Now Hear This November 2010

November 2010 Navy

by CAPT Tom McAtee

Cost of Military Health Care Is "Not Sustainable" Says CNO

CNO presented the figures – the Pentagon's health spending was about $19 billion in 2000-2001, now it is over $50 billion. A future estimate is $64 billion in four or five years. One of his answers to the rising cost challenge is higher copayments that apply to military retirees and their families (active-duty personnel don't pay health fees). The copays haven't been raised since 1995. DoD plans to include higher premiums in next year's proposed defense budget. Premiums, like copays, have not been touched for 15 years. But it will be a tough fight in Congress. Military medical is not a social health care program, it was earned by years of dedicated service.

Career Intermission (Sabbatical) Now a Reality

Authorized by the Fiscal Year 2009 National Defense Authorization Act, the Career Intermission Pilot Program (CIPP) offers a temporary inactivation from active duty – from one-to-three years – for top performing Sailors.

CIPP presents a unique opportunity for members to take a career intermission without penalty and return to active duty to complete a successful Navy career. This limited program provides this opportunity for up to 20 officers and 20 enlisted participants each year until 2012. If selected personnel transition from active duty to the Individual Ready Reserve (IRR), participants accepted in 2012 can use the intermission to remain in the IRR until 2015. While in the program, participants retain full active-duty TRICARE health benefits for themselves and their dependents, as well as all base privileges. Participants also receive a monthly stipend of one-fifteenth of their basic pay. Additionally, to ease the transition into the program, members may elect a Navy-funded permanent change of station move to anywhere in the continental United States when entering the program. The Navy is optimistic this measure will enhance retention in critical skill sets, while allowing greater flexibility in career paths of service members.

TSP Planning 2012 Launch of Roth Option

The board governing the Thrift Savings Plan is setting aside funds to make major changes as it launches a new Roth option, as early as January 2012. The Roth option, which Congress in a 2009 law ordered the Federal Retirement Thrift Investment Board to add to its investment offerings, will let participants make taxable contributions to their retirement accounts and then make tax-free withdrawals in retirement. Under the current system, participants make tax-free investments and then pay taxes when they withdraw money.

A Roth option is expected to benefit mostly uniformed service members and select groups of federal civilian employees, such as federal judges. The Roth option is scheduled to be launched in the first quarter of calendar year 2012. TSP expects its budget will increase by ten percent from $135 million for fiscal 2011 to $148.5 million in fiscal 2012 because of those changes. TSP is funded by fees collected from fund balances, which in 2009 amounted to roughly $0.28 for every $1,000 in a participant's account.

Fewer IAs in FY-11

The total number of Sailors on individual augmentee duty will remain steady through the rest of the year but will begin to decline in 2011. Chief of Naval Operations ADM Gary Roughead, during an interview, also said that Sailors shouldn't expect a major plus-up in Afghanistan as combat operations in Iraq end. Next year, as U.S. forces draw down to nearly zero in Iraq, Navy IAs will rapidly decline. But no change in Afghanistan is foreseen. Navy IAs worldwide total about 10,800. Most Sailors are in support roles that won't significantly change in the immediate future. Navy IAs most in demand in Iraq, according to the Joint Chiefs, are logisticians, contract specialists, engineers, security assistance specialists, headquarters staffers, and military trainers.