AFSA HQ Newsletter – February 14th


FY 2013 Budget Released; DoD Funding Cut As Expected

President Obama’s $3.8 trillion, FY 2013 budget proposal was delivered to Congress on Monday.  The request for the Department of Defense (DoD) includes $525.4 billion in discretionary budget authority to fund base defense programs and $88.5 billion to support Overseas Contingency Operations (OCO), primarily in Afghanistan.  The total, $613.9 billion, is about $33 billion less than the current year’s budget.  It allows a military pay raise of 1.7 percent; will increase the basic housing allowance by 4.2 percent and basic allowance for subsistence by 3.4 percent; and provide $8.5 billion for family support programs.  According to the budget documents we reviewed, increases in pays and allowances will keep pace with expected increases in private-sector compensation for the next couple of years.  But in FY 2015 and beyond, basic pay raises will be held down in an effort to slow the growth in compensation costs.

The Air Force portion is $154.3 billion, a reduction of nearly five percent as compared to the $162.5 billion the service received in FY 2012.  As previously reported the department has plans in place to eliminate nearly 300 aircraft and reduce overall personnel end strength by 9,900 Airmen in the coming years.  In addition to higher pay and allowances, the Air Force budgeted more than $700 million for family programs including child development centers, and the family housing budget was increased by $93 million to meet a service goal of 53,000 privatized housing units by the end of the next fiscal year.

Other provisions in DoD’s proposed budget will increase TRICARE premiums and fees, direct a review of military compensation and retired pay and call for more base realignment and closure rounds.  We cover them briefly below and will provide more details on these and other budget-related items in future AFSA publications. 

Higher TRICARE Fees

As reported in yesterday’s AFSA Alert, the President budget calls for higher TRICARE co-pays and fees including some new ones.  Annual enrollment premiums will increase for TRICARE Prime users and the new rates will be tied to their military retirement income.  Following a four-year “ramp-up” period, future increases will be tied to a medical inflation index, like the National Health Expenditures (NHE) formula.   Under this plan, TRICARE Prime enrollment fees for some retirees would rise as high as $820 beginning October 1 of this year and climb to as much as $2,048 within five years.

Beginning this fall, TRICARE Standard and Extra users would begin paying a flat rate of $140 for families and be subjected to higher deductibles (Individuals will pay half the family rate).  Enrollment fees and deductibles for families would rise to $250 and $580, respectively within 5 years but these amounts will not be tied to retirement income.  Like TRICARE Prime, future increase in FY 2018 and beyond would be tied to the NHE or another health related inflation index.

The Administration is also proposing to implement an annual enrollment fee for TRICARE for Life coverage ranging from $35 to $115 using the same tiering and indexing as TRICARE Prime.  The new fee applies to each individual in the program and may climb to $475 per year within 5 years for some individuals.    Military retirees on Medicare Part B, beware! 

Pharmacy copays for brand-name medications obtained through retail and mail-order would more than double under the President’s plan—from $12 to $26 beginning October 1.  Copays for non-formulary medications that currently cost $25 would more than double, to $51, and their availability would be mostly restricted to Home Delivery.  Provisions for limited retail access will however be made for medications deemed “medically necessary.”  Copays for brand name and non-formulary medications will increase to $34 and $66, respectively, within 5 years.

Last, but not least, the annual Catastrophic Cap of $3,000 will be indexed to the NHE though it is unclear if this change will occur in FY 2013 or sometime thereafter.  Additionally, annual enrollment fees would no longer apply to the catastrophic cap raising out-of-pocket costs to retirees even higher.

Military Retirement Modernization Commission

The President did not propose any changes to the military retirement system in his budget for FY 2013 but did ask Congress to establish a Commission to review military retirement in the context of overall military compensation.  The Commission would be charged with determining whether there are cost effective changes that should be made to the current system. The President and the Secretary of Defense strongly recommend that any recommended changes be fully grandfathered – that is, they would only apply to new recruits.  The special Military Retirement Modernization Commission would operate under the following procedures which are similar to those that govern actions by a BRAC Commission:

  • The Department would make a formal recommendation to the Commission regarding changes in military retirement;
  • After considering the Department’s recommendation and other inputs, the Commission would make a recommendation to the President;
  • The President could request that the Commission make changes in its recommendations but could not require changes;
  • The President would decide whether to forward the Commission’s recommendation to Congress; and
  • If forwarded, Congress would have to vote up or down on the recommendation without amendment and under expedited procedures.

