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Pending Famine -- Defense Budget Update on TRR an TRS Issues

September 2010 Navy

by CAPT Ike Puzon, USN (Ret)

As we have reported in the past, there are several reasons to be very concerned about a variety of Defense funding issues and Defense policy issues. First, there is the Presidential Fiscal Responsibility Commission, called the debt commission, which is reviewing all spending by the federal government. It is my opinion Defense spending will be affected by this commission, http://www.fiscalcommission.gov. The debt commission’s stated mandate – leave no stone unturned in cutting spending. Then, there are a variety of Defense committees, http://dbb.defense.gov/nsps.html, reviewing the actual spending of DoD. They have already recommended serious cuts in mandatory and discretionary spending such as closing Joint Forces Command, civilian hiring freeze, and layoff over thousands of civilian works and contractors. Recently, the Congressionally appointed Quadrennial Defense Review Independent Review (of the DoD QDR) http://www.usip.org/files/qdr/qdrreport.pdf released their findings which describe the Department of Defense headed for a “train wreck” if they were not funding correctly. The QDR Independent Review actually recommended increased spending – but, also, recommended reorganization of DoD. It is unlikely that we are at a time that defense spending will increase due to a variety of governmental spending initiatives. What is for sure is that Defense and veterans face a challenging future in their earned benefits. Additionally, defense equipment will be reviewed and most likely programs can be and may be cut. Watch www.ausn.org for updates on these pending legislative and defense issues.

Update on TRICARE Retired Reserve (TRR)

Background

The National Defense Authorization Act for Fiscal Year 2010, Section 705, allows certain members of the Retired Reserve who are qualified for a non-regular retirement, but are not yet age 60 (“gray-area” retirees), to purchase TRICARE Standard coverage. When their coverage becomes effective at age 60, TRICARE Retired Reserve beneficiaries receive the TRICARE Standard (and Extra) benefit. TRICARE Retired Reserve features the deductible and cost sharing provisions of the TRICARE Standard (and Extra) plan for retired members and dependents of retired members. Both the member and the member’s covered family members are provided access priority for care in military treatment facilities on the same basis as retired members and their family members who are not enrolled in TRICARE Prime.

Update (July 2010)

The TRICARE Management Activity is on track to announce the new program on or about 1 September 2010. At that time, Retired Reserve members will be able to qualify for and purchase TRR with coverage to go into effect as early as 1 October 2010. The Office of Management and Budget has cleared the interim final rule for publication in the Federal Register, which could occur as early as the week of 2 August.

AUSN views these premiums cost as excessive and based on individuals instead of a community or pooling as they are done in other TRICARE programs. TMA reports the 2010 TRR premiums are based on the actual costs during calendar years 2007 and 2008 for providing benefits to the population of retired members and their family members in the same age categories as the Retired Reserve population in order to make the underlying group actuarially appropriate. The historical costs were trended forward to 2010 and a two-percent adjustment was applied to cover overhead costs for administration of the program by the government. Similarly, the TRR 2011 premiums are based on the actual costs during calendar years 2008 and 2009 and are trended forward to 2011 with two-percent added for overhead. DoD compared TRR to civilian health care. “In 2009, the average annual premiums for employersponsored health insurance were $4,824 for single coverage and $13,375 for family coverage.” (Employer Health Benefits: 2009 Summary of Findings, The Kaiser Family Foundation and the Health Research and Educational Trust, www.kff.org/insurance/ehbs-archives.cfm). Many associations feel this is an inequity in pricing for the age group of military members.

The new statute requires that qualified Retired Reservists pay premiums equal to the cost of the coverage. The premium rates for the portion of calendar year 2010 during which TRR is in effect and the rates for 2011 are listed below. Type of Coverage: TRR 2010
Premium Rates
TRR 2011
Premium Rates
Member-only $388.31/mo
$4,659.72/yr
$408.01/mo
$4,896.12/yr
Member & family $976.41/mo
$11,716.92/yr
$1,020.05/mo
$12,240.60/yr


We have recently asked Congress to look into this inequity and we have sent out a legislative alert for our members to seek their Congressional involvement in these inequities.

Warning on TRICARE Reserve Select (TRS)

By CAPT Bill Malloy, Retired, The Malloy Group, Inc., an AUSN life member.

If you are on TRICARE Reserve Select and planning to retire from military service, your ability to receive Continued Health Care Benefits Plan (CHCBP) are not guaranteed. While planning for my retirement after 30 years of good service in the Navy, I checked the TRICARE Web site to research my health care options. The TRICARE Web site referred to CHCBP as the option available for TRS clients. The Web site states: “The CHCBP is a premium based care program administered by Humana Health care Services, Inc. (Humana Military). CHCBP acts as a bridge between your military health care benefits and your civilian health care benefits to enable you and your family to receive continuous medical coverage.” Surprisingly, after accepting my application and my first quarter’s premium, I got word from Humana that I was not qualified and my premium would be returned to me. According to policy – an unwritten policy – a Reserve member must have served 30 days continuous active duty within 18 months of application to CHCBP to be eligible. When questioned what active duty meant, Humana had no answer. I had done my share of AT and ADT, but not continuously for 30 days.

This continuous service policy effectively disqualifies nearly all Reserve members cycling out of TRS. Remember that when a Reserve member serves 30 days continuous service, he/she is cycled out of the Reserve and moved to active ranks and, as such, he/she is removed from TRS and put into the TRICARE Standard program. As a Selected Reserve, service requires one weekend per month and two weeks active duty (minimum), equaling approximately 38 days service spread over a year. That single word “continuous” must be replaced with “cumulative” in order to benefit Reserve members currently enrolled in TRS. This policy was born either out of ignorance of the Reserve system, or worse yet, an ill-conceived effort to save money by denying coverage at the peril of those who have served their country longest.

After serving 30 years in the Navy and Navy Reserve, at the age of 53, I must wait until the age of 60 to begin receiving my pension and benefits, one of which is TRICARE for Life. This gap between retirement and age 60 is known as the “gray area,” and the term for someone in my position is “Gray Area Retiree.” Through the hard work of many associations, AUSN, ROA, etc., Congress mandated in October 2009 the establishment of TRICARE Reserve Retired (TRR), a continuation of TRICARE made available to gray area retirees at their own cost. The plan was originally scheduled to be put into effect on 01 June 2010. TRICARE asked for and received an extension of this deadline to October of 2010, and recently has shown no indication that they will meet this deadline as of this writing (as indicated in a recent Navy Times article), nor have they offered any sort of “bridge” for those who are dependent upon this coverage. In fact, with the “continuous” service policy in place, it appears efforts are underfoot to continue to deny coverage to retiring Reservists without any light at the end of this tunnel.

In its current state, this “continuous” service policy intentionally excludes coverage to most Reservists covered in TRS and efforts to correct it have already begun.

If you have encountered similar roadblocks in transitioning to CHCBP for continued health care benefits, please contact ike.puzon@ausn.org or go to www.ausn.org to download a letter to your Congressional representatives or DoD to have your voice heard.

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