Editor’s note: Due to the lengthy responses from the testifying parties, the discussion of the MCRMC proposals has been split into two articles: One focusing solely on the TRICARE changes, and this one, focusing on the remaining recommendations. You can also view a breakdown of the original MCRMC proposals from Jan. 29 here.  You can find the complete individual testimonies here.

WASHINGTON — The Military Compensation and Retirement Modernization Commission published their proposals Jan. 29, advising Congress on changes to military compensation and retirement to produce better benefits for service members, retirees and their Families and reduce spending. Since the proposal’s publication, the Senate Armed Services Committee has heard testimony from the Commission members, to better understand the proposals before making any changes.

Today, three military support organizations assembled on Capitol Hill to applaud some recommendations and offer concerns for others, even going as far as urging Congress to take a different path. The Military Officers Association of America, the National Military Family Association and the Fleet Reserve Association all shared testimony and raised questions regarding the effectiveness of some of the proposals. Overall, majority of the 15 Commission proposals were applauded by the organizations, with only a few suggested changes to make the proposals even better.

Here is a list of the supported recommendations:

Recommendation 5: Ensure service members receive the best possible combat casualty care

Both MOAA and FRA support the creation of a Joint Readiness Command to provide inter-service consistency of policy, consolidated budget authority, appropriate determinations for medical staffing, training, procurements efficiencies and more. MOAA said, “the MCRMC proposals should serve as a catalyst for the Department of Defense to quickly push through with structural reforms under the direction of Congress.” The concept could also yield cost savings and efficiencies. FRA also supports the Joint Readiness Command creation, echoing many of MOAA’s statements, but said they are “unsure this can be effectively implemented.”

Recommendation 7: Improve support for service members’ dependents with special needs Family members

The improvements for special needs Family members were applauded by all three organizations, asking that it be applied to all levels of service, including the Coast Guard. The National Military Family Association asked Congress to consider extending the Extended Care Health Option eligibility to Families for one year post-retirement or separation to ensure they have access to care and services for their Family member. NMFA also suggested that the DoD review procedures for accessing ECHO to remove unnecessary requirements and ease the process.

Recommendation 8: Improve collaboration between the Departments of Defense and Veterans Affairs

MOAA and FRA both believe that the collaboration between the DoD and VA must be improved, supporting the MCRMC recommendation. According to MOAA, there is currently a joint DoD/VA health care facility in North Chicago that can serve as an example of success.

One of the cited issues with the current system revolves around transitional formularies, or the approved medications offered by both the DoD and VA — some medications used by the DoD are not covered or used by the VA. A unified system allows service members to continue using a medication that works for them, regardless of the system prescribing the medicines.

FRA believes that a joint electronic health record will help ensure a seamless transition from the DoD to VA for wounded warriors, but is concerned about those veterans who are Medicare-eligible. “Medicare is not authorized to reimburse VA hospitals for care provided to Medicare-eligible veterans. This results in veterans being forced to decide between receiving medical care through the VA, or using Medicare at a non-VA facility and foregoing the personalized care of a VA hospital. The majority of veterans pay into Medicare for most of their lives, yet the law prohibits them from benefitting from this via care at VA facilities later in life,” FRA said. This is a point Congress could consider.

Recommendation 10: Improve access to child care on military installations

The NMFA strongly supports the Commission for recognizing the importance of child care for the readiness of service members and their Families. The current access to child care can be limiting for some military Families, especially with more than 40 percent of service members having children. Unlike in the civilian sector, service members cannot depend on extended family for assistance, their jobs demand long hours and they are often stationed in communities where child care is expensive. Exempting child care providers from hiring freezes and furloughs while also allocating funds to build and renovate existing Child Development Centers can allow the CDCs to accept more children and maintain a high quality of care. More than 70 percent of Families reside off post, making on-post child care a less viable option. The suggested fee assistance program is “invaluable, allowing Families to afford quality child care in their communities. We urge the services to continue funding this program and to expand eligibility so Families are assured of finding quality child care,” NMFA said.

Recommendation 13: Ensure service members receive financial assistance to cover nutritional needs by providing them cost-effective supplemental benefits

The Commission noted that the Supplemental Nutrition Assistance Program, also known as food stamps, is still a need within the military community. Unfortunately, when service members apply for SNAP, the Basic Allowance for Housing is calculated as part of the income, disqualifying some Families. NMFA asked that Congress re-evaluate the SNAP program to see if BAH can be omitted for approval purposes to better meet the needs of low-income military Families in high cost locations.

Recommendation 14: Expand Space-Available travel to more Families of service members

NMFA fully supports this recommendation.

Recommendation 15: Measure how the challenges of military life affect children’s school work by implementing a National MilitaryDependent Student Identifier

NMFA has been rallying for the last several years to institute a National Military Dependent Student Identifier as a means of tracking graduation rates and other milestones for military children as they move from one school to another. In order to get the most accurate data, NMFA would like to see the identifier implemented at the federal level, providing data from all states in the U.S. It allows researchers and policy makers to better understand the impact of military life on academic achievement and enables them to direct resources more effectively to support military children.

