House chairman rules out military healthcare reform this year

The House Armed Services Committee likely will not include changes to the military’s healthcare system in the 2016 defense policy bill being crafted this week, according to Chairman Mac Thornberry (R-Texas). 

“I’ve always said healthcare’s the most complicated issue that any of us deal with, and so you really want to understand the consequences of what you do with healthcare,” he recently told The Hill.

A congressionally appointed commission proposed 15 recommendations earlier this year to reform the military pay and benefits system, which Pentagon leaders say is too expensive and unsustainable. 

The commission recommended allowing troops to continue receiving care at military treatment facilities, but moving family members, reservists and some retirees onto commercial insurance plans, with allowances to offset the costs. 

{mosads}Thornberry said that recommendation requires “some further study.”   

Although lawmakers have hailed the commission’s work in general, the proposal to reform healthcare benefits met with apprehension from some veteran and military family organizations, who fear it would lead to rising costs and worse care. 

There are also indications the committee, which is set to begin marking up its draft of the bill this week and vote on it next week, will not adopt another controversial recommendation to reorganize the military retirement benefits system.

The commission recommended moving from a system paying retirement benefits to those who serve at least 20 years to one modeled after a 401(k) plan that would benefit more troops. It would also allow those serving 20 years or longer to receive lump-sum retirement payments instead of monthly payments. 

A House aide said Thornberry is opposed to “piecemeal reforms” because the current military benefits system is so interlinked, and making changes to one area could have unintended consequences elsewhere. 

“The commissioners said ‘You can’t take this piecemeal, there’s a cost-balance and [so] we encourage you to do it or not do any of it.’ He took that seriously,” the aide said. 

“There’s [a sense] that we don’t want to do harm, and there are always unintended consequences to these things,” the aide added. 

However, Thornberry said the prospect of some of the commission’s recommendations making it into the bill is “pretty good.” 

“We’re moving ahead with what we think makes sense,” he said, but acknowledging things could still change. 

The House’s defense policy bill will have to be reconciled with the Senate’s version later in the year, and the Pentagon has not yet weighed in on the recommendations, he said. The commission’s recommendations on healthcare and retirement benefits were the most controversial.

The committee begins marking up the bill this week and is set to vote on it April 29. The Obama administration is due to submit its views and recommendations on April 30. 

“We can obviously make adjustments as seem to make sense, taking into account their concerns,” Thornberry said. 

Defense Secretary Ashton Carter signaled support for reforming retirement benefits during a visit with troops to Fort Drum in New York last month. 

“I’m looking very hard right now at blended retirement plans that would be similar to the 401(k) mechanism that is widespread in civil society,” Carter said. “Because 80 percent of our troops leave service before 20 years are up [and] in the current system, if they leave before 20 years, they leave with nothing.” 

“So we want to look at that and see if we can create a choice that … allows us to be more similar to other institutions and therefore competitive with them in getting people join us and stick with us,” he added. 

The proposal has drawn mixed reactions from veterans groups and active duty troops. On Friday, five groups sent the Armed Services committees a letter endorsing it.

“We believe that the recommendation enhances the current retirement system and is a valuable recruiting tool for a new generation of war fighters,” said a letter signed by Air Force Association, Enlisted Association of the National Guard, Reserve Officers Association and Veterans of Foreign Wars officials. 

The Military Officials Association of America, however, has lobbied against the proposal. The group says reforms should not come at the expense of those who serve for 20 years and that the changes could affect the military’s ability to retain service members for 20 years.

The contentiousness of reforming the military’s benefits systems led lawmakers to create the Military Compensation and Retirement Modernization Commission in 2013. 

Faced with nearly $1 trillion in defense cuts over a decade under the 2011 Budget Control Act, the Pentagon has tried to trim its budget, eying personnel costs that have grown exponentially since 9/11.

In the past several years, the Pentagon has recommended increasing healthcare fees, slowing the growth of pay raises and housing allowances, and cutting support for base grocery and retail stores. 

Some veterans groups and military family organizations have fiercely opposed the Pentagon’s efforts, accusing the department of going after low-hanging fruit instead of taking more difficult actions. 

Thornberry said he appreciated the commission’s hard work and that “there’s a lot of it that makes sense.” 

“I think it was really helpful to have that overall look at pay and benefits rather than the ‘nickel and diming’ kind of stuff that comes up in the budget every year,” he said.