Saturday, December 22, 2012

Washington Perspective

On Tuesday, December 18th, Members of the House and the Senate released conference language aligning their respective versions of the FY 2013 Defense Authorization Act (NDAA). AFA will provide comprehensive analysis of the legislation after it is signed into law by the President. In the mean time, we wanted to let you know about two specific items of particular interest--the Retirement Commission and TRICARE fees. Below are some of the highlights:


The NDAA establishes the Military Compensation and Retirement Modernization Commission to review compensation and retirement benefits. The commission is charged with ensuring the long-term viability of the All-Volunteer Force, enabling a high quality of life for military families, and to modernizing the compensation and retirement systems in a sustainable fashion. The legislation calls for grandfathering current service members and retirees.

The Commission will have nine members—the President appoints one member; the Majority Leader of Senate, in consultation with the SASC Chair, appoints two members; the Minority Leader of Senate, in consultation with the Ranking Member of SASC, appoints two; the Speaker of the House, in consultation with the Chair of HASC, appoints two; and the Minority Leader of the House, in consultation with the Ranking member of HASC, appoints two. This process is supposed to occur within 4 months and the eventual reconditions will be submitted to the President within 15 months. 

 Commission members are expected to possess knowledge regarding federal civilian, military and private sector compensation; military family policy development; and implementation and actuarial science. The Secretary of Defense will also make recommendations to Congress in consultations with the Secretaries of Homeland Security, HHS and OMB.

The commission will have a budget of $10,000,000.


The FY13 NDAA restates the firmly held sense of Congress that access to quality health care services during retirement is a benefit earned though prior service to our nation. Thus, the FY13 NDAA rejects the Administration’s proposals to increase existing fees and create new charges. Instead, the FY13 NDAA includes a modest increase in TRICARE pharmacy co-pays in 2013 and a cap on pharmacy co-pays beginning in 2014 that would allow fees to rise by no more than the annual retiree COLA. This funding adjustment is offset by a 5-year pilot program, which requires TRICARE for life recipients to obtain refills of maintenance drugs through the TRICARE mail-order program.

To read the full conference report:

Summary from SASC Chairman Carl Levin's office:

Summary from HASC Chairman Buck McKeon:

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