INTRODUCTION
Mister Chairman and distinguished members of the Committee, the National Military and Veterans Alliance (NMVA) is very grateful for the invitation to testify before you about our views and suggestions concerning defense funding issues. The overall goal of the National Military and Veterans Alliance is a strong National Defense. In light of this overall objective, we would request that the committee examine the following proposals.
While the NMVA highlights the funding of benefits, we do this because it supports National Defense. A phrase often quoted "The willingness with which our young people are likely to serve in any war, no matter how justified, shall be directly proportional as to how they perceive the Veterans of earlier wars were treated and appreciated by their country," has been frequently attributed to General George Washington. Yet today, many of the programs that have been viewed as being veteran or retiree are viable programs for the young veterans of this war. This phrase can now read “The willingness with which our young people, today, are willing to serve in this war is how they perceive the veterans of this war are being treated.”
In a long war, recruiting and retention becomes paramount. The National Military and Veterans Alliance, through this testimony hopes to address funding issues that apply to the veterans of various generations.
PAY AND COMPENSATION
Our serving members are patriots willing to accept peril and sacrifice to defend the values of this country. All they ask for is fair recompense for their actions. At a time of war, compensation rarely offsets the risks.
The NMVA requests funding so that the annual enlisted military pay raise equals or exceeds the Employment Cost Index (ECI).
Further, we hope that this committee supports targeted pay raises for those mid-grade members who have increased responsibility in relation to the overall service mission.
NMVA would apply the same allowance standards to both Active and Reserve when it comes to Aviation Career Incentive Pay, Career Enlisted Flyers Incentive Pay, Diving Special Duty Pay, Hazardous Duty Incentive Pay and other special pays. We thank Congress for recognizing, last year that Foreign language professional pay was for a special skill needing to be maintained 365 days a year.
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The Service chiefs have admitted one of the biggest retention challenges is to recruit and retain medical professionals.
NMVA urges the inclusion of bonus/cash payments (Incentive Specialty pay IPS) into the calculations of Retirement Pay for military health care providers. NMVA has received feedback that this would be incentive to many medical professionals to stay in longer.
FORCE POLICY AND STRUCTURE
End Strength.
The NMVA supports funding increases in support of the end strength boosts of the Active Duty Component of the Army and Marine Corps that have been recommended by Defense Authorizers. New recruits need to be found and trained now to start the process so that American taxpayer can get a return on this investment. Such growth is not instantaneously productive. NMVA also hopes that this subcommittee would include language reminding the Department of Defense that once appropriated that each service should proactively recruit to try to attain these numbers.
The NMVA would like to also put a freeze on reductions to the Guard and Reserve manning levels. With the Commission on the Guard and Reserve now active, it makes sense to put a moratorium on changes to End Strength until after they report back to Congress with recommendations. NMVA urges this subcommittee to fund to last year’s levels.
SURVIVOR BENEFIT PLAN (SBP) AND SURVIVOR IMPROVEMENTS
The Alliance wishes to deeply thank this Subcommittee for your funding of improvements in the myriad of survivor programs.
However, there are still two remaining issues to deal with to make SBP the program Congress always intended it to be:
o Ending the SBP/DIC offset and
o Moving up the effective date for paid up SBP to October 1, 2006.
SBP/DIC Offset affects several groups. The first is the family of a retired member of the uniformed services. At this time the SBP annuity the servicemember has paid for is offset dollar for dollar for the DIC survivor benefits paid through the VA, This puts a disabled retiree in a very unfortunate position. If the servicemember is leaving the service disabled it is only wise to enroll in the Survivor Benefit Plan (perhaps being uninsurable in the private sector). If death is service connected then the survivor looses dollar for dollar the compensation received under DIC.
SBP is a purchased annuity, available as an elected earned employee benefit. The program provides a guaranteed income payable to survivors of retired military upon the member’s death. Dependency and Indemnity Compensation (DIC) is an indemnity program to compensate a family for the loss of a loved one due to a service connected death. They are different programs created to fulfill different purposes and needs.
A second group affected by this dollar for dollar offset is made up of families whose service member died on active duty. Recently Congress created active duty SBP. These service members never had the chance to pay into the SBP program. But clearly Congress intended to give these families a benefit. With the present offset in place the vast majority of families receive NO benefit from this new program, because the vast number of our losses are young men or women in the lower paying ranks. SBP is completely offset by DIC payments.
