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2.1 percent pay raise, TRICARE changes make it to final NDAA

Military service members are one step closer to getting a bigger pay raise next year.

The reconciled 2017 defense authorization bill between the House and Senate will include a 2.1 percent pay increase for active duty military, House Armed Services Committee Military Personnel Subcommittee Chairman Joe Heck (R-Nev.) told Federal News Radio at the AMSUS Federal Health Conference in National Harbor, Maryland.

If the bill makes it to law, it will be the largest military pay increase in at least three years.

Heck also said a lot of the TRICARE reform provisions in the House version of the bill will be in the final text.

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“My intel tells me the conference report should be on the floor on Friday,” Heck said.

Heck was tight-lipped about what specific provisions will be in the final bill, stating House Armed Services Chairman Mac Thornberry (R-Texas) doesn’t like the bill details leaked until it is released.

The Obama administration proposed a pay raise of 1.6 percent for 2017, and the Senate’s version of the bill reflected the President’s request.

The 2.1 percent raise is tied to the Employment Cost Index, a measurement of private-sector wage increases.

“The past three years, the pay raise has been lower than the Employment Cost Index (ECI) … in the military it’s spelled out in law that their pay raises would not drop below ECI,” said Kelly Hruska, government relations director for the National Military Family Association. “Service members include this in their family budgeting.”

Hruska said new retirement pay-in requirements and rising TRICARE costs have dipped into service members’ pockets, slimming down the paycheck they see every month.

Not everyone on the House side is on board with the 2.1 percent increase. Rep. Susan Davis (D-Calif.), House Armed Service Personnel Subcommittee ranking member, is worried about where the money will come from.

“I am concerned that by increasing [pay] above the requested amount, we are taking funds away from other critical priorities, including readiness,” Davis said during the April 20 Military Personnel subcommittee markup. “This additional half percent pay raise will provide an E-4 with an additional $11 a month, but that will cost a total of $330 million, which must be taken out of somewhere else in the budget.”

Some news outlets reported the House and Senate reached a $9 billion deal to fund extra provisions in the NDAA.

However, Democrats said it is not a done deal.

The bill would have to use contingency operation funds to pay for the raise, since the bill authorizes the maximum amount of funds allowed in the 2015 budget deal.

TRICARE

As for the TRICARE reforms, added fees may help reduce some costs in the future.

The House version adds premiums for active duty military families and retirees joining TRICARE after 2018.

The bill also expands access to care by eliminating referrals for urgent care and ensuring urgent care access for military families to 11 p.m.

It also standardizes appointment scheduling and first-call resolution when contacting clinics.

“The goal is to see the changes in structure and function be rolled out and evolve in the next two-to-four years,” Heck said in April. “Potential increases in enrollment fees and deductibles will be put into place because we will have increased access and increase the product.”

Still, military personnel groups are critical of the cost increases.

The added cost “sounds minimal compared to what a lot of civilians pay,” said Karen Ruedisueli, deputy director of government relations at the National Military Family Association. “But you have to keep in mind a couple of things. One is that they would be introducing these fees at the same time that the new retirement system is rolling out.”

The reason for the cost hikes is that the government has become increasingly worried about the rising costs of military health care.

A Congressional Budget Office report stated DoD spent $52 billion in health care for service members, retirees and their families in 2012.

“The cost of providing that care has increased rapidly as a share of the defense budget over the past decade, outpacing growth in the economy, growth in per capita health care spending in the United States and growth in funding for DoD’s base budget,” the report states.

The cost of providing health care to military and their families rose 130 percent from 2000 to 2012, the report states.

The report stated expanded benefits, medical costs of wars and the increased use of TRICARE are all causes of the cost increase.

Just because the provisions made it to the final text of the NDAA doesn’t mean a pay raise and TRICARE reforms are done deals.

Veto possibility

In May, the White House said it would veto the NDAA. One of the qualms with the bill was the pay raise.

The bill “places restrictions on the President’s authority to set an alternative pay adjustment for members of the uniformed services at 1.6 percent basic pay, which would save $336 million in FY 2017 and $2.2 billion through FY 2021. The President’s FY 2017 pay proposal would allow the Department to achieve a proper balance between DoD’s obligation to provide competitive pay to service members and its responsibility to provide troops the finest training and equipment possible,” the statement of administrative policy states.

The policy also takes issue with the TRICARE reforms stating the bill eliminates most of the savings created by the Obama administration’s TRICARE plan.

“It also creates a complex system of separate benefits for members and retirees based on their dates of initial entry into military service,” the policy stated.