A Promise Kept - benefits for retirees from the armed forces

In years past, the Senate Armed Services Committee chairmen have used this space generously provided by the Reserve Officers Association to highlight the importance and contribution of the United States Reserve forces in defending our nation as vital components of our overall armed forces. Typically, this article would also modestly attempt to review major issues for the year ahead. However, in October 2000, the U.S. Congress approved and the President signed into law, as part of the Floyd D. Spence National Defense Authorization Act for FY01, landmark health-care legislation that requires special attention.

As I said on the Senate floor, perhaps the single most important item contained in the new law is military health care, particularly for our retired personnel and their families. History shows they are among the best recruiters the services have.

Thanks to leadership provided by the Senate Armed Services Committee and the hard work of our Personnel Subcommittee Chairman, Sen. Tim Hutchinson (R-Ark.), the new law fulfills an important commitment of "health care for life" made by the recruiters--the U.S. government--beginning after World War II and continuing through the Korean Vietnam Wars to the present. The goal of making that commitment was to encourage service members to remain in uniform and become careerists. Simply put, it was a commitment of health care for life in exchange for their dedicated career service. I am proud of the bipartisan unanimity with which the Senate Armed Services Committee supported this initiative, an initiative never taken before by a congressional committee.

The bottom line is that this law authorizes health-care benefits for Medicare-eligible military retirees and their families.

For as long as I can remember, military recruits and those facing re-enlistment have been told that one of the basic benefits of serving a full military career is health care for life. We know now that this commonly offered incentive was not based in statute, but was, nonetheless, freely and frequently made. It is a commitment that we must honor.

Let me briefly review the history of military health care. Military medical-care requirements for active-duty service members and their families were recognized as early as the 1700s. Congressional action in the late 1800s directed military medical officers to attend to military families whenever possible, at no cost to the family. During World War II, with so many service members on active duty, the military medical system could not handle the health-care requirements of family members. The Emergency Maternal and Infant Care Program was authorized by Congress to meet this need. This program was administered through state health agencies.

The earliest reference in statute defining the health-care benefit for military retirees was in 1956 when, for the first time, the Dependent's Medical Care Act specified that military retirees were eligible for health care in military facilities on a space-available basis. In 1966, this Act was amended to create the Civilian Health and Medical Program of the Uniformed Services, CHAMPUS, to supplement the care provided in military facilities. This legislation specifically excluded from coverage military retirees who were eligible for Medicare, a program that had been enacted by the Congress one year earlier, in 1965.

The exclusion of over-age-65, Medicare-eligible military retirees from guaranteed care of the military health-care system was masked for many years because the capacity of military hospitals and the military medical system exceeded that required to care for active-duty service members. Many Medicare-eligible retirees were therefore able to receive treatment, on a space-available basis, at military facilities. In the 1990s, we began to reduce the size of our military services and the base realignment and closure (BRAC) rounds began to shut down bases and military hospitals all across the nation. The combined effect of fewer military medical personnel to provide care and the closure of over 30 percent of the military hospitals eliminated the excess capacity that had been so beneficial to military retirees. Also during this decade, the retiree population grew dramatically, adding pressure to the military health-care system. The true magnitude of the problem was finally exposed.

All of us have heard from military retirees who served a full career and, in so doing, made many sacrifices. Many times the sacrifices of these heroic veterans resulted in serious medical conditions that manifested themselves at the time in their lives when they were pushed out of the military health-care system. As a nation, we promised these dedicated retirees health care for life, but we were ignoring that promise.

On 23 February 2000, I introduced a bill, S. 2087, that for the first time provided access to mail order pharmaceuticals for all Medicare-eligible military retirees. The legislation also improved access to benefits under TRICARE, and extended and improved certain demonstration programs under the Defense Health Program.

On 1 May 2000, I introduced S. 2486, which added a retail pharmacy component to the previous legislation, providing for a full pharmacy benefit for all retirees, including those eligible for Medicare.

