House approves military pay raise

The House on Friday passed a bill giving military personnel a 1.7 percent pay raise in 2013, as well as limiting increases to certain prescription drug co-pays under the TRICARE program.

The chamber spent Thursday and Friday debating the fiscal 2013 National Defense Authorization Act, eventually passing it Friday afternoon 299-120 after considering 142 amendments. On Thursday, the House Appropriations Committee advanced a defense spending bill that also includes a 1.7 percent pay boost for service members.

The Defense authorization legislation rejects the Obama administration’s recommendations to raise premiums for military retirees based on their retirement pay, among other fee hikes. “These proposals went too far and were not included in the bill,” committee Republicans said in a statement. TRICARE serves 9.3 million beneficiaries, including 5.5 million military retirees.

Under Obama’s plan, premiums for TRICARE retirees under the family plan would increase between $31 and $128 per month, with those in the upper-income bracket seeing the biggest hike. The White House in its budget recommendations also proposed new co-pays, initiation of standard and extra annual enrollment fees, and adjustments to deductibles and catastrophic coverage caps, all in an effort to keep pace with medical inflation The administration said its recommended changes to TRICARE would save the Defense Department an estimated $12.9 billion in discretionary funding and generate $4.7 billion in mandatory savings on Medicare-eligible retiree health care over the next five years. It is projected to save the department $12.1 billion over the next 10 years.

The House-passed Defense authorization legislation modestly raises TRICARE co-pays for brand and nonformulary drugs in 2013, ranging from an additional $4 to $19 either monthly or every three months, depending on the enrollee’s prescription refill schedule. It also would cap pharmacy co-pays beginning in 2014 so that such fees are in line with the annual retiree cost-of-living adjustment. The costs associated with the fee increases would be offset by a five-year pilot program requiring TRICARE for Life recipients to obtain maintenance drug refills through the mail.

The president proposed increases for drug co-payments in the brand and nonformulary categories that range from an additional $14 to $26 per month or every three months, depending on the refill schedule. TRICARE beneficiaries would retain the $5 monthly co-pay for generic drugs under both the House bill and administration’s proposal.

Obama will veto the $643 billion bill if it reaches him, according to a statement from the White House. The Senate’s version of the authorization legislation, including the provisions related to TRICARE, likely will be different from the House version.

“The administration is very disappointed that the committee did not support the proposed TRICARE fee increases and included Section 718, which, while supporting some fee increases, caps them at levels below those allowed under current law and below the requested authorization. If Section 718 remains in the bill, it would only provide five year savings of $2.6 billion,” the White House said in a statement.

Like most federal agencies, Defense is under pressure to cut costs and streamline its operations. The bill the House approved is $3.7 billion more than Obama’s 2013 request, which has put lawmakers and administration officials at odds over where and how to make budget cuts.

The bill also includes an amendment offered by Rep. Elijah Cummings, D-Md., that expands protections under the Servicemembers Civil Service Relief Act to those personnel who are part of a contingency operation, surviving spouses of military personnel and totally disabled veterans. The law protects service members from improper home foreclosures, evictions and other negative financial consequences resulting from military service. Cummings’ amendment also increases the length of time for foreclosure proceedings and fines for violations of the law.

The Senate Armed Services Committee plans to mark up its version of the 2013 Defense authorization bill next week.