U.S. Senate Committee on Appropriations

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 Alliance was founded in 1996 as an umbrella organization to be utilized by the various military and veteran associations as a means to work together towards their common goals. The Alliance¡¦s organizations are:

ƒæ American Logistics Association ƒæ American Military Retirees Association ƒæ American Military Society ƒæ American Retiree Association ƒæ American World War II Orphans Network ƒæ AMVETS National Headquarters ƒæ Catholic War Veterans ƒæ Class Act Group ƒæ Gold Star Wives of America ƒæ Korean War Veterans Foundation ƒæ Legion of Valor ƒæ Military Order of the Purple Heart ƒæ National Association for Uniformed Services ƒæ National Gulf War Resource Center ƒæ Naval Enlisted Reserve Association ƒæ Naval Reserve Association ƒæ Non Commissioned Officers Association ƒæ Society of Medical Consultants to the Armed Forces ƒæ Society of Military Widows ƒæ The Retired Enlisted Association ƒæ TREA Senior Citizens League ƒæ Tragedy Assistance Program for Survivors ƒæ Uniformed Services Disabled Retirees ƒæ Veterans of Foreign Wars ƒæ Vietnam Veterans of America

The preceding organizations have almost five million members who are serving our nation, or who have done so in the past and their families.

The overall goal of the National Military and Veteran¡¦s Alliance is a strong National Defense. In light of this overall objective, we would request that the committee examine the following proposals.

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. DoD's new Medicare Eligible Retiree Health Care Fund has been put into place. This addition should help stabilize funding for military health care in the future. Additionally, reducing the catastrophic cap, improving the TRICARE Prime Remote program and making other TRICARE improvements have improved the situation of numerous other TRICARE beneficiaries. It has been a very successful few years. But there are still many serious problems to be addressed:

AN ADEQUATE HEALTH CARE BUDGET

As always, the most pressing issue facing military health care is an adequate Defense Department Health Care Budget. This is again the Alliance's top priority. 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. IMPROVING TRICARE STANDARD

While great steps forward have been made in health care for those uniform services' beneficiaries covered under TRICARE Prime and TRICARE for Life, TRICARE Standard has withered on the vine. TRICARE Standard has truly become the stepchild of military health care. The Alliance asks that this Committee financially support this final group of forgotten beneficiaries. Some improvements in the situation can be easily accomplished, others will indeed be difficult.

There should be a requirement that all TRICARE Standard beneficiaries be contacted at least once a year with information of the changes in the program and benefits. The Alliance believes that there is no other health care plan in the country that does not contact its beneficiaries on at least an annual basis. The TRICARE Management Activity (TMA) is considering plans to improve communications between TRICARE Prime and its beneficiaries. Including TRICARE Standard in such a plan would be an easy improvement.

An additional population needing to be contacted is the ¡§gray area¡¨ Reservists when they reach age 60 and finally qualify for retirement pay. Too often, this group of retirees is unaware of the automatic enrollment, and individuals carry unneeded medical coverage. They should be informed of the TRICARE Standard as a benefit, and what it covers.

NMVA requests appropriations funding to support TMA making these contacts.

A much harder improvement in TRICARE Standard involves creating initiatives to convince health care providers to accept TRICARE Standard patients. TRICARE reimbursement rates are tied to Medicare reimbursement levels. It is well known that health care providers are dissatisfied with TRICARE reimbursement levels. The Alliance was pleased and relieved by the Administration's and Congress' recent corrections and improvements in Medicare reimbursement rates. This correction in the Medicare program will also be a great help to the TRICARE Program.

Yet this is not enough. The history of low and slow payments in the past for TRICARE Standard as well as what still seems like complicated procedures and administrative forms makes 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 Medicare reimbursement rates.

One key tool in making low-cost MTF care available to military beneficiaries has been the resource sharing program: putting civilian health care professionals and support personnel into military hospitals and clinics. Currently, there are 3,500 people working and providing services in MTFs serving approximately 2 million patients annually.

The Alliance is concerned that a gap exists in the transition of this program from its current configuration to that of the new generation of T-Nex contracts. All current agreements must end with the current contracts, yet there is no clear guidance on how the Services will continue the resource share program, nor when the individual MTFs will be able to renew access to the current resources to implement this program.

The National Military Veterans Alliance request that this committee provide transitional funding to insure uninterrupted service between contracts.

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. Adding these procedures was necessary to fulfill the intent of the TRDP to maintain good dental health for retirees and their family members. With this modification the TRDP achieved equity with the active duty dental 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 Alliance would appreciate this Committee's consideration of both proposals.

NATIONAL GUARD AND RESERVE HEALTH CARE

First, we would like to thank the efforts by the office of Secretary of Defense and TRICARE Management Activity for revising Health Affairs Policy 96-018.

The changes made to TRICARE Prime allow families of activated Guardsmen or Reservists to be eligible for TRICARE Prime when the military sponsor has active duty orders for more than 30 days. This revision also allows the family to enroll without enrollment fees or co-payments. Changes made to the TRICARE Prime Remote for Active Duty Family Members program allow the families of activated Reserve and National Guard, Prime Remote coverage, no matter where the sponsor lives as long as they resided with the service member before he or she left for their mobilization site or deployment location, and the family continues to reside there. We are very thankful for these improvements, however, additional changes are still needed.

MOBILIZED HEALTH CARE--MEDICAL READINESS OF RESERVISTS

The number one problem faced by Reservists being recalled was medical readiness. The government¡¦s own studies indicate that between 20-25% of Reservists are without healthcare plans. Further study will show that another group is under insured. Congress needs to recommend a healthcare coverage for Reservists that could bridge this medical gap.

