Military Retirees See Health Care Victory

Military retirees who have complained for years about the government’s broken promise to care for their health after age 65 are about to receive a rich new package of benefits, thanks to a budget surplus and some well-timed lobbying.

Congress is expected to give its final approval today to legislation giving the nation’s 1.4 million retired career military personnel and their families permanent access to the military’s managed-health plan, including coverage of most medical expenses without co-payments and a substantial prescription drug benefit.

The package is contained in a $310-billion defense authorization bill approved Wednesday by the House and sent to the Senate for action today.

The expansion of coverage, expected to cost about $62 billion over 10 years, would culminate a long lobbying campaign by politically powerful military retiree groups such as the Retired Officers Assn.

With its eye on a $4.6-trillion budget surplus, Congress in recent days has written a number of expensive projects and programs into spending bills. But this package is by far the largest, analysts said.

Military personnel who retire after 20 years of service have built pressure for the plan by arguing that they were promised lifetime health care by recruiters when they joined the military, even though it appears that no explicit guarantee was ever written into law.

Under the current system, retirees younger than 65 take part in the military’s managed health care system, Tricare. When they reach 65, however, they are bumped out of Tricare and must rely on Medicare, which provides less generous medical benefits and no prescription drug coverage. They are allowed to use medical services at military facilities on a “space available” basis.

Cutbacks in military medical facilities in the last decade have curtailed sharply the availability of such services. And many military retirees live too far from installations to travel back and forth for their health care needs.

“The politicians promised us lifetime medical care,” said retired Air Force Col. Frederick W. Fowler of Riverside, who joined the service in 1942. Many career military personnel were willing to accept less in pay, he said, because of expectations that medical coverage would be there when they got older.

“But that’s not what we got,” said Fowler, who is one of about 200,000 military retirees in California.

The plan would allow retirees who are 65 or older and their Medicare-eligible spouses and dependents to enroll in Tricare. Tricare would cover out-of-pocket costs for Medicare-approved services.

The drug benefits would enable retirees to pay $8 for a 90-day mail-order supply of a prescription drug, or 20% of the cost of a prescription purchased at a Tricare network pharmacy. They also would be entitled to use out-of-network pharmacies after paying a $150-a-year deductible.

For most of this year, congressional leaders were saying that the proposed benefit package was too expensive. But in the face of a grass-roots effort by retirees and the pressure of an approaching election, the leadership did an about-face.

Senior military officials added their support when it became clear that the benefit would be an entitlement rather than a budgetary item that would compete each year with other defense priorities.

The retirees thus would join the growing number of groups who have gotten unexpected breaks this season because of Congress’ expectations of a budget surplus.

“They’re one more group to cart away a part of the anticipated surplus,” said Robert D. Reischauer, a former director of the Congressional Budget Office. Given the political potency of military retirees, “many members of Congress probably wish this had never come up.”

The health care package got wide support from House Democrats as well as Republicans. The defense bill was adopted by a 382-31 roll-call vote. Some Democrats complained, however, that the health care entitlement should not be limited to military retirees.

Rep. Thomas H. Allen (D-Maine) said he supported it “with enthusiasm. . . . The tragedy is that the Republicans won’t do the same for all our other seniors.”

At the same time, some budget watchdogs said they were worried that Congress is hastily adding a new entitlement that could add dangerously to the unfunded liability that lurks a decade ahead.

“When you look in the short term, it’s very tempting to add a new entitlement,” said Bob Bixby, president of the Concord Coalition, a budget watchdog group. ‘But when you look 10 years out, there’s still quite a chasm. We’ve got an unfunded liability from current entitlement programs.”

Many big private companies used to offer employees so-called wrap-around health insurance policies, like this one, to supplement Medicare coverage. Many government employees continue to receive them.

But in the face of rising medical costs, such coverage has been rapidly dwindling in the private sector, Reischauer noted. In another decade, fewer than 20% of retirees may have such coverage paid for by former employers, he predicted.

Fowler said he believes that the new plan will be “a step forward.” Even so, he said, he believes that it will be less valuable than the kind of health care available at military installations before the Pentagon closed 37 military hospitals and shrank 23 more into clinics.