To restore health care coverage to retired members of the uniformed services, and for other purposes.

February 2, 2005

Mr. VAN HOLLEN (for himself, Mr. EDWARDS, Mr. MILLER of Florida, and Mr. CUNNINGHAM) introduced the following bill; which was referred to the Committee on Armed Services, and in addition to the Committees on Government Reform, Ways and Means, and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To restore health care coverage to retired members of the uniformed services, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Keep Our Promise to America's Military Retirees Act'.

SEC. 2. FINDINGS.

Congress finds the following:

(1) No statutory health care program existed for members of the uniformed services who entered service prior to December 7, 1956, and retired after serving a minimum of 20 years.

(2) Recruiters, re-enlistment counselors, and officers at all levels of the uniformed services, and other government officials, as agents of the United States Government, used recruiting tactics that allowed members who entered the uniformed services prior to December 7, 1956, to believe they would be entitled to fully paid lifetime health care upon retirement.

(3) In the United States Court of Appeals for the Federal Circuit decision of November 18, 2002, in Schism v. United States (No. 99-1402), the Court said: `Accordingly, we must affirm the district court's judgment and can do no more than hope Congress will make good on the promises recruiters made in good faith to plaintiffs and others of the World War II and Korean War era--from 1941 to 1956, when Congress enacted its first health care insurance act for military members, excluding older retirees. . . . We cannot readily imagine more sympathetic plaintiffs than the retired officers of the World War II and Korean War era involved in this case. They served their country for at least 20 years with the understanding that when they retired they and their dependents would receive full free health care for life. The promise of such health care was made in good faith and relied upon. Again, however, because no authority existed to make such promises in the first place, and because Congress has never ratified or acquiesced to this promise, we have no alternative but to uphold the judgment against the retirees' breach-of-contract claim. . . . Perhaps Congress will consider using its legal power to address the moral claims raised by Schism and Reinlie on their own behalf, and indirectly for other affected retirees.'.

(4) Only the United States Congress can make good on the promises recruiters made in good faith to plaintiffs and others of the World War II and Korean War era.

(5) Statutes enacted in 1956 allowed those who entered service on or after December 7, 1956, and retired after serving a minimum of 20 years or by reason of a service-connected disability to medical and dental care in any facility of the uniformed services, subject to the availability of space and facilities and the capabilities of the medical and dental staff.

(6) Recruiters, re-enlistment counselors, and officers at all levels of the uniformed services, and other government officials, as agents of the United States Government, continued to allow members who entered the uniformed services to believe they would be entitled to fully paid lifetime health care upon retirement, despite enactment of statutes in 1956, subsequent statutes, and the issuance of regulations that defined and limited the availability of medical care to retired members of the uniformed services.

(7) After 4 rounds of base closures between 1988 and 1995 and further drawdowns of remaining military medical treatment facilities, access to `space available' health care in a military medical treatment facility is difficult or virtually nonexistent for many military retirees.

(8) The failure to provide adequate health care upon retirement is preventing the retired members of the uniformed services from recommending, without reservation, that young men and women make a career of any military service.

(9) Although provisions in the Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001 (as enacted into law by Public Law 106-398) extended coverage under the TRICARE program to medicare eligible military retirees age 65 and older, those provisions did not address the health care needs of military retirees under the age of 65.

(10) The United States should make good on the promises recruiters made in good faith in the World War II and Korean War era and reestablish high quality health care for all retired members of the uniformed services.

SEC. 3. COVERAGE OF MILITARY RETIREES UNDER THE FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM.

(a) Coverage for Retirees and Dependents- (1) Section 1108 of title 10, United States Code, is amended to read as follows:

`Sec. 1108. Health care coverage through Federal Employees Health Benefits program

`(a) FEHBP Option- The Secretary of Defense, after consulting with the other administering Secretaries, shall enter into an agreement with the Office of Personnel Management to provide coverage to eligible beneficiaries described in subsection (b) under the health benefits plans offered through the Federal Employees Health Benefits program under chapter 89 of title 5.

`(b) Eligible Beneficiaries; Coverage- (1) An eligible beneficiary under this subsection is--

`(A) a member or former member of the uniformed services described in section 1074(b) of this title;

`(B) an individual who is an unremarried former spouse of a member or former member described in section 1072(2)(F) or 1072(2)(G);

`(C) an individual who is--

`(i) a dependent of a deceased member or former member described in section 1076(b) or 1076(a)(2)(B) of this title or of a member who died while on active duty for a period of more than 30 days; and

`(ii) a member of family as defined in section 8901(5) of title 5; or

`(D) an individual who is--

`(i) a dependent of a living member or former member described in section 1076(b)(1) of this title; and

`(ii) a member of family as defined in section 8901(5) of title 5.

