Thornberry: Defense Bill Conferees Kept People A Priority
House-Senate conferees negotiating the final FY 2018 National 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 dual-service couples. 

Rep. Mac Thornberry (R-Texas), chair of the House Armed Services Committee and leader of House Republican conferees, said all conferees had “the welfare of servicemembers 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 the 2.1-percent raise backed by senators, which would have saved $1.5 billion through 2022.

They also rejected the call of senators to cut housing allowances for dual-service couples with children. Under the Senate plan, one servicemember 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,” Thornberry said. “The question is: How do you back out of that?”

One reason conferees refused to cut BAH for dual-service couples was because “the overwhelming majority are enlisted folks,” Thornberry said.

Higher pharmacy copayments. Conferees accepted the Senate's embrace of a DoD plan to increase pharmacy fees and encourage greater use of generic drugs, on-base pharmacies, and mail orders. In the year ahead, copayments 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. Copayments 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 copayment for mail-order generic drugs, rising to $14 by 2026.

Senators added that generic copayments on mail orders, which aren't in the DoD drug plan, should be able to partially offset shipping and administrative costs and be consistent with cost shares charged for generics at TRICARE retail outlets.

Survivors of servicemembers who die on active duty and members retired for disability would be exempt from drug copayment increases.

Thornberry said House conferees were reluctant to accept the copayment increases but understood the Senate argument that accepting the pharmacy fee plan would free up “mandatory” budget dollars (versus “discretionary” defense spending) to go toward fixing other issues for surviving military spouses.

Special Survivor Indemnity Allowance (SSIA). With higher drug copayments, DoD has lowered mandatory spending on medicine by $2.1 billion through 2022. Conferees agreed this means enough money has been freed up to make permanent and begin adjusting for inflation the $310-a-month SSIA that otherwise is due to expire next May. 

Congress first approved SSIA in 2008 to mitigate a cut in Survivor Benefit Plan (SBP) payments that occurs when surviving spouses also are eligible for Dependency and Indemnity Compensation (DIC) from the VA. Tax-exempt DIC is payable if a servicemember died in the line of duty or died in retirement due to service-related injury or disease.

Congress won't eliminate the SBP/DIC offset entirely, arguing that doing so is unaffordable. But House-Senate conferees accepted the Senate plan to make the SSIA permanent and to adjust it annually using the same COLA or the COLA used to protect the value of military retired pay.

“It was a pretty significant concession by the House to go to the TRICARE pharmacy copays in order to pay for the widow's [allowance],” said Thornberry. “I think the way it came out was the right thing to do, but there was back and forth and concessions on both sides.”

Grandfathering TRICARE fees. One of the most confusing results of negotiations to shape the final 2018 National Defense Authorization bill is the decision to sustain language from last year's defense bill that “protects” working-age retirees from TRICARE fee changes to take effect in 2018 for new service entrants.

Congress approved a host of TRICARE reforms last year but grandfathered all currently serving members and all retirees under the age of 65 from what appeared be significant fee increases. Defense officials complained this would force DoD to administer two sets of fees for the next 50 years to shield current servicemembers and retirees from higher out-of-pocket medical costs.

In their FY 2018 budget request, DoD officials urged Congress to repeal the grandfather language and let every generation of non-disabled retirees under the age of 65 face the same TRICARE fees, copayments, and deductibles. The Congressional Budget Office weighed in, estimating removal of the grandfather protection would save the department almost $4 billion over the next five years.

In late September, however, the Defense Health Agency (DHA) published near-final regulations to implement TRICARE reforms. They included a surprise new method of calculating current fees for active duty families and retirees under 65 and their families for care outside military treatment facilities.

Defense officials argued the new “fixed dollar” fees for the newly renamed TRICARE “Select” option, which will replace TRICARE Standard and Extra Jan. 1, merely will reflect average fees current servicemembers and retirees already pay. But the new fixed-dollar fees have turned out to be higher than some TRICARE “reform” fees planned for new entrants in 2018 and beyond.

