U.S. officials say an independent commission is recommending broad changes to the military's retirement and health care systems that could save more than $20 billion over the next four years.
But the proposals, which would allow some of the programs to operate more like existing federal employee systems, are likely to face an uphill battle from members of Congress who vigorously protect military benefits and have so far resisted change.
According to officials familiar with the report, the panel is recommending that the military's TRICARE health care system largely be replaced, giving families the ability to choose from a wider menu of insurance plans, similar to those used by federal employees.
The Military Compensation and Retirement Modernization Commission plans to unveil its report today. Officials described the recommendations on condition of anonymity because they were not authorized to discuss them publicly before the report's release. Recognizing how difficult it is to make changes to the entrenched systems, in many cases the panel grandfathers in current service members, allowing them to keep existing programs.
Under the proposed changes, service members would still get free health care and would go through military treatment facilities. Military family members and retirees would be able to choose from a variety of insurance plans and would receive an allowance to offset any premiums or co-payments required.
Advocates for change have long argued that military families often have limited health care choices, particularly in more remote locations. And they say families could benefit from more choices as they seek out physicians and services.
Recommended changes to the retirement benefits would also mirror what has gone on in the federal government and private industry. Military members could continue to get their defined pension benefit, but they would also be allowed to enroll in a thrift savings plan, like a 401(k), that would include some matching contributions from the government.
Officials said the change would allow troops to receive a least some retirement pay even if they don't stay on for 20 years, the minimum length of service required to receive a pension.
While the retirement and health care proposals are just two of 15 major recommendations by the panel, they are sure to receive the most debate. Pentagon leaders have complained for years that the cost of military benefits has been growing exponentially and taking a larger bite out of the budget. The growth, they have said repeatedly, is not sustainable and changes will have to be made.
Members of Congress, however, have been reluctant to do anything that appears to cut benefits or create new costs for troops, particularly as they have been fighting and dying in two long wars. Just last year, lawmakers opposed Pentagon proposals to trim military housing benefits and commissary subsidies and efforts to impose slight increases in out-of-pocket costs for TRICARE.
But as budget woes grow, some lawmakers may be more open to limited changes.
On Wednesday, Sen. Lindsey Graham, R-S.C., told military leaders during a hearing of the Senate Armed Services Committee that "we need to look at reforming pay and benefits, be generous but sustainable."
The three service chiefs agreed.
"If we don't, regardless of sequestration, we would have to take significant cuts in our capacity," Gen. Raymond Odierno, chief of staff of the Army, told Graham.
Other panel recommendations touch on a number of benefits, ranging from child care and commissaries to education programs.
The panel recommends merging the office and some management activities for base commissaries and exchanges that could bring some property savings over time. And it also recommends giving military leaders the authority to use funding to add child care facilities and staff where needed.
The bulk of the cost savings over the next four years would come from the TRICARE changes, officials said.