Statement of Military Personnel Subcommittee

Chairwoman Susan Davis

The Defense Health Program

“Good afternoon. Today the Military Personnel Subcommittee will hold a hearing on the President’s Fiscal Year 2011 budget request for the Defense Health Program.

“Testifying before us are the senior medical leaders of the Department of Defense. Dr. Charles Rice is the President of the Uniformed Services University of Health Sciences, and is currently Performing the Duties of the Assistant Secretary of Defense for Health Affairs. This office is responsible for the preparation and oversight of the Defense Health budget, as well as the execution of private sector care.

“We also have with us the service surgeons-general, Lieutenant General Eric Schoomaker from the Army, Vice Admiral Adam Robinson from the Navy, and Lieutenant General Bruce Green from the Air Force,  who are responsible for the provision of care in military hospitals and clinics. Gentlemen, welcome.

“This year’s budget request, much like last year’s, lacks many of the objectionable proposals of years past. For example, there are no onerous TRICARE fee increases that seek to place the burden of improving the system on beneficiaries instead of on the Department of Defense. There are no ‘efficiency wedges’, an interesting term that meant, ‘We think the services are spending too much, but we don’t know exactly where, so we are just going to cut their budgets and let them figure it out.’ There are no proposed conversions of military medical positions to civilian medical positions. The absence of these things from the proposed budget is a good start.

“However, this budget request, while devoid of major negatives, is also light on positives. We continue to see little if any evidence of a comprehensive, multi-faceted strategy for moving the military health system forward.

“For the past few years, Congress has been pushing the Department of Defense to improve the health status of the beneficiary population and improve the cost-effectiveness of the care provided to our beneficiaries by adopting proven practices.

“The Fiscal Year 2009 National Defense Authorization Act contained many initiatives to improve preventive and wellness care, but 18 months after it was signed into law, we are still waiting for most of them to be fully implemented. That same bill also gave the Department great latitude and authority to conduct demonstration projects to test other methods of improving health while reducing costs. We would like to hear today how the department plans to take advantage of that authority.

“Further, the Fiscal Year 2010 National Defense Authorization Act contained a requirement for the Department to undertake actions to enhance the capability of the military health system and improve the TRICARE program. Congress felt that such action was needed because private sector care, which was originally intended to be and is still described by the Department as a program to fill gaps in the direct care system, is projected to account for 67 percent of Department of Defense health care expenditures in FY11, versus 65 percent this year.

“It strains logic to characterize something that accounts for almost 70 percent of a program as a ‘gap-filler’. We recognize that several factors have contributed to the unintentional growth in private sector care, such as two wars, staffing shortages, and broad reserve mobilization. That said, without appropriate planning, the effect of these factors could be an irreversible trend, placing medical readiness for future contingencies in jeopardy. Congress clearly believes the Department must develop a long-term plan to maximize the capabilities of the direct care system, and we would like to hear from our witnesses today any ideas they may have.

“This has been a momentous year for health care in this country. Last month, the Patient Protection and Affordable Care Act, and the companion improvements bill, were signed into law. Further, just last week the Senate unanimously passed the TRICARE Affirmation Act, introduced by the chairman of this committee, Ike Skelton, which had previously passed unanimously in the House.

“The TRICARE Affirmation Act explicitly states that TRICARE and nonappropriated fund (NAF) health plans meet all of the health care requirements for individual health insurance under the newly enacted health care reform law. TRICARE and the NAF health plans already meet the minimum requirements for individual health insurance coverage in the recently enacted health care bill, and no TRICARE or NAF health plan beneficiary will be required to purchase additional coverage beyond what they already have.

“However, to reassure our military service members and their families and make it perfectly clear that they will not be negatively affected by the health care reform law, the TRICARE Affirmation Act explicitly states that TRICARE and the NAF health plans meet the minimum requirements for individual health insurance.

“Now that the bills are law, parents across the country will now be able to extend their health coverage to their dependent children up to age 26. Being true to their word, Congressional Democratic leadership ensured that the health reform bills did not involve TRICARE in any way. Since care was taken to guarantee that the Department of Defense health programs under title 10, United States Code, were not touched by the health reform bills, this means that the new law does not allow TRICARE beneficiaries to extend their health coverage to their dependent children.

“Fortunately, a member of this committee, Mr. Heinrich of New Mexico, quickly crafted and introduced a bill, H.R. 4923, the TRICARE Dependent Coverage Extension Act, that would amend title 10 to precisely match the health reform law to allow TRICARE beneficiaries to extend their health coverage to their dependent children up to age 26. Mr. Heinrich, thank you for introducing this important legislation, and I want to let everyone know that I intend to include Mr. Heinrich’s bill in this subcommittee’s mark for this year’s National Defense Authorization Act in a few weeks.”

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