`(2) Eligible beneficiaries may enroll in a Federal Employees Health Benefit plan under chapter 89 of title 5 under this section for self-only coverage or for self and family coverage which includes any dependent of the member or former member who is a family member for purposes of such chapter.

`(3) A person eligible for coverage under this subsection shall not be required to satisfy any eligibility criteria specified in chapter 89 of title 5 (except as provided in paragraph (1)(C) or (1)(D)) as a condition for enrollment in health benefits plans offered through the Federal Employees Health Benefits program under this section.

`(4) For purposes of determining whether an individual is a member of family under paragraph (5) of section 8901 of title 5 for purposes of paragraph (1)(C) or (1)(D), a member or former member described in section 1076(b) or 1076(a)(2)(B) of this title shall be deemed to be an employee under such section.

`(5) An eligible beneficiary who enrolls in the Federal Employees Health Benefits program under this section shall not be eligible to receive health care under section 1086 or section 1097. Such a beneficiary may continue to receive health care in a military medical treatment facility, in which case the treatment facility shall be reimbursed by the Federal Employees Health Benefits program for health care services or drugs received by the beneficiary.

`(c) Change of Health Benefits Plan- An eligible beneficiary enrolled in a Federal Employees Health Benefits plan under this section may change health benefits plans and coverage in the same manner as any other Federal Employees Health Benefits program beneficiary may change such plans.

`(d) Government Contributions- The amount of the Government contribution for an eligible beneficiary who enrolls in a health benefits plan under chapter 89 of title 5 in accordance with this section may not exceed the amount of the Government contribution which would be payable if the electing beneficiary were an employee (as defined for purposes of such chapter) enrolled in the same health benefits plan and level of benefits.

`(e) Separate Risk Pools- The Director of the Office of Personnel Management shall require health benefits plans under chapter 89 of title 5 to maintain a separate risk pool for purposes of establishing premium rates for eligible beneficiaries who enroll in such a plan in accordance with this section.

`(f) Reimbursement for Expenses for Health Care Services Normally Provided by the Department of Defense Under TRICARE Standard- The Secretary of Defense shall develop and implement a system to reimburse an eligible beneficiary who enrolls in a health benefits plan under chapter 89 of title 5 in accordance with this section for health care costs incurred by the beneficiary that are not paid under the health benefits plan but would have been paid by the Department of Defense under TRICARE Standard.'.

(2) The item relating to section 1108 at the beginning of such chapter is amended to read as follows:

`1108. Health care coverage through Federal Employees Health Benefits program.'.

(b) Effective Date- The amendments made by this section shall take effect on October 1, 2005.

SEC. 4. REIMBURSEMENT FOR TRICARE PHARMACY BENEFITS AT TRICARE NETWORK PHARMACY LEVELS TO CERTAIN MILITARY RETIREES AND DEPENDENTS IN HARDSHIP CASES.

(a) In General- In the case of an eligible person who has a certification described in subsection (b), the Secretary shall reimburse such person for pharmacy benefits received from a pharmacy that is not a TRICARE network pharmacy in the same manner and in the same amounts as the Secretary would reimburse such person for such benefits received from a pharmacy that is a TRICARE network pharmacy.

(b) Certification- The certification referred to in subsection (a) is a certification from an eligible person's physician--

(1) stating that the person does not have access to a TRICARE network pharmacy due to physical or medical constraints; and

(2) meeting such other criteria as the Secretary of Defense considers appropriate.

(c) Eligible Person- In this section, an eligible person is an eligible beneficiary as described in section 1108(b) of title 10, United States Code who has another insurance plan or program that provides primary coverage for health benefits.

SEC. 5. WAIVER OF MEDICARE PART B PREMIUM FOR CERTAIN MILITARY RETIREES.

(a) In General- Section 1839 of the Social Security Act (42 U.S.C. 1395r) is amended--

(1) in subsection (a)(2), by striking `The monthly premium' and inserting `Except as provided in subsection (j), the monthly premium'; and

(2) by adding at the end the following new subsection:

`(j)(1) The amount of the monthly premium for an eligible individual