Congress is debating recommendations from the Military Compensation and Retirement Modernization Commission:
Congresswoman to Colleagues: 'Man Up' and Overhaul Military Benefits
Under the panel's recommendations, retirees younger than age 65 would initially pay 5 percent of the cost of a private plan, but the figure would increase 1 percent a year until reaching 20 percent of the premium -- or until they're eligible to switch into Medicare and Tricare for Life.
"It's costing about, let's just say round numbers, $500 a year," [California Democrat Rep. Jackie] Speier said. "A 1-percent increase is $5. I mean, I think we have to pitch this for what it is: You're going to have better health care, you're going to have a bigger network, and it's going to cost you one Starbucks Latte a year. Are you in?"
Commissioner Stephen Buyer responded, "Bingo. Thank you."
Buyer, a former Republican congressman from Indiana who headed the Veterans' Affairs Committee, also noted that working-age retirees paid a bigger share of their health care costs in the early 1990s. "In 1994, when it started, it was a 27-percent premium," he said. "It's eroded to 5 percent."
On the one hand, I have always conceded that expecting premiums to keep pace with costs is not inherently unreasonable. Whether 1994 is the appropriate benchmark is another question, but retirees have had their Tricare premiums more-or-less frozen for the last 2 1/2 years while health care costs have (presumably) increased, and that generosity is unsustainable.
But Jackie Speier doesn’t understand the math (and neither apparently does commissioner Buyer). The proposal doesn’t increase our premiums by 1% of our current cost-share per year. The proposal increases our premiums by 1% of the total cost per year.
My current Tricare premium cost-share is (I just checked) $46.32 per month, $555.84 per year. This, I think, is the “$500” to which Speier refers. If this is indeed 5% of a retiree family’s health care costs, then those costs run to $11,1116.80 per year.* It is 1% of this number that the commission is recommending that our premiums be increased every year until they reach 20%; by the end of it, I’ll be paying an extra $1667.52 per year, plus 20% of whatever increase in health care costs occur between now and then.
Now, this may, or may not, be “fair”, and in any case it probably won’t drive us to homelessness. But it’s more than the cost of a yearly Starbucks latte**, and it would be nice if Congressional Democrats stopped pretending otherwise.
* This plan includes no dental services, and involves additional costs for any drugs or services received from a civilian provider.
** I suppose that this number is closer to a Starbucks latte per day, but I’m not sure . . . because I don’t go to Starbucks every day, and neither does anyone else I know, precisely because of these kinds of prices.