While the organizations supported many of the recommendations, not all were well received at today’s hearing. While the changes to the military health care system, TRICARE, received majority of the attention (MilitaryOneClick has published a separate article dealing with health care concerns here), some other concerns revolved around changes to retirement, survivors’ benefits, financial literacy programs, the commissary and exchange programs and education benefits.

Here is a list of the concerns:

Recommendation 1: Help more service members save for retirement earlier in their careers, leverage the retention power of traditional retirement and give the services greater flexibility to retain quality people in demanding career fields.

The National Military Family Association came out strong against the retirement proposals today, saying that the proposals call for service members and their Families to make responsible choices that require robust financial training. “We wonder how the Department of Defense and the services will accomplish this financial training for both the service member and his or her spouse. We will seek more information on how these proposals could be implemented and we encourage Congress to do the same,” they said.

The NMFA supports the recommendation to create an employer match to service member Thrift Savings Plan accounts, which create a valuable retirement benefit for service members, regardless of how long they spend in the military. “At the same time, we strongly believe in the value of the defined benefits plan, both as a retention tool and as a vital element in retirees’ financial well-being,” NMFA said.

While the proposal may look good with a cursory glance, some problems arise when considering how service members will contribute to their own plans. The proposal shifts risk and responsibility for retirement savings from the government to the individual service member. The value of TSP is tied directly to the level of contributions. If the service member chooses not to participate or wants to make smaller contributions, the value of the benefit is diminished. When forced to make the choice between saving for retirement and making ends meet, some service members may believe they can’t afford to save for retirement.

The TSP change could also lead to a significant income reduction for future working-age retirees compared to the current plan. TSP would represent a significant share of retirement savings for a person who spends 20 or more years in the military, so the proposal imposes greater risk on those who stay for a full career. “If there is a downturn in the market, retirees face losing a large share of their retirement savings,” the NMFA said.

Recommendation 2: Provide more options for service members to protect their pay for survivors

The Survivor Benefit Plan allows retired service members to elect providing 55 percent of the service member’s retired pay as a lasting financial support to an eligible survivor. The service member pays 6.5 percent of his retired pay as a premium, but automatic coverage is extended to survivors of service members who die on duty. Another aspect provided for widows/widowers is the Dependency and Indemnity Compensation, which is paid for by the VA. Survivors who are eligible for both SBP and DIC must forfeit a dollar of their SBP annuity for every dollar of DIC received from the VA. Often, the offset wipes out the SBP annuity the military retiree paid for. In such cases, the survivor receives a proportional refund of SBP premiums – with no interest on what may have been many years of premium payments. The Commission’s suggestion allows service members the option to eliminate the offset by paying a higher premium.

The NMFA does not support the Commission’s plans for SBP because it does nothing to eliminate the SBP-DIC offset for today’s survivors and imposes additional costs on some of the most vulnerable military Families. “This proposal would leave 60,000 surviving widows and widowers who currently absorb the offset in the same situation they are now — continuing to have their SBP annuity offset by their DIC payment. We cannot support asking the retiree to fund both the unsubsidized portion of the SBP and the VA provided DIC payment on the chance he or she may die of a service-connected disability,” the NMFA said.

Recommendation 3: Promote service members’ financial literacy by implementing a more robust financial and health benefit-training program

All three organizations support financial and health benefit training for service members and their spouses in association with TSP and new health care proposals, though some doubt whether or not the education will be beneficial in the end.

MOAA believes that while Families have an overwhelming choice in retirement and health care, “it may be just that — overwhelming and confusing, especially in the face of the existing stressors military Families face. Educating beneficiaries on their TRICARE benefits has been a challenge since the program’s inception.”

Recommendation 9: Protect both access to and savings at Department of Defense commissaries and exchanges by consolidating these activities into a single defense resale organization

Most military Families understand that the commissary and exchange system frequently offer cost savings while benefitting the Directorate of Family Morale, Welfare and Recreation, but with the new proposals, NMFA is concerned that the benefits will no longer exist for either option.

“We have concerns about the proposal to merge the commissary and exchange operations and worry about the effect this change would have on the military resale system. The implementation of the Commission’s recommendation may remove many protections that sustain the existence of the commissary and exchanges,” the NMFA said.

Such concerns include forcing the surcharges and profit margins to fully fund the operating costs of both systems and potentially losing the estimated 30 percent savings commissaries offer.  Other concerns revolve around commissary employees who may be reclassified as Non-Appropriated Funds workers, taking pay cuts and changing their benefits under a new system.

NMFA noted that the Defense Department currently operates three exchange systems and has previously attempted to consolidate them into a single entity, failing due to logistical challenges and service objections. “How and why will it work this time?” NMFA asked.

Recommendation 11: Safeguard education benefits for service members by reducing redundancy and ensuring the fiscal sustainability of education programs

The NMFA does not support this recommendation because they believe that Congress should preserve the full Post 9-11 GI Bill. “These service members honored their part of the contract. Now we ask Congress to do the same and preserve the full Post 9-11 GI Bill for those military Families who have already transferred the benefit,” the NMFA said.