The Military Coalition, a consortium of associations advocating for military families and retirees, protested to Congress last week that DHA's methodology is flawed. The planned fixed-dollar fees, they argued, will exceed rather than mirror the average fees paid by current TRICARE participants as DHA contends.

The uncertainty made it easy for House and Senate conferees to accept the House plan and preserve the grandfather provision for working age retirees. But in doing so, given the fixed-dollar fee schedule now set for TRICARE Select, DoD actually will be saving total health care dollars by keeping current retirees away from fee changes for new entrants who eventually will qualify for retirement.

Thornberry said his committee had set out to protect retirees from higher fees by adhering to the notion not to retroactively “change [the] rules of the game or promises you made. … That was the position the conference was able to adopt.”

Thornberry acknowledged, “It actually is a little more complicated than that. Because if you took away the grandfathering there would be some people in some instances that would benefit with lower costs.”

Thornberry promised to watch how TRICARE fees evolve for separate generations. But for now, he said, he wants current servicemembers grandfathered “unless there is just an overwhelming case that servicemembers and retirees would be better off if we took that grandfathering out.”  

 

Using Your TSP as Your “Base Camp” for Retirement Funds

After you leave the Service, your Thrift Savings Plan (TSP) does not have to collect cobwebs due to non-use.  

TSPs only accept contributions from government paychecks. Retirement pay does not qualify for TSP contributions. However, you can transfer existing retirement assets outside the TSP back into the TSP after you leave the Service. Transfers are not the same as contributions. Why would you consider this plan of action?

The TSP is the least expensive investment account you will ever own. The average cost of the TSP is 29 cents per $1000 invested. It is practically free. An inexpensive investment account outside the TSP would compare at $1.90 to $7.50 per $1000 invested. Typical rates in the financial industry can run from $10.30 to $25 per $1000. If you invest through an insurance product (variable annuity or variable universal life for example) you could be paying $30 dollars or more per $1000.  

Let’s talk cost factor as money in your pocket.  

• $10,000 in the TSP upon separation earning an average annual return of 7% over 30 years would grow to $70,000.  
• Same $10k with a standard adviser fee of 1% of assets under management at 7% for 30 years is $56,500. Keep in mind that if you are paying 1% of assets under management, you are probably paying annual fees internal to your mutual funds, ETFs, insurance products, etc., in additionto your 1% fee.  
• $10k with a 1.5% fee at 7% for 30 years; $48,700. This is an average managed mutual fund fee.   
• Finally, $10k with a 3% annual fee (ex: insurance product) at 7% for 30 years; $31,300.  

Cost matters but so does simplicity. After the Service, you may change jobs several times. In each job, you will contribute to a 401k. Over time you can collect 401ks if you don’t have a plan to consolidate your retirement assets. I present the TSP as your “base camp.”  

The traditional TSP will accept transferred retirement assets from traditional IRAs and traditional employer retirement plans.  

The Roth TSP will accept transfers from Roth employer retirement accounts but will not accept Roth IRA transfers (yet).  

You must have an existing traditional TSP to transfer money into the account. The Roth transfers on the other hand do not require an existing Roth TSP as the transfer will open a Roth TSP as part of your existing traditional TSP.  

If you do this, read up on using your portfolio allocation to properly manage your assets to achieve a growing or stable account value. Allocation articles are on the MOAA financial blog. Also review TSP.gov for transfer details.  

Female veterans at greater risk for mental illness, heart disease, and cancers than civilian women
Women who've served in the military are more likely to suffer from suicidal thoughts, cardiovascular disease, arthritis, and other problems according to a new study looking at the health of female veterans. 

Female vets report higher rates of cancer, mental illness, chronic obstructive pulmonary disease, and depression when compared to women with no military experience, the Health of Women Who Have Served Report found. MOAA teamed with United Health Foundation to produce the report.

