Paid by DoD

55% of Covered Retired Pay for Survivors of Retired Members

41% of High-3 Base Pay For Survivors of Active Duty Deaths

DIC: Paid by VA if Death is Service Connected

Flat Rate for All ($1,154/Mo)

SBP-DIC Offset (cont)

(Active Duty Deaths)

DIC Now Deducted from SBP Dollar For Dollar ($1,154/Mo)

Wipes Out Most SBP for E-6 and Below Active Duty Deaths

Can Assign SBP to Children

Only AD Deaths since 7 Oct 2001

Lose All SBP When Child is 18

SBP-DIC Offset

(Retiree Deaths)

SBP & DIC Paid for Different Reasons

SBP is Purchased Insurance

DIC Should Be Added Indemnity for Service-Caused Death

Survivors of Fed Civ Vets Don’t Forfeit SBP When DIC Payable

Military Healthcare

Healthcare Legislative Wins for 2010/11

No TRICARE Copays/Fee Hikes

Medicare/TRICARE Provider Pymnts

Preventive Services Copays/Deductibles

Improve Access to Health Providers

TRICARE Retired Reserve – “Gray Area” Health Coverage – Rates effect 1 Jan – Member $408, Family $1020 -Monthly

Healthcare Legislative Wins for 2010/11

Special Compensation for Wounded Warrior Caregivers – Lots of Concern/Interest Slow Implementing – Not as Broad As Some Thought

Reserve Component Transition Assistance

Prohibition of MIL-CIV conversions

Expansion of TRICARE Dental to Survivors

TRICARE coverage for eligible dependents up to age 26 – Estimated Costs Are About $2400 a Year

Healthcare Legislative Goals for 2011

Ensure proper DoD/VA Care for Wounded Warriors and Families

Improve TRICARE Access and Provider Participation – More Providers i.e. Docs and Other Health Care Workers

Fix Medicare/TRICARE Pay Formula – 1 Jan Medicare Rates Fixed - Were Due to Be Cut 25% - good until the end of 2011

Protect Against Benefit Cuts/Avoid Disproportional Cost-Shifting


9.7 Million Beneficiaries WEEKLY:

• 21,800 inpatient admissions • 1.6 million outpatient appointments • 2,300 births • 2.5 million prescriptions

Annual Costs Per Beneficiary:

• TRICARE Prime = $4,202 • TRICARE Standard = $3,584 • TRICARE For Life $3,874* *Does not include Medicare costs

Proposed TRICARE Fees

• • • •

Sec Gates has been very vocal about TRICARE Fees: “Healthcare eating Defense Department Alive” Proposed Fees: Increase TRICARE Prime fees by 13% - $230 single/460 family per year to $260/$520 Index future increases to Medical Inflation Pharmacy Fees:

Eliminate co-pays for generic drugs through mail order

Increase co-pays $2-$3 Rx for drugs from retail pharmacies

USFHP enrollees transition to TRICARE For Life/Medicare upon age 65 in the future.

Monetary Impact of TRICARE Fee Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2025 2030 2035 2040 2045 Tied to Retired Pay COLA $460.00















Adjustment DoD Proposal (Tied to HC Inflation $460.00 $520.00 $552.24 $586.48 $622.84 $661.46 $702.47 $746.02 $792.27 $841.39 $1,136.64





Difference (loss of purchasing power) $0.00
















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

Previous Proposed Increases Were Disproportional

Far Exceed Retired Pay Increases

Would Erode Retired Pay/SBP Value

Congress Rejected Far Smaller Fees for Non disabled Vets’ VA Care

Congress Knew TFL Wasn’t Cheap

OMB/DoD Ignoring TFL Funding Law

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

Positive Ways to Cut DoD Health Costs

Incentivize Preventive Care

Eliminate Copays/Deductibles for Cost-Saving Treatments/Meds

Continue efforts / pilots to re-direct and educate beneficiaries to proper care venues

Promote Mail-Order Rx in Positive Way – Now termed “Home Delivery”

Positive Ways to Cut DoD Health Costs

Promote Retention of Employer Ins.

Make TRICARE True 2 nd -Payer

Provide Optional Subsidy for RC

Maximize Use of Military Medical Facilities Medical Home Model

Overhaul PreAuth and Referral Sys

TRICARE Fee Conclusion

• •

Have not Dodged Bullet Allows Shift to What Service Members Have Earned

Allows Reasonable Dialogue and Trade-Offs AUSA’s Position: AUSA does not want any TRICARE fee increases; however, if they are approved, the association is urging members of Congress to insure that any annual increase not be tied to medical inflation. We strongly believe that, in recognition of military beneficiaries’ lengthy service and sacrifice, the percentage increase in any year should not exceed the retired pay COLA percentage.

TRICARE For Life (For Over-65 Beneficiaries)

• • • •

Eligible if enrolled in Medicare Parts A


B ($96.40/mo. cost) – ($110.50 for new enrollees) - Retirees, their family members & survivors - Certain former spouses - Medal of Honor recipients, their families & survivors Is 2 nd payer to Medicare in CONUS Is 1 st payer overseas Is LAST payer when there is other health insurance

TRICARE For Life—How it Works

• You visit your Medicare provider • Your provider files a claim with Medicare • Medicare pays its portion and sends the remaining amount to TRICARE • TRICARE pays remaining amount to your provider • You get an explanation of benefits from Medicare and TRICARE

Contact Wisconsin Physicians Service-TFL 1-866-773-0404

Medicare Card

Shows your eligibility for Parts A & B and the effective dates of coverage.

