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Reducing Military Health Spending

By January 28, 2014Commentary

An insidious threat to our military preparedness is health spending on military members and dependents, which is on pace to more than double from 2000 to 2008 and to become over 10% of the overall military budget.  A report from the Congressional Budget Office discusses the scope of the problem and ways to reduce spending.   (CBO Report)   In 2012, $52 billion was spent on health care by DOD, primarily through TRICARE.  Over 10 million people were covered and half were retirees.  Medicare-eligible retirees have their cost-sharing paid, which leads to over-utilization.  National Guard and Reserve members get coverage even when not on active duty.  CBO says that expansion of benefits and almost-no cost-sharing are primary factors behind the growth in military health spending.    CBO looked at three options Congress has suggested for limiting spending increases:  better management of chronic diseases; more effective administration of the system and increased cost-sharing for retirees.  Only the third could possibly have any major effect on spending, according to the report.

Looking in more detail at cost-sharing, CBO examines several possible options, finding that the savings could be as much as $60 billion over ten years.  Never ones to shy from acknowledgement of uncomfortable facts or controversial opinions, we would observe that increasingly people employed by the Department of Defense having nothing to do with actual defense of the company and very few are actually in the active armed forces.  It is one thing to provide excellent lifetime health care and health care coverage for those who have served in the active forces, particularly in a combat zone, it is another to give it to bureaucrats, and bureaucrats who are fairly highly paid at that.   A good start would be to make a clear distinction between those classes of people involved in the military.  Only those who served in a combat zone should get basically free, no cost-share care for life.  The rest should get no better benefits than available to the general commercially insured population, and when of Medicare age, should rely solely on that program.

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