More than 8 percent of the female veterans surveyed over a four-year period reported having suicidal thoughts in the past year - nearly twice that of their civilian counterparts. About a third reported arthritis, compared to about 26 percent of civilian women. Other findings include: 

• About 13 percent of women who served had cancer, compared with roughly 11 percent of women who did not.
• Nearly 42 percent reported getting insufficient sleep, compared to 34 percent of civilian women.
• About a third of female veterans reported mental illness in the last year, compared to about 22 percent of women who didn't serve. 

Members of Congress, VA officials, and other leaders met in Washington Thursday to discuss the study's findings.

“The focus of the study released today is so incredibly important and so needed,” said Sen. Tammy Duckworth (D-Ill.), a retired Army officer who lost her legs in Iraq. “That data is missing in the health care and scientific world in terms of the research and analysis of female vets. People talk about it, but actual reports like this one are so rare.”

There are about 2 million female veterans and another 200,000 women on active duty, according to the report. Since 2000, there's been a 30 percent increase in the number of women who've joined the military, said Rep. Julia Brownley (D-Calif.), who serves on the House Committee on Veterans Affairs. 

“While we have made improvements, the VA remains ill-prepared to deal with growing number of women veterans whose mental and physical health care needs can be different from their male peers and from civilian women,” Brownley said. 

The data on female veterans from the MOAA-United Health Foundation study, Brownley added, will help congressional veterans committees set new policy that benefits them.   

Dr. Patricia Hayes, the VA's chief consultant for women veterans' health, said the study's findings were consistent with what she sees in her female patients. Despite facing some higher rates of health problems, female veterans show tremendous resilience. 

That's likely why 56.4 percent of female vets reported being in very good or excellent health compared to civilian women, according to the study. 

“There's an attitude of 'I'm feeling pretty OK and healthy and functional,' even in light of the trends and similar data showing higher [rates of certain health problems],” Hayes said. 

Starting a dialogue 

Now that there's data on some of the physical and behavioral health problems facing female veterans, it's important to research what might be causing them, said Capt. Kathy Beasley, USN (Ret), director of MOAA's government relations health affairs.

“We can't develop solutions until we know the root of some of the problems,” Beasley said. “We've got some cardiovascular, musculoskeletal, and behavioral health concerns - significant disparities between women who served and their civilian counterparts. Why is that? What are the factors that are contributing to those outcomes?”

The study on female veterans provides an opportunity for more research, policy changes, or better access to VA or community health care that will benefit female veterans, said MOAA President and CEO Lt. Gen. Dana T. Atkins, USAF (Ret).

It's important for health care providers to start asking more women if they've served in the military, Hayes added, especially if they're seeing doctors outside the VA in their communities. If female veterans are at higher risk for some cancers, heart disease, or depression, doctors need to ask them the right questions and test them for some conditions earlier than they test women who didn't serve. 

That applies to male veterans, too, Hayes said. If doctors know someone served in the military, it will help them better understand their health challenges. That's one reason it benefits veterans to go to the VA for at least some of their health care, said Deputy Secretary of the VA Thomas Bowman, a retired Marine Corps officer. 

Bowman said he's dedicated to ensuring VA health facilities are providing good care to women. His sister served in the Air Force, he said, and she's been candid with him about some of the VA's shortcomings when it comes to treating women. 

“We want to make sure that women vets will choose VA for their health care,” Bowman said. “We've made significant strides, but we can't give up on that, and we're not going to.

“I think this study helps focus VA and some of its activities,” Bowman said.

Be Smart About Charitable Giving
In 2015, Americans donated $373.25 billion to charity, a more than 4-percent increase from 2014, according to the National Philanthropic Trust.

Nonprofit organizations noted they received about half of these individual donations at the end of the year, either because of the holiday spirit of giving or a desire to give before the Internal Revenue Service (IRS) deadline. Whatever your reason for giving, how and to whom you give can make your philanthropic gift - no matter the size - more meaningful. 

