For the fourth time in five years, the Congressional Budget Office has suggested deep cuts to veterans’ benefits and increases in Tricare fees. These options were put forward as ways to start cutting the nearly $1 trillion national deficit.
CBO Suggests Tricare Rate Hike, Veterans Benefits Cut to Decrease Deficit
The CBO listed over 120 ways to cut federal spending, with increases to fees paid by military retirees using Tricare insurance and decreases in benefits earned by military veterans. These proposals are designed to reduce the federal budget by either cutting costs or increasing revenue.
Even though the CBO makes these suggestions, specifically in regards to military benefits, regularly. However, leaders in the military community are concerned that recent suggestions will appear in President Donald Trump’s budget proposal. This is the fourth time that military benefits have been specifically identified for
Tricare Rate Increases for Military Retirees
There are several different options being suggested for Tricare-related fees and premiums.
First, the CBO is floating the option of increasing enrollment fees for working-age military retirees. This would include military retirees under age 65.
Under this proposal, Tricare Prime rates would double. Currently, retirees who joined the military before 2018 and their families pay $297/year for individual plans and $594/year for family plans. With the proposed increase, individuals could see rates above $600/year and families could pay over $1,000/year for Tricare Prime.
Tricare Select members could see new enrollment fees. Currently there are no enrollment fees for most retirees using Tricare Select. Under the CBO proposal, enrollment rates would start at $485 for an individual and $970 for a family.
Retirees older than 65 could see new enrollment fees for Tricare for Life. This Medicare supplement program is currently offered without additional enrollment fees. Suggested enrollment fees are $485 for individuals and a $970 fee for families. These TFL enrollment fees would be in addition to the monthly premiums many Medicare Part B users pay.
Currently, Tricare for Life covers claim amounts after Medicare Part B. Instead, the CBO suggests that Tricare for Life stop paying any of the $750 cost-sharing paying and only pay 50% of the next $7,000 in claims annually.
Together these suggestions could save around $24 billion by 2028. Adding enrollment fees for Tricare Prime and Select would slash $12.6 billion in that time period, with Tricare for Life fees cutting another $12 billion.
These changes, specifically with Tricare for Life, would decrease the financial burden to the government by the amount of fees collected. Additionally, some Tricare for Life beneficiaries might drop the program entirely and elect to purchase a private supplement instead.
Changes to Veterans Benefits
The Department of Veterans Affairs also has opportunities to save money and decrease the deficit. The CBO has identified several specific ways to reduce costs at the VA.
First, they would narrow eligibility for seven identified conditions that are not related to military service. These include Crohn’s disease, arteriosclerotic heart disease, chronic obstructive pulmonary disease, hemorrhoids, multiple sclerosis, uterine fibroids
Additionally, VA unemployment benefits would end at age 67, which is when full Social Security benefits kick in. This would save about $48 billion by 2028.
$11 billion could be saved by reducing disability benefits to veterans who also receive full Social Security benefits.
Another suggestion would save $38 billion over 10 years by ending disability compensation to 1.3 million veterans with a 30% or lower disability rating.
By eliminating Groups 7 and 8 from enrollment into VA programs, approximately $57 billion could be saved over 10 years. This would remove those without service-related disabilities and incomes above the national threshold as well as those with incomes above or below the geographic thresholds.
Finally, the CBO has suggested that revenue be generated by including VA disability benefits in taxable income. This could generate the $93 billion if all disability payments were taxed, according to the CBO.
Concerns from Veterans Group
The Military Officers Association of America is concerned that the CBO continues to target military retirees as a way to reduce the national debt.
“CBO does this every year. Our biggest concern is that some of these options would make their way into the president’s budget,” Retired Navy Capt. Kathryn Beasley, director of government relations for health issues at the Military Officers Association of America.
Beasley is also concerned that the CBO failed to take into account the recent Tricare rate increases over the last calendar year.
“With all the changes to the military health care system in the past year, we think we simply need to stabilize Tricare,” she added. “It’s been a lot to absorb.”
The CBO stresses that these are simply options included among a broad range of suggestions that will reduce the national debt through cost saving measures or revenue raising opportunities.