Before you get too upset about the Defense Department changes to your coverage in 2015 it is important to remember that these are proposed changes. The final details of the budget have yet to be decided. What is planned are cuts to the amount you get for your BAH (Basic Allowance for Housing), how Tricare coverage is provided and what is paid for, as well as changes to other quality of life items.
Here is an overview of the 4 biggest proposed changes in the 2015 budget.
1. Tricare changes
The Tricare changes proposed for 2015 are the ones that have most people concerned. The core of the change is a planned transition from a three tiered coverage program to a more universal coverage for all. This comes with a series of cost increases, but these are incremental and not planned to be complete until 2024.
- The Extra option offered to active duty personnel and their families enrolled in DEERS will be eliminated.
- All persons must choose between Prime and Standard. By 2016, payments will be increased (except for active duty families and retirees who use military centers).
- Generic drugs will rise in cost until they reach a $14 cap by 2024 if filled off base.
- Brand name prescriptions will immediately rise in cost to $26 in 2015. They will increase each year until they reach their cap of $45 in 2024 if filled off base.
- Retirees who aren’t using prime will have to start paying a yearly enrollment fee of $286 individual and $569 for families.
- Retirees will also be paying $10 for primary care visit at military centers and $20 for outside network providers.
2. BAH rates decline
The housing allowance has a rate protection plan encoded in the new budget so there won’t be any dramatic change to what you are currently receiving, however new rates will be lower as you move into different areas. The budget plan calls for military families to pay a new level of 6% of their housing costs as an out of pocket expense. Additional plans to then reduce the overall rates are loosely defined as “planned for, but with no timeline.” This may not have too direct an impact on most families at first, however if you are renting to military families, the rent they will be able to pay may be immediately reduced; effecting your ability to meet your costs.
3.Changes to the Commissary
By 2017, the new budget for the DoD outlines a $1 billion reduction in funding for the commissary system. This will mean that your average savings of 32 percent on consumer goods will drop to about 10 percent, bringing prices more in line with civilian discount big box stores. If enough people opt to shop off base after the price discount changes, there is a trigger in the new budget plan that will allow the base to close the commissary completely.
There has been some discussion about allowing the commissary system to offer previously prohibited items for sale, but that change requires an act of Congress so it won’t be anytime soon.
4. Education and non-medical support
While many military families were excited about the proposed changes to the DoDEA systems and new schools, both of those didn’t make it to the final budget cut. Expect business as usual at the DoDEA and remodeling of existing school buildings. Support for military families didn’t get cut too badly, but there is a marked reduction in the coverage for non-medical counseling and therapies.
5. Stable pay raise percent
Depending on which branch you are in, the pay raise percent is set to remain at the same 1% rate that the military received in 2014. That won’t help you keep up with inflation, or the transition to more civilian costs. The 1% pay raise is also lower than the traditional 1.8% that was most common in the years before. This won’t change anytime soon so it pays to invest some time in financial planning so the raise is put to good use. If you are in the Navy, you will see a unheard of 25% pay rise in 2015 for sea pay only. This is long overdue but will most likely not happen again. The dramatic pay rise brings sea pay on par with the rest of the military duty pay, but then expect it to fall in step with the 1% rule.
How much of these cuts will make it past an election year?
While 2015 stands to be the year of transition for the military and military families, nothing is really written in stone as to what cuts will make it to their deadline for implantation. Both sides of the political tree have shown that they are not quite aware of the realities of military life, and as the Department of Defense looks for ways to reduce the size of the forces, while still meeting military obligations – a lot can still change. The budget cuts outlined above stand the best chance of being implanted, so start to make plans now to take on more via civilian routes.
One of the greatest initiatives currently underway is to create a better program to help military families transition into civilian culture. The current discharge and acclimation process leaves a lot to be desired. Since the budget cuts mean more military families will live with one foot in both worlds, new plans for transition planning are coming online this year and the next to help.