The 2012 Nonprofit Almanac estimates there are more than 2.3 million charities in the U.S. This number includes 40,000 registered military and veteran nonprofit organizations that support servicemembers, veterans, and military families and tens of thousands more nonprofit organizations that in some manner touch servicemembers, veterans, and military families. 

With so many charities, choosing the right one can seem daunting.   

Making a meaningful donation

Select a cause that is meaningful to you and one about which you are passionate. What injustice would you correct? What changed your life? From feeding hunger or curing cancer to preserving the environment or supporting an institution that positively affected you or your family members' lives, it's a personal choice and one for which there is no single right answer. 

When you pick a cause in-line with your values and beliefs, you have identified your philanthropy. By doing so, you will feel less inclined to support impulsive solicitations that play on your compassion. In some cases, these solicitations do more to line the pockets of the solicitors than actually help anyone in need, but it can be hard to determine effectiveness when faced with an immediate request. It's best to research a charity before making a donation.  

 

Narrowing down the choices

Once you have selected a cause, you typically will find many charities support that cause. How do you make sure your donation is going to a legitimate and effective organization that benefits the cause that is important to you?

Gone are the days when you could rate a charity's effectiveness solely based on which one has the lowest overhead expenses, which exposes only the poorest-managed charities. Donors' reliance on only this indicator discourages nonprofit charities from reinvesting into their own development - which, like successful for-profit organizations, they need to do. This lack of reinvestment can keep charities from achieving their long-term goals, which are important to you as a donor. 

Instead of using a one-dimensional test, independent charity evaluators review charities for accounting transparency and discrepancies, defined goals, efficiency, and whether they are registered as tax-exempt with the IRS. (Read “Your Guide to Charity Evaluation Tools.”) Some charity reviews even are beginning to measure effectiveness by looking at how close a charity has come to no longer being needed; a successful charity sometimes is one that works toward its own obsolescence. Independent charity evaluators also can help determine whether an organization is fraudulent or attempting to solicit donations by using a name similar to well-known organizations. 

Even if a charity has checked out, avoid the temptation to spread your donations across too many charities. According to Charity Navigator, one of the largest charity evaluators, focusing your contributions allows more of your money to go directly toward helping your cause rather than toward processing expenses.   

Helping veterans

Are you still wondering which cause should be the focus of your charitable giving? Consider that in the years since Sept. 11, 2001, the U.S. Census Bureau shows 6 million Americans have served in the military, more than 2.5 million veterans have deployed to Afghanistan and Iraq, and more than 2 million still are serving in either the active or reserve forces. According to the Government Accountability Office, 1 million servicemembers will transition to the civilian sector in the next five years. 

The Philanthropy Roundtable and the DoD Recovering Warrior Task Force have identified private and public charities whose efforts are making significant improvements in the lives of veterans and their families. These efforts often complement or provide assistance in health care, education, employment, and quality-of-life issues for which government support is limited or unavailable. These charitable efforts help veterans make successful and rapid transitions after military service while avoiding common problems. For example:

• Younger post-9/11 veterans are experiencing significantly higher unemployment rates than nonveterans of the same age.

• Getting into a higher education program is only half the issue; once there, veterans must figure out how to graduate. Veterans and military family members sometimes need mentoring and counseling to adapt to the new climate. 

• Pro bono legal and financial advice can put veterans on the right path and prevent potential problems down the road. 

• Many veterans need assistance navigating the red tape involved with obtaining physical and mental health care or direct care services that offer greater privacy and access. There's also a need to support caregivers of wounded warriors.

• Family members need support extended to them in the areas of education, employment, or quality-of-life improvements to alleviate the burdens of multiple separations, deployments, and moves.

• Injured veterans need housing and adaptive improvements while recovering. Temporary housing for families near hospitals is beneficial when veterans need specialized care. 

Many veterans need our support, and the desire to help them and their families in need reflects a fitting gratitude for their service to country.