• No TRICARE For Life card • Just show this Medicare card along with your uniformed services ID card

Call 1-800-MEDICARE or visit

if you need a new card.

Medicare Part B Premiums

 

Premiums Based on the Cost of the Overall Program

Government Pays 75% of the Cost

Individual, Through Part B Premiums, Pays Approximately 25%.

A Sliding Income Scale Will Determine the Percentage of the Total Premium That You Will Pay

 

Under $85,000 you pay approximately 25% ($110.50) Over $85,001 to $107,000 you pay 35% ($154.70).

  

Over $107,001 to $160,000 you pay 50% ($221.00).

Over $160,001 to $213,000 you pay 65% ($287.30).

Over $213,000 you pay 80%. ($353.60)

Update DEERS


• Visit an ID card-issuing facility • Find nearest at • Call 1-800-538-9552 • Mail proof of Medicare eligibility to: DMDC Support Office ATTN: COA 400 Gigling Road Seaside, CA 93955-6771 • • •

Permanent family member ID card at age 75 – We are pushing to lower this to age 65 SSN Being Eliminated from ID Card

TRICARE Mail Order Pharmacy (TMOP) – “Home Delivery”

• • • •

4 Options Under TMOP:

Use military treatment facility


• •

Use TRICARE retail network pharmacy Use Non network retail pharmacy Costs: range from $3 - $9 for 30-90 day supply – Changes Proposed Registration: required (form available online) More Info:

TRICARE Retiree Dental Plan Enhanced (TRDP


Administered by DDP*Delta) Who Is Eligible:

• • • •

Retirees (any age!) Gray area reserve retirees not yet 60 Medal of Honor recipients Spouses, unremarried surviving spouses, and eligible children of both groups

Where Available:

U.S., Puerto Rico, Canada, U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands – other overseas areas have been added



• •

Dependent on location; monthly rates $25-$120 Costs borne by participant; no govt subsidy

Cost-of-Living Adjustment (COLA)

Retired pay receives annual COLAs

Based on CPI, 3rd Qtr to 3rd Qtr of CY

Payment date – 1 st workday of January

Partial COLA - first year of retirement **** COLA For ’10/’11 was 0.0% **** Negative number is carried over to the next year We are now in positive territory (.04) So anticipate a small COLA for 2012 “NOT A PAY RAISE”

Years Required for Annuity to Exceed Premiums for Spouse SBP Years Premiums Paid

5 Years 10 Years 15 Years 20 Years 25 Years *30 Years

Years for Annuity to Exceed Premiums Paid

8 Months 1 Year, 1 Months 1 Year, 6 Months 1 Year, 10 Months 2 Years, 2 Months 2 Years, 5 Months

* No further cost after 360 (30 years) premium payments and age 70 *Based on DOD Office of the Actuary statistical analysis

Bits and Pieces

TRICARE Standard, TRICARE Prime, TRICARE Reserve Select, TRICARE Retired Reserve and TRICARE for Life are all qualifying coverage under National Health Care Reform

Medicare Rates have Direct Effect on TRICARE

VA authorizes Benefits For Lou Gehrig’s Disease, Parkinson’s disease, Ischemic heart disease and B Cell Leukemia (Hairy Cell Leukemia)

U.S. Treasury Changes Savings Bond Program – No longer issuing Paper Bonds thru Payroll deduction

VA Plan to help Caregivers of Wounded

Leadership change at Arlington National Cemetery – Lots of Folks watching

Improvements to New GI Bill

Ensure Pay Records are up to date – may affect benefits -- “MyPay”

Law changed to allow Veterans and Retirees to Salute the Flag

How You Can Help!

1. Send a letter or email to your congressional representatives.

2. Call their local offices and let them know how you feel about the issue and that you are watching how they vote.

3. Support the military organizations one or more of them.

– AUSA and others that are championing these issues through membership in

Approved Retiree Pin WEAR IT - BE PROUD

Questions ?

SGM Leroy Bussells, USA (Ret.) Asst Director, Retiree & Veteran Affairs AUSA 10 March 2011

2010 Top Goals

• • • • • • • •

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

Secretary Gates 29 September 2010

• Personnel Costs Doubled in last Decade • Health Care from 19 Billion to 50+ Billion • Working Age Premiums & CoPays not changed in 15 years • Growing Cost of All-Volunteer Force • Equitable & Sustainable System of Pay and Benefits • Generous Enough to Recruit and Retain • Sacred Obligation

2011 - Amendments

• • • • • • • • • • • • • • •

SBP/DIC Offset Elimination Retired Pay Restoration (Concurrent Receipt) Chapter 61 Concurrent Receipt Entitlement TRICARE Dependent Coverage Extension (to age 26) Reserve Retirement Deployment Credit Correction Reserve Retired Pay Age Reduction Federal & Military Retiree Health Care Equity Retired Pay Restoration CRSC for DoD Disability Severances Pay Military Retiree Survivor Comfort Chiropractic Health Parity for Military Beneficiaries TRICARE Autism Care Agent Orange Equity Women Veterans Access to Care Disabled Military Retiree Relief (Concurrent Receipt)