[Congressional Record Volume 144, Number 56 (Thursday, May 7, 1998)]
[Senate]
[Pages S4550-S4552]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          MILITARY HEALTH CARE

  Mr. CLELAND. Mr. President, one of my proudest honors as a United 
States Senator is to serve as the Ranking Member on the Personnel 
Subcommittee of the Senate Armed Services Committee. It is in this 
capacity that I feel I can contribute to supporting the men and women 
in our Armed Forces.
  Last week I introduced a military health care proposal which I 
referred to as KP Duty, as in ``Keeping Promises Duty.'' In the 
military, KP stands for ``kitchen police'' which is a term for messhall 
clean up which recruits are tasked to do when they go through basic 
training. This KP duty I am proposing is for all of us to clean up a 
commitment--the promises made to our servicemen and women.
  The Fiscal Year 1998 National Defense Authorization Act (P.L. 105-85) 
included a Sense of the Congress Resolution which provided a finding 
that ``many retired military personnel believe that they were promised 
lifetime health care in exchange for 20 or more years of service.'' 
Furthermore, it expressed the sense of Congress that ``the United 
States has incurred a moral obligation'' to provide health care to 
members and retired members of the Armed Services and that Congress and 
the President should take steps to address ``the problems associated 
with the availability of health care for such retirees within two 
years.'' I authored that resolution, and today in year one of this two-
year challenge, my friend and colleague, Senator Kempthorne, Chairman 
of the Personnel Subcommittee of the Senate Armed Services Committee, 
and I are ready to take the initial steps in fulfilling this obligation 
to our retirees.
  In March, I hosted a military health care roundtable at Fort Gordon, 
Georgia. The positive and supportive working relationship between the 
Eisenhower Army Medical Center and the Veterans Administration Medical 
Center in Augusta, Georgia was highlighted by the panel speakers and 
audience members. These facilities have established a sharing agreement 
which allows each to provide certain health care services to the 
beneficiaries of the other. This type of joint approach has the 
potential to alleviate a significant portion of the accessibility 
problem faced by military retirees, especially given the reduction in 
DoD medical treatment facilities. In spite of these benchmarked efforts 
in cooperative care, beneficiaries who were in the audience still 
attested to insufficient accessibility to resources to meet their 
needs. One of the audience participants who was commenting on a health 
problem stated, ``my life isn't the same as it was a year ago, and all 
I got was shuttled from one thing to another''.
  In a statement I submitted last week, I discussed a legislative 
initiative which would require the Department of Defense (DoD) and 
Department of Veterans Affairs (VA) to work toward enhancing their 
cooperative efforts in the

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delivery of health care to the beneficiaries of these systems. This 
initiative includes several elements to enhance health care 
efficiencies. It provides for a study which would determine the 
demographics, geographic distribution and health care preferences and 
an assessment of the overall capacity of both systems to 
treat beneficiaries. The second provision would examine existing 
statutory, regulatory and cultural impediments that are currently 
precluding the optimal cooperation of DoD and VA in health care 
delivery. Finally, this initiative provides for the acceleration of 
several ongoing efforts such as the Electronic Transfer of Patient 
Information and the DoD/VA Federal Pharmaceutical Steering Committee. 
This legislative initiative was included in the Fiscal Year 1999 
National Defense Authorization Act.

  The legislation I wish to discuss today addresses the retirees who 
are aged 65 and older. The Government Accounting Office reports that of 
the population eligible for military health care, approximately 52% are 
retirees and dependents. Seventy one percent of military retirees are 
under the age of 65, while 29% of military retirees are aged 65 and 
older.
  As we consider options for improving the DoD and VA health care 
systems, we need to be mindful of some basic facts. About 60% of 
retirees under the age of 65 live near a military treatment facility 
while only about 52% the retirees aged 65 and older live near such a 
facility. About two thirds of retirees under the age of 65 use the 
military health system. In comparison, only about a quarter of the 
retirees aged 65 and older use military medical facilities, and then 
only on a space available basis and primarily for pharmacy services.
  According to a 1994-95 survey of DoD beneficiaries, just over 40 
percent of military retirees, regardless of age, had private health 
insurance coverage. About a third of retirees aged 65 and older also 
reported having additional insurance to supplement their Medicare 
benefits. This is in part, due to their belief that the military health 
care system would take care of their needs throughout their lifetime.
  The Military Health System has changed dramatically in recent years. 
The collapse of the Soviet Union and the end of the Warsaw Pact led to 
a major reassessment of U.S. defense policy. The DoD health care system 
changes have included the establishment of a managed care program, 
numerous facility closures, and significant downsizing of military 
medical staff. In the last decade, the number of military medical 
personnel has declined by 15 percent and the number of military 
hospitals has been reduced by one-third. The Fiscal Year 1994 National 
Defense Authorization Act directed DoD to prescribe and implement a 
nationwide managed health care benefit program modeled on health 
maintenance organization plans and in 1995, beneficiaries began 
enrolling in this new program called TRICARE. With over 8 million 
beneficiaries, it is the largest health maintenance organization plan 
in the Nation.
  One of the problems with TRICARE is what happens to retirees when 
they reach the age of 65. At that point, they are no longer eligible to 
participate in any TRICARE option. The law currently provides for 
transition from military health care to Medicare for these 
beneficiaries.
  Mr. President, this is not the right solution, especially given the 
fact that Medicare does not currently reimburse the DoD for health care 
services, although Congress recently authorized a test of this concept, 
nor does Medicare include a pharmacy benefit. In addition, as the 
military begins to close and downsize military treatment facilities, 
retirees aged 65 and older are unable to obtain treatment on a space 
available basis. These retirees are, in effect, being shut out of the 
medical facilities promised to them.