On 6 June, Senator Hutchinson and I introduced S. 2669, a bill that would extend TRICARE eligibility to all military retirees and their families, regardless of age. Later that same day, I amended the Defense Authorization Bill to add the text of S. 2669. This legislation provided uninterrupted access to the Military Health Care System, known as TRICARE, to all retirees.

The Senate bill extended TRICARE eligibility to all military retirees and their families regardless of age. The Defense Authorization Bill passed by the House of Representatives took a different approach.

I am pleased that the conference report to accompany the National Defense Authorization Act for FY01 includes a permanent health-care benefit for retirees, modeled on the Senate bill. I am delighted that we have honored the commitment of health care for life that was made to those who proudly served this nation. This is long overdue.

It had always been my intent to make this health-care benefit permanent. In fact, when I originally introduced my legislation last February, with the support of many in the Senate, there was no time limit on the benefits contained in my amendment. During Senate floor consideration, a discussion arose about whether a budget point of order could be made against the bill due to the mandatory costs of the amendment. At that point, I made the decision to limit the provision to a preliminary two-year period to ensure that there would be no point of order against the authorization bill. We knew of senators who had a legitimate interest in raising such a point of order, and I did not want to put the bill at risk.

All through this process, I have made clear my commitment to make these benefits permanent at the earliest opportunity.

During the Defense authorization conference, we seized an opportunity to make my retiree health-care provisions permanent by converting the benefit to an entitlement and creating an accrual account in the Treasury. This conversion to an entitlement would not occur until FY03.

Let me describe how funding the healthcare benefit through an accrual account would work. Accrual method of financing is more of an accounting mechanism than a change in funding. Using an accrual method of financing does not, in itself, increase the costs of a program. Accrual funding is commonly used in entitlement programs; one example of an accrual account is the military retirement account. The Department of Defense would annually deposit such funds, as determined by the actuarial board, into the accrual account in the Treasury. The Treasury, which would absorb the liability for certain costs attributed to providing health care, would also make an annual deposit to the accrual account. The costs of the health-care benefit would than be paid from the accrual account. There would be no impact on the beneficiary. This funding mechanism will not change how health care is provided, only how the claims are paid.

Understanding that I have broken from tradition here, I am confident this issue commands such attention.

I would be remiss were I to conclude without reiterating my enduring commitment and gratitude to the men and women who serve as Reservists with such distinction. Further, I will continue to work with the new Administration to support the men and women--and their families--serving in our armed forces and as members of our Reserves by undertaking initiatives to improve quality-of-life and to provide funding increases to address declining readiness, aging equipment, and recruiting and retention problems.

Sen. John Warner (R-Va.) was first elected to the U.S. Senate in 1978 and was re-elected to serve his fourth six-year term in 1996. In 1998, he was selected as chairman of the Senate Armed Services Committee. He is a member of the Environment and Public Works Committee. He is also a former chairman and now a member of the Senate Committee on Rules and Administration. Senator Warner's military service began during World War II when in 1945 he enlisted in the U.S. Navy and served on active duty until the summer of 1946, being honorably discharged as petty officer 3rd class, electronic technician's mate. Senator Warner then attended Washington and Lee University in Lexington, Va., and earned a B.S. degree in basic engineering sciences in 1949. He entered the University of Virginia Law School but at the outbreak of the Korean War in 1950, interrupted his studies and commenced a second tour of active military duty, this time in the U.S. Marine Corps. A year later, as a first lieutenant in communications, he volunt eered for duty in Korea and served as a ground officer with the First Marine Air Wing. He remained in the Marine Corps Reserve for 10 years and achieved the rank of captain. Senator Warner finished his law degree at the University of Virginia and in 1956 was appointed an assistant U.S. Attorney and served four years in the trial and appellate divisions. He entered private law practice in 1960. Senator Warner's next public service began when the U.S. Senate confirmed his presidential appointment as under secretary of the Navy in February 1969. During the Vietnam War, he served in the Department of Defense for more than five years, completing his service as the Secretary of the Navy in 1974. Senator Warner has three children.

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