The last decision made by House-Senate conferees negotiating final details on a fiscal 2010 defense authorization bill Tuesday was to insert language that will rollback an announced Oct. 1 increase in fees charged to TRICARE Standard beneficiaries for stays in civilian hospitals.

The surprise fee increases, which were reported here last week, gave lawmakers a chance to ride to the rescue and, in effect, put a cherry atop the $680.2 billion defense policy bill, at least for working-age military retirees and their families who would have seen a $110-a-day bump in hospital bills.

That was a fortuitous opportunity for the armed services committees because other pay and benefit initiatives in the bill are relatively modest compared to past years. And the gains are dampened by some too-familiar legislative disappointments for service members, veterans and their families.

One new disappointment is that the Democratically-led Congress couldn't find money to support President Obama's call to phase in "concurrent receipt" for disabled retirees who are forced by ailments or injuries to leave service before completing 20 years' service.

His plan would have boosted the pay of 103,000 "Chapter 61" retirees at a cost of $5.4 billion over 10 years. The House alone had voted to take the first step, using dollars freed up from an energy appropriation, to expand the Concurrent Receipt and Disability Pay (CRDP) program Jan. 1, to retirees with fewer than 20 years and disability ratings of 100 percent or 90 percent.

But Senate conferees concluded it would violate Senate budget rules to take even a first-step in Obama's phase-in plan without proper funding.

The principle behind concurrent receipt is that the Department of Defense should pay retirees an annuity for total years served and VA should fully compensate them for their disabilities. For many thousands of disabled retirees, retired pay still is reduced or "offset" by disability compensation.

Obama promised in his presidential campaign to extend concurrent receipt to all disabled military retirees. But White House budget officials were stunned to learn the cost -- $45 billion over 10 years -- and so lowered their first-term target to all Chapter 61 retirees, clearly an unpopular compromise.

House-Senate Conferees also rejected two familiar Senate-passed initiatives as unfunded. One would have ended a reduction in Survivor Benefit Plan (SBP) payments to 54,000 widows who also draw Dependency and Indemnity Compensation (DIC) from the Department of Veterans Affairs.

The other provision tossed would have made 140,000 more reservists mobilized since Sept. 11, 2001, eligible for earlier reserve retirement. In 2007, Congress had lowered the age 60 start of reserve retired pay by three months for every 90 consecutive days that a Reserve or Guard members is called up for war or national emergency, if they otherwise qualify for retirement. For lack of funds, Congress made the change applicable only for deployment time after Jan. 28, 2008. That restriction will remain will remain.

Conferees did clear for final passage dozens of other initiatives: to raise or extend special pay and bonuses; to improve support for wounded warriors, reserve component personnel and their families; to protect and improve the military health program and to strengthen voting rights for service members. Here are some highlights:

Gray-area Reserve TRICARE -- Reserve and Guard "gray-area" retirees -- those who have not yet reached age 60 to qualify for full retiree benefits -- will be able to buy into TRICARE Standard coverage, at full premium cost, for themselves and their families. Given that this is an older population, premiums are expected to be higher than those set for TRICARE Reserve Select which, for 2009, is $47.51 a month for member -- only coverage and $180.17 for family coverage. The effective date in the bill is Oct. 1, 2009, but for practical purposes, it could take Defense officials many months to write regulations and set rates for the gray-area program.

Reserved retired pay adjustments -- Reserve retirees recalled to active status in the Selected Reserve for at least two years will be able to have their retired pay recomputed and their retired grade readjusted. Service members who qualify for a regular retirement will be able to receive reserve retirement when they have served in an active status in the Selected Reserve for at least two years.

Compensating wounded warrior caregivers -- For the assistance they provide service members with catastrophic injuries or ailments, who otherwise would require hospitalization or institutional care, designated caregivers, including family members, can be paid up to $2983 a month, the current limit on VA aid and attendance payments.

Freeze TRICARE standard inpatient fees -- Obama administration officials, including Defense Secretary Robert Gates, were taken by surprise when the TRICARE Management Activity announced Sept. 1 that inpatient fees under TRICARE Standard were to be raised this month including a $110-a-day pop for retirees under 62, their family member and survivors. Gates had promised to leave fees alone this year.

TRICARE officials said they were bound by regulation and law to reset the inpatient fees to cover 25 percent of allowable costs, effective Oct. 1, the date that a freeze Congress had imposed three years ago expired. Conferees voted to keep the old fees frozen through next September.

Pro-rated war zone pays -- This move won't be popular. To curb abuses in payment of hostile fire pay, imminent danger pay and associated tax breaks, the services will begin to pro-rate these pays, as well as hazardous duty pay, assignment pay and skill incentive pay, based on actual days of qualifying service each month. Currently, full monthly payments are made if members crewing aircraft or visiting from headquarters spend as little as a day a month in a war zone or danger area.

Lawmakers heard allegations of people manipulating the system, even arranging schedules, for personal benefit, explained one Capitol Hill source.

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(Oct. 10, 2009)