Base Realignment and Closure

The Administration believes additional money can be saved through additional rounds of base realignments and closures (BRAC).  In his FY 2013 Budget Proposal, the President requested two rounds, one in 2013 and another in 2015.  Of course Congress will have to authorize any new BRAC rounds and when this possibility was announced in January, many key lawmakers called the proposal “dead on arrival.”  This is likely to be one of many issues that stall congressional talks on key defense-related legislation in the coming months.

VA Funding Increased

Unlike most federal agencies, VA is one department that would actually receive a boost in funding if Congress approves their part of President’s FY 2013 Budget Proposal.  That’s good news.  The VA request for FY 2013 is $140.3 billion which includes almost $64 billion in discretionary resources and nearly $16.4 billion in mandatory funding.  The discretionary budget request alone, much of which is used to provide healthcare to veterans, represents an increase of $2.7 billion, or nearly 4.5 percent over the 2012 enacted levels.   The VA plan also provides 64.5 Billion for educational benefits like the Post 9/11 GI Bill—an increase of $1.6 Billion compared to FY 2012—and $1.06 billion for Vocational Rehabilitation which is $50 million higher than current year levels.    As is often the case, special emphasis is being placed on improving the veteran’s claims process, enhancing veterans employment opportunities and ending homelessness for veterans.

“Doc Fix” Update

Early this morning, the committee charged with dealing with the payroll tax cut finalized a deal that extends the payroll tax cut, emergency unemployment benefits and most importantly, the reimbursement rate for doctors that treat TRICARE and Medicare patients.   House and Senate leaders plan to bring the bill the floor for consideration by the full chambers soon, but it is not known when that will actually happen.  Under current House rules, the chamber is technically not supposed to vote on the measure before Saturday.  It is clear however, that Congress is on track to pass this legislation prior to February 29, which is when the current extension expires.   AFSA will continue to monitor the progress of this legislation and report the outcome of their efforts in future editions of On Call.

Congressional Recess

The House and Senate are scheduled to be in recess next week for the Presidents Day holiday and many lawmakers will be working in their State and local offices.  This is the ideal time for members to contact their elected representatives in their home districts and let them know your views and concerns on issues affecting enlisted Air Force members and their families.


National Salute to Veteran Patients Week

As a reminder, this is “National Salute to Veteran Patients” week, a time when everyone should visit their local VA Medical Center, meet America’s Veterans and thank them for the sacrifices they have made.

Mobile Vet Centers Continue to Roll

Mobile Vet Centers were designed to provide mental health and counseling services to Veterans living in rural areas.  Early this year, VA upped its nationwide fleet to 70.    Learn more about Mobile Vet Centers by clicking here.

Veterans Health Benefits Handbooks

Heads up!  VA is sending new Health Benefits Handbooks to Veterans enrolled in VA health care starting this month.  The handbooks are personalized with details on VA health services each Veteran may be eligible to receive.  Be sure to look for yours in the mailbox.


Importance of a Healthy Heart

Heart disease is the number one killer in the United States, causing nearly 25 percent of all deaths in 2008.  February is American Heart month, and it can be a reminder for TRICARE beneficiaries to improve their heart-healthy habits to reduce their risk of developing heart disease.  Read more here.

Prior Authorization

Prior Authorization is the process of reviewing certain medical, surgical and behavioral health services to ensure medical necessity and appropriateness of care prior to services being rendered or within 24 hours of an emergency admission.    Visit your TRICARE regional contractor’s web site or call them for a list of services requiring prior authorization.

TRICARE Frequently Asked Question

“I just started my 180 days of TAMP and need dental care.  Am I eligible to receive care under the Active Duty Dental Program?”  The answer is “No.”   Service members on TAMP are not eligible for the Active Duty Dental Program.   You may only receive care at a military dental treatment facility on a space available basis.


Insurance: Property & Casualty

Protect what’s important to you with affordable insurance from USAA. USAA offers top-rated coverage at low rates.   Combine that with award-winning service — in fact, USAA was ranked one of Business Week’s top two “Customer Service Champs” the last four years in a row.   To make it easy for you, you can do it all online — quote, buy, print ID cards, and much more.   Call USAA at (800) 531-8722 or go online here.

Great Wolf Lodge Discount

AFSA members get ten percent off Great Wolf Lodge’s best available rates! Clear your calendar, pack your swimsuit, and head to any of Great Wolf Lodge’s eleven Resorts.   Just imagine — colossal indoor water parks, exciting arcade, a luxurious spa and fantastic restaurants — all under one roof.   After all, you deserve a little fun for all your hard work!   Visit HERE, or call (800) 905-9653 and use corporate codeAIRF207A.

MOVING?   Let AFSA salute you while updating your address, phone, etc.


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