This is an archived article that was published on sltrib.com in 2011, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
To help reduce federal budget deficits, President Obama has proposed modest fees for health care for military retirees and a commission to study reforms of military pensions. Veterans groups, naturally, are opposed. But as the nation battles soaring entitlement spending for Social Security and Medicare, military benefits are going to have to take their lumps, too.
It should be clear from the outset that the nation must make good on its promise to provide health insurance and pensions to military retirees and their dependents. But it would not be breaking that promise to ask military retirees to pay limited fees, higher co-pays and deductibles for medical insurance. Nor should it be out of bounds for a commission to consider defined-contribution benefits, similar to a 401(k) plan, to replace defined-benefit pensions for new recruits. Both of those changes have become routine for civilian employees, and the military cannot expect to remain immune.
Besides, Social Security and Medicare must be reformed to keep them financially viable, and that probably will include some combination of later retirement ages, reduced benefits, higher taxes, or all three. Again, the military cannot be held harmless.
Military veterans argue that gutting benefits will eviscerate the nation's fighting force, because many people join the all-volunteer military precisely because it offers generous health care and retirement plans. But even with the limited adjustments to benefits that the president is proposing, those programs will remain generous by the standards of the private sector. The financial incentive for people to serve in the armed forces will still be there.
In health insurance, the president would impose a $200 annual fee for members of TRICARE for Life. Since 2002, that program has provided a Medicare supplement for military retirees and their families. It pays nearly all medical costs for acute care not covered by Medicare and requires few out-of-pocket fees. That reform would save an estimated $6.7 billion over the next 10 years.
In addition, the president's plan would restructure co-payments for TRICARE pharmacy benefits. It would eliminate co-pays for generic mail-order drugs while shifting the co-pay for retail drugs from a dollar amount to a percentage. That would save an estimated $20.6 billion over 10 years.
The so-called Supercommittee of Congress currently is searching for $1.5 trillion in deficit reduction over the next decade. As civilian benefits go under the knife, so should the military.