  The Medicare Subvention demonstration project that is scheduled to 
begin enrollment in the near future will only benefit retirees who live 
near military treatment facilities--which is only about half of all 
retirees. Those retirees living outside catchment areas won't even 
benefit from subvention. Additionally, there are ongoing efforts to 
initiate a Veterans Affairs Subvention test. The limiting criteria of 
these tests is that they require beneficiaries to live near the 
respective treatment facilities. To accommodate those beneficiaries who 
do not live near treatment facilities or within a catchment area, we 
must explore other alternatives, including, the Federal Employees 
Health Benefits Program (FEHBP) option that has received so much 
attention recently.
  There has been an overwhelming outpouring of support for offering 
FEHBP to military retirees. Although this program has achieved a 
successful reputation among federal employees, it is a very costly 
alternative which deserves close scrutiny, along with other health care 
options. I appreciate the fact that there are many advantages to FEHBP. 
Furthermore, I share the view that health care for military retirees 
should be at least as good as the health care we in the Congress afford 
ourselves.
  However, there may be other options, or a combination of options that 
will allow us to keep our promises with our older retirees in a 
fiscally responsible manner. The option I am about to discuss is 
included in the Fiscal Year 1999 National Defense Authorization Act. 
Senator Dirk Kempthorne, Chairman of the Personnel Subcommittee of the 
Senate Armed Services Committee, and I have worked closely on this 
issue over the past several months. Under his leadership, the Personnel 
Subcommittee held hearings on this issue which included testimony by 
the service Surgeons Generals, the Acting Assistant Secretary of 
Defense for Health Affairs, and representatives from military 
associations. Together, we have developed a plan to assist the Nation 
in meeting our obligation to the military retirees.
  This legislation requires demonstrations to be conducted of three 
health care options: the Federal Employees Health Benefits Program 
(FEHBP), TRICARE Standard (which replaced the Civilian Health and 
Medical Program of the Uniformed Services or CHAMPUS), and Mail Order 
Pharmacy. Two different sites will be selected for each of the 
respective demonstrations.
  Through FEHBP, military retirees could choose from different plan 
options. As with active and retired federal employees, military 
retirees who enrolled would be required to pay a premium. The amount of 
the premium would vary depending on which plan was chosen and the 
government and beneficiary share in the cost of the selected plan.
  The TRICARE Standard option would be to extend the current coverage 
beyond age 64. Under this extension, the TRICARE Standard would serve 
as a supplemental policy to Medicare, covering most out-of-pocket costs 
not covered by Medicare. Even though this proposal would require 
retirees to enroll in Medicare part B, retirees should experience lower 
out-of-pocket costs. Because TRICARE Standard is an established program 
within DoD, the existing infrastructure could be used without 
significant increase in administrative costs.

  Finally, the Medicare program does not provide coverage for 
outpatient prescriptions, a major expense for older people, who tend to 
use more prescription drugs. Military retirees can get prescriptions 
filled at military treatment facility pharmacies, but these facilities 
are not readily accessible to all older retirees. Expanding this mail 
order benefit to those who do not live near military facilities and do 
not currently have a mail order benefit would fill an important health 
care coverage gap. This would be the third demonstration.
  The demonstrations will be scheduled to conclude within the same time 
frame as the ongoing Medicare Subvention test, approximately January 1, 
2001, so all the test results can be simultaneously compared in 
determining the best option or combination of options to accommodate 
the retirees aged 65 and older.
  Mr. President, as you know, S. 1334, a bill to provide for a test of 
FEHBP has 60 cosponsors. We agree that FEHBP warrants further 
examination which is why we have included it in the Committee's 
legislative proposal. We are very committed to finding the right 
solution to this shortcoming which is why we feel that evaluating 
several options is critical in this decision process. The proposal 
included in the Defense Authorization Act is far more comprehensive 
than S. 1334. At the end of these demonstrations, we would

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have extensive data upon which we could base an informed decision 
regarding the best way for our Nation to provide health care to those 
who have earned it through the sacrifices inherent in military 
service.

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