A model for healthcare would be the TRICARE Dental Program, which offers subsidized dental coverage for Selected Reservists and self-insurance for SELRES families. Reservists pay $8.14 per month for an individual¡¦s enrollment and $50.88 per month for a family enrollment. If mobilized to active duty for more than 30 consecutive days, the costs will be $8.14 for a single enrollment and $20.35 for a family enrollment. Members of the Individual Ready Reserve (Other than Special Mobilization Category) and their family members, and the family members of the Selected Reserve (not on active duty) will pay a new monthly rate of $20.35 for a single enrollment and $50.88 for a family enrollment.

In an ideal world this would give universal dental coverage. Reality is that the services are facing some problems. Premium increases to the individual Reservist have caused some of the junior members to forgo coverage. Dental readiness has dropped. Mobilized members have been ¡§readied¡¨ by tooth extraction rather than tooth filling. The Military services are trying to determine how best to motivate their Reserve Component members. It is hard to make dental coverage mandatory if the Reservist must pay even a portion of it.

Position: The National Military Veterans Alliance supports 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 we believe it has pulled up overall Dental Readiness. Medical coverage plans should be explored to insure universal medical coverage for Guardsmen and Reservists; Reservists and their dependents should be allowed to join TRICARE.

SOME OPTIONS

The Department of Defense has a model program extending FEHBP coverage to mobilized employees where basic employees premiums are paid. Other federal agencies can adopt this policy on an agency-by-agency basis but this policy is not uniform across all federal agencies.

Position: As an option to TRICARE standard, the Alliance would like to see the government pay equivalent premiums directly to private employers if these companies choose to extend health coverage to the Reservist as an option. DEMOBILIZED HEALTH 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 more than six years total active federal service are eligible for 120 days of transition health care following their period of active service. Guard and Reserve members with less than six years service will get 60 days of continued medical care. Families were excluded from this coverage. An initial fix was a worldwide demonstration project, which permitted family members to be covered under this plan.

Position: While 75 to 80% of returning Reservists will have healthcare when they return to their employers, the balance will be without healthcare beyond the current 120 or 60-day limitation. A. There should not be a demarcation at six years between 60 and 120 days. The jobs performed by the Reserve Component members were identical; their demobilization healthcare coverage should be identical. B. Demobilization transition TRICARE coverage for the post activated Reserve Component members should be expanded. A civilian is allowed up to 18 months of coverage under COBRA when transitioning between jobs. Military should be permitted the same. Further: The National Military Veterans Alliance supports OSD efforts to ensure the quality of demobilization processing. Each returning Guardsman or Reservist should be given a benchmark separation physical to document their health as they return from the ¡§battlefields.¡¨

NMVA asks the committee for funding to support DoD¡¦s demobilization health care demonstration programs.

OTHER RESERVE/GUARD ISSUES (LONG-TERM)

AGE 55 RETIREMENT PAYMENT AGE

Over the last two decades, more has been asked of Guardsmen and Reservists than ever before. The nature of the contract has changed; Reserve Component members would like to see recognition of the added burden they carry. Providing an option that reduces the retired with pay age from 60 to 55 years carries importance in retention, recruitment, and personnel readiness. Some are hesitant to endorse this because they envision money would be taken out of other entitlements, benefits, and Guard and Reserve Equipment budgets. The National Military and Veteran¡¦s Alliance recommends that Reserve retirement with pay be allowed prior to age 60, but be treated like Social Security retirement offset, at lower payments when taken at an earlier age. If a Reservist elects to take retired pay at age 55, it would be taken at an actuarially reduced rate, keeping the net costs at zero.

Most of the cost projected by DoD is for TRICARE healthcare, which begins when retirement pay commences. Again following the Social Security example, Medicare is not linked to Social Security payments. NMVA suggests that TRICARE for Reservists be decoupled from pay, and eligibility remain at age 60 years with Social Security as a model, Reservists understand the nature of offsetting payments. The only remaining expense in this proposal would be the administrative startup costs and adjustments to retirement accrual contributed to the DoD retirement accounts.

PAY AND COMPENSATION FOR GUARD AND RESERVE

We are concerned about a recent DoD initiative 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 Healthcare.

The National Military and Veterans Alliance holds reservations with a retention bonus as a supplemental source. Being renewed annually bonuses tend to depend on the national economy, deficit, and political winds. Further, would this bonus just be grandfathered to current Reservists, with some future generation forfeiting the bonus as an income source. The NMVA strongly recommends that the reserve pay system "two days pay for one days work," be retained, as is.

OTHER RESERVE/GUARD RECOMMENDATIONS (SHORT-TERM)

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. This stems from the concern about a recent DoD plan, the ¡§Defense Transformation for the 21st Century Act of 2003¡¨ that would potentially use some of these same ¡§Reserve¡¨ dollars to fund involuntary 90-day pre-mobilization call up for training. This funding should come instead from the active duty budget, which will most directly benefit from this ¡§deployment standards¡¨ training.

The NMVA strongly recommends that Reserve Program funding remain at sufficient levels to adequately train and support the robust reserve force that has been so critical and successful during our Nation¡¦s recent major conflicts.

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. The new health care programs for Uniformed Service retirees 65 years and over (TRICARE for Life and the Senior Pharmacy) and active duty members and their families (TRICARE Prime Remote and the reduction of the catastrophic cap) have been great successes. We are also very appreciative of recent changes that impact our ¡§citizen soldiers¡¨ in the Guard and Reserve. But there is still work to be done to improve health care programs for all qualified beneficiaries, and benefits and mission funding for our Guardsmen and Reservists. We understand that all of these issues don¡¦t fall under the direct purview of your subcommittee. However, 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 speak on these issues of crucial concern to our members. Thank you.