THORNBERRY: DEFENSE BILL CONFEREES KEPT PEOPLE A PRIORITY
With military operations staying high, and service member deaths by accident alarming, House-Senate conferees negotiating a final fiscal 2018 defense authorization bill rejected most Senate-passed provisions to slow compensation growth including a modest cap on the January pay raise and cuts to housing allowances for most members married to other service members.
Rep. Mac Thornberry (R-Texas), chairman of the House Armed Services Committee and leader of House Republican conferees, said all conferees had “the welfare of service members foremost in our minds. Some of that is pay and benefits but also, [considering] recent naval accidents and air accidents, it’s making sure they have equipment that works.”
Conferees, therefore, opted to accept the House-passed plan for a 2.4 percent military pay raise, matching recent private sector pay growth, rather than 2.1 percent backed by senators, which would have saved $1.5 billion through 2022.
They also rejected senators’ call to cut housing allowances for dual service couples with children. Under the Senate plan, one member no longer would have been eligible for Basic Allowance for Housing at the higher “with dependents” rate.
“We have had these discussions before with the Senate,” Thornberry said in a phone interview late Wednesday. “Their concern is that a housing allowance designed to pay housing cost is no longer seen that way,” but includes “extra pay.”
“And that’s right,” he said. “The question is: How do you back out of that?”
One reason conferees refused to cut BAH for dual-service couples was “the overwhelming majority are enlisted folks,” Thornberry said.
HIGHER PHARMACY CO-PAYS -- Conferees did accept the Senate’s embrace of a Defense Department plan to raise pharmacy fees and encourage greater use of generic drugs, on-base pharmacies and mail order. In the year ahead, co-pays for a 30-day supply of brand drugs at retail, or a 90-day supply by mail order, will be raised to $28 and will climb to $45 by 2026. Co-pays for generic drugs at retail will be raised to $10 in 2018 and to $14 by 2026. To encourage greater use of base pharmacies, where drugs will remain free of charge, the plan will add a $10 co-pay for mail order generic drugs, rising to $14 by 2026.
Senators added that generic co-pay on mail order, which isn’t in the DoD drug plan, to be able to partially offset shipping and administrative costs, and to be consistent with cost shares charged for generics at TRICARE retail outlets.
Survivors of members who die on active duty and members retired for disability would be exempt from the drug co-pay increases.
Thornberry said House conferees were reluctant to accept the co-pay increases but understood the Senate argument that, by the accepting the pharmacy fee plan, it would free up “mandatory” budget dollars, versus “discretionary” defense spending, to be able to fix another issue for surviving military spouses.
SPECIAL SURVIVOR INDEMNITY ALLOWANCE -- With higher drug co-pays, the Defense Department lower mandatory spending on medicines by $2.1 billion through 2022. That’s enough money freed up, conferees agreed, to make permanent and begin adjusting for inflation the $310-a-month Special Survivor Indemnity Allowance (SSIA) that otherwise is due to expire next May.
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