Other affected families are service members who have already served a substantial time in the military. Their surviving spouse is left in a worse financial position that a younger widow. The older widows will normally not be receiving benefits for her children from either Social Security or the VA and will normally have more substantial financial obligations (mortgages etc). This spouse is very dependent on the SBP and DIC payments and should be able to receive both.
Thirty Year Paid-Up SBP - In the FY1999 Defense Authorization Act Congress created a simple and fair paid up provision for the Survivor Benefit Plan. A member who had paid into the program for 30 years and reached the age of 70 could stop paying premiums and still have the full protection of the plan for his or her spouse. Except that the effective date of this provision is October 1, 2008. Many have been paying for as long as 34 years.
The NMVA respectfully requests this Subcommittee fund the SBP/DIC offset and 30 year paid-up SBP if authorized.
CURRENT AND FUTURE ISSUES FACING UNIFORMED SERVICES
HEALTH CARE
The National Military and Veterans Alliance must once again thank this Committee for the great strides that have been made over the last few years to improve the health care provided to the active duty members, their families, survivors and Medicare eligible retirees of all the Uniformed Services. The improvements have been historic. TRICARE for Life and the Senior Pharmacy Program have enormously improved the life and health of Medicare Eligible Military Retirees their families and survivors. It has been a very successful few years.
Yet there are still many serious problems to be addressed:
FULL FUNDING FOR THE DEFENSE HEALTH PROGRAM
The Alliance applauds the Subcommittee’s role in providing adequate funding for the Defense Health Program (DHP) in the past several budget cycles. As the cost of health care has risen throughout the country, you have provided adequate increases to the DHP to keep pace.
Full funding for the defense health program is a top priority for the NMVA. With the additional costs that have come with the deployments to Southwest Asia, Afghanistan and Iraq, we must all stay vigilant against future budgetary shortfalls that would damage the quality and availability of health care.
With the authorizers having postponed the Department of Defenses suggested fee increases, the Alliance is concerned that the budget saving have already been adjusted out of the President’s proposed budget. NMVA is confident that this subcommittee will continue to fund the DHP so that there will be no budget shortfalls.
The National Military and Veterans Alliance urges the Subcommittee to continue to ensure full funding for the Defense Health Program including the full costs of all new programs.
TRICARE PHARMACY PROGRAMS
DoD is suggesting an increase in co-payments at retail pharmacy from $3 to $5 dollars for generic prescriptions, and from $9 to $15 for brand drugs. Generic pharmacy mail order prescriptions would drop from $3 to $0 to align with military clinics.
DoD’s rationalize is that it costs the government twice as much for a drug through the TRICARE Retail Pharmacy program (TRRx) than it does for the same drug through the TRICARE Mail Order Pharmacy Program (TMOP). DoD believes the rise in the TRRx co-payments will increase revenue and force beneficiaries migrate to the TMOP program, where the costs for their prescriptions are lower.
NMVA may understand the motives for this change, but has concerns about how it is being implemented. Often times the retail pharmacy network is the only source to immediately fill a prescription, as many pharmacy beneficiaries are unable to go to a military clinic for the initial prescription. To truly motivate beneficiaries to a shift from retail to mail order adjustments need to be made to both generic and brand name drugs co-payments.
Ideally, the NMVA would like to see the reduction in mail order co-payments without an increase in co-payments for Retail Pharmacy, but….
NMVA suggests that if pharmacy co-payments are adjusted that:
1) The higher retail pharmacy co-payments not apply on an initial prescription, but on refills of a serial maintenance prescription, and
2) If co-payments must be raised on retail pharmacy, that both generic and brand name mail order prescriptions be reduced to zero $$ co-payments.
The National Military and Veterans Alliance urges the Subcommittee to adequate fund adjustments to co-payments in support of recommendations from Defense Authorizers.
TRICARE STANDARD IMPROVEMENTS
TRICARE Standard grows in importance with every year that the Global War on Terrorism continues. A growing population of mobilized and demobilized Reservists depends upon TRICARE Standard. A growing number of younger retirees are more mobile than those of the past, and likely to live outside the TRICARE Prime network.
An ongoing challenge for TRICARE Standard involves creating initiatives to convince health care providers to accept TRICARE Standard patients. Health care providers are dissatisfied with TRICARE reimbursement rates that are tied to Medicare reimbursement levels. The Alliance was pleased and relieved by the Administration's and Congress' recent corrections and improvements in Medicare reimbursement rates, which helped the TRICARE Program.
