In what he described as the most sensitive of the potential cuts facing an all-volunteer force, Mr. Panetta said the Pentagon was considering raising fees for the military’s health insurance program, Tricare. Today, military retirees and families, who are guaranteed Tricare for life, pay only $460 a year in fees — far below what they would pay if they worked for a private employer — although a modest increase for new enrollees began last month.
The White House and Pentagon have made clear that Tricare fee increases would be phased in over a few years and would affect current retirees and troops serving today when they retire. Health care costs for the Pentagon, the nation’s largest employer, total $50 billion a year, or about a tenth of its base budget. Ten years ago, health care cost the Pentagon $19 billion, equal to about $25 billion in today’s dollars.
Mr. Panetta provided no details of potential reductions in military retirement pay for those who enlist in the future, but said he would consider supporting the creation of a binding commission to review such pay. He also indicated that he might support a change that would increase retirement spending, by offering some retirement pay to those who had served less than 20 years. Currently only those who have served at least 20 years receive retirement pay, which is 50 percent of their final annual base pay, for life.
“Are there ways, looking at the retirement piece, where those who serve 10 or 12 years might be able to take that retirement with them?” Mr. Panetta said.