Retiree Presentation

North Texas Chapter10 March 2011

SGM Leroy Bussells,USA (Ret.)

Asst. Director Retiree & Veteran Affairs

AUSA

10 March 2011

Retiree Population -- GrowingRetiree Population -- GrowingYear Active Soldiers Retired Soldiers

1920 204,000 6,000

1950 593,000 42,000

1960 873,000 102,000

1970 1,323,000 282,000

1980 777,000 425,000

1990 732,000 489,000

2009 539,675 828,288*1993

* 211,476 annuitant surviving spouses* 211,476 annuitant surviving spouses• Each year approximately 28,000 Soldiers retireEach year approximately 28,000 Soldiers retire “ “You are MORE THAN A MILLION STRONG!!!”You are MORE THAN A MILLION STRONG!!!”

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%

112th 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• Oppose Health Care Cost-Shifting from the government to military

beneficiaries - NO disproportional TRICARE Fee increases • Repeal in its entirety the SBP – DIC offset for survivors • Expand the concurrent receipt entitlement legislation to include all veterans

that medically retired (disabled) • Ensure no cuts to Medicare/TRICARE Payments • Enact legislation to allow military retirees to use pre-tax earnings to pay

health insurance premiums. • Modernize 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

• Protect 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) • Amend 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 Yes Yes

20+Yrs/50+% Disabil Yes In Process

20+ Yrs/0-49% Disabil Yes No

Under 20 Yrs 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 LegislativeWins 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

• 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 LegislativeWins for 2010/11

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

TRICARE FACTS9.7 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 Adjustment

YearTied to Retired

Pay COLA

DoD Proposal (Tied to HC

Inflation

Difference (loss of

purchasing power)

2011 $460.00 $460.00 $0.002012 $520.00 $520.00 $0.002013 $535.60 $552.24 $16.642014 $551.67 $586.48 $34.812015 $568.22 $622.84 $54.622016 $585.26 $661.46 $76.202017 $602.82 $702.47 $99.652018 $620.91 $746.02 $125.112019 $639.53 $792.27 $152.742020 $658.72 $841.39 $182.672025 $763.64 $1,136.64 $373.002030 $885.27 $1,535.48 $650.212035 $1,026.26 $2,074.28 $1,048.022040 $1,189.72 $2,802.14 $1,612.422045 $1,379.21 $3,785.41 $2,406.20

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

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 2nd-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.

• Eligible if enrolled in Medicare Parts A and 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 2nd payer to Medicare in CONUS• Is 1st payer overseas

• Is LAST payer when there is other health insurance

TRICARE For Life(For Over-65 Beneficiaries)

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-TFL1-866-773-0404 www.tricare4u.com

Medicare Card

• No TRICARE For Life card

• Just show this Medicare card along with your uniformed services ID card

Call 1-800-MEDICARE or visit www.medicare.gov if you need a new card.

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

coverage.

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 www.dmdc.osd.mil/rsl

• Call 1-800-538-9552• Mail proof of Medicare eligibility to:

DMDC Support OfficeATTN: COA400 Gigling RoadSeaside, 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 OrderPharmacy (TMOP) –

“Home Delivery”

• 4 Options Under TMOP:• Use military treatment facility• Use TMOP• 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: www.tricare.osd.mil

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

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

Administered by DDP*Delta)

TRICARE Retiree Dental PlanEnhanced (TRDP)

Cost-of-Living Adjustment (COLA)

Retired pay receives annual COLAs

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

Payment date – 1st 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 Years for Annuity to Premiums Paid Exceed Premiums Paid 5 Years 8 Months 10 Years 1 Year, 1 Months 15 Years 1 Year, 6 Months 20 Years 1 Year, 10 Months 25 Years 2 Years, 2 Months

*30 Years 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 – AUSA and others that are championing these issues through membership in one or more of them.

Approved Retiree PinWEAR 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 Gates29 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)