Yet this is not enough. TRICARE Standard is hobbled with a reputation and history of low and slow payments as well as what still seems like complicated procedures and administrative forms that make it harder and harder for beneficiaries to find health care providers that will accept TRICARE. Any improvements in the rates paid for Medicare/TRICARE should be a great help in this area. Additionally, any further steps to simplify the administrative burdens and complications for health care providers for TRICARE beneficiaries hopefully will increase the number of available providers.
The Alliance asks the Defense Subcommittee to include language encouraging continued increases in TRICARE/Medicare reimbursement rates.
TRICARE RETIREE DENTAL PLAN (TRDP)
The focus of the TRICARE Retiree Dental Plan (TRDP) is to maintain the dental health of Uniformed Services retirees and their family members. Several years ago we saw the need to modify the TRDP legislation to allow the Department of Defense to include some dental procedures that had previously not been covered by the program to achieve equity with the active duty plan.
With ever increasing premium costs, NMVA feels that the Department should assist retirees in maintaining their dental health by providing a government cost-share for the retiree dental plan. With many retirees and their families on a fixed income, an effort should be made to help ease the financial burden on this population and promote a seamless transition from the active duty dental plan to the retiree dental plan in cost structure. Additionally, we hope the Congress will enlarge the retiree dental plan to include retired beneficiaries who live overseas.
The NMVA would appreciate this Committee's consideration of both proposals.
NATIONAL GUARD AND RESERVE HEALTH CARE
FUNDING IMPROVED TRICARE RESERVE SELECT
It is being suggested that the TRICARE Reserve Select healthcare plan be changed to allow the majority of Selected Reserve participate at a 28 percent co-payment level with the balance of the premium being paid by the Department of Defense.
NMVA asks the committee for funding to support a revised TRICARE Reserve Select program.
MOBILIZED HEALTH CARE—Dental Readiness Of Reservists
The number one problem faced by Reservists being recalled has been dental readiness. A model for healthcare would be the TRICARE Dental Program, which offers subsidized dental coverage for Selected Reservists and self-insurance for SELRES families.
In an ideal world this would be universal dental coverage. Reality is that the services are facing challenges. Premium increases to the individual Reservist have caused some junior members to forgo coverage. Dental readiness has dropped. The Military services are trying to determine how best to motivate their Reserve Component members but feel compromised by mandating a premium program if Reservists must pay a portion of it.
Services have been authorized to provide dental treatment as well as examination, but without funding to support this service. By the time many Guard and Reserve are mobilized, their schedule is so short fused that the processing dentists don’t have time for extensive repair.
The National Military Veterans Alliance supports funding for utilization of Guard and Reserve Dentists to examine and treat Guardsmen and Reservists who have substandard dental hygiene. The TRICARE Dental Program should be continued, because the Alliance believes it has pulled up overall Dental Readiness.
DEMOBILIZED DENTAL CARE
Under the revised transitional healthcare benefit plan, Guard and Reserve who were ordered to active duty for more than 30 days in support of a contingency and have 180 days of transition health care following their period of active service.
Similar coverage is not provided for dental restoration. Dental hygiene is not a priority on the battlefield, and many Reserve and Guard are being discharged with dental readiness levels much lower than when they were first recalled. At a minimum, DoD must restore the dental state to an acceptable level that would be ready for mobilization, or provide some subsidize for 180 days to permit restoration from a civilian source.
Current policy is a 30 day window with dental care being space available at a priority less than active duty families.
NMVA asks the committee for funding to support a DoD’s demobilization dental care program. Additional funds should be appropriated to cover the cost of TRICARE Dental premiums and co-payment for the six months following demobilization if DoD is unable to do the restoration.
OTHER RESERVE/GUARD ISSUES
MGIB-SR ENHANCEMENTS
Approximately 7.8 percent of the enlisted Reservists have a Bachelors degree or higher. This makes the Montgomery G.I. Bill for Selective Reserves (MGIB-SR) an important recruiting and retention tool. With massive troop rotations the Reserve forces can expect to have retention shortfalls, unless the government provides incentives such as a college education. Education is not only a quality of life issue or a recruiting/retention issue it is also a readiness issue. Education a Reservist receives enhances their careers and usefulness to the military. The ever-growing complexity of weapons systems and support equipment requires a force with far higher education and aptitude than in previous years.
The problem with the current MGIB-SR is that the Selected Reserve MGIB has failed to maintain a creditable rate of benefits with those authorized in Title 38, Chapter 30. Other than cost-of-living increases, only two improvements in benefits have been legislated since 1985. In that year MGIB rates were established at 47% of active duty benefits. The MGIB-SR rate is 27% of the Chapter 30 benefits. Overall the allowance has inched up by only 7% since its inception, as the cost of education has climbed significantly.
The NMVA requests appropriations funding to raise the MGIB-SR and lock the rate at 50% of the active duty benefit. Cost: $25 m/first year, $1.4 B over ten.
BONUSES
Guard and Reserve component members may be eligible for one of three bonuses, Prior Enlistment Bonus, Reenlistment Bonus and Reserve Affiliation Bonuses for Prior Service Personnel. These bonuses are used to keep men and woman in mission critical military occupational specialties (MOS) that are experiencing falling numbers or are difficult to fill. During their testimony before this committee the reserve chiefs addressed the positive impact that bonuses have upon retention. This point cannot be understated. The operation tempo, financial stress and civilian competition for jobs make bonuses a necessary tool for the DoD to fill essential positions. Though the current bonus program is useful there is a change that needs to be addressed to increase effectiveness.
The primary requirement for eligibility and payment of a bonus upon reenlistment is that the member must have completed less than 14 years of total military service and not be paid more than one six-year bonus or two three-year bonuses under this section. Increasing the eligibility for reenlistment bonuses to 20 years of total military service and increasing the number of bonuses that can be paid under this section could expand the available force pool, as mid-level enlisted reserve members could take advantage of the new bonus criteria. Using a 20 year service cutoff instead of a 14 year period would encourage selected experienced mid-level subject matter experts to reenlist to established high year of tenure or mandatory separation dates and the added retained experience would boost each service’s retention effort in critical skill areas. As each Service uses members of the selected reserve in different capacities, each Service Secretary may use this new authority as required as a force management tool.
The NMVA would like to see the Reserve Chiefs receive the funds and the authority to an increase in eligibility from 14 to 20 years and the ability for reservists to receive bonuses while on active duty orders.
RESERVE/GUARD FUNDING
We are concerned about ongoing DoD initiatives to end "two days pay for one days work," and replace it with a plan to provide 1/30 of a Month's pay model, which would include both pay and allowances. Even with allowances, pay would be less than the current system. When concerns were addressed about this proposal, a retention bonus was the suggested solution to keep pay at the current levels. Allowances differ between individuals and can be affected by commute distances and even zip codes. Certain allowances that are unlikely to be paid uniformly include geographic differences, housing variables, tuition assistance, travel, and adjustments to compensate for missing health care.
The NMVA strongly recommends that the reserve pay system "two days pay for one days work," be funded and retained, as is.
Ensure adequate funding to equip Guard and Reserve at a level that allows them to carry out their mission. Do not turn these crucial assets over to the active duty force. In the same vein we ask that the Congress ensure adequate funding that allows a Guardsman/Reservist to complete 48 drills, and 15 annual training days per member, per year. DoD has been tempted to expend some of these funds on active duty support rather than personnel readiness.
The NMVA strongly recommends that Reserve Program funding remain at sufficient levels to adequately train, equip and support the robust reserve force that has been so critical and successful during our Nation’s recent major conflicts.
ARMED FORCES RETIREMENT HOMES
Following Hurricane Kristina, Navy/Marine Corps residents from AFRJ-Gulfport were evacuated from the hurricane-devastated campus and were moved to the AFRH-Washington D.C. campus. Dormitories were reopened that are in need of refurbishing.
NMVA urges this subcommittee to fund upgrades to the Washington D.C. facility, and also provide funding to rebuild the Gulfport facility.
CONCLUSION
Mr. Chairman and distinguished members of the Subcommittee the Alliance again wishes to emphasize that we are grateful for and delighted with the large steps forward that the Congress has affected the last few years. We are aware of the continuing concern all of the subcommittee’s members have shown for the health and welfare of our service personnel and their families. Therefore, we hope that this subcommittee can further advance these suggestions in this committee or in other positions that the members hold. We are very grateful for the opportunity to submit these issues of crucial concern to our collective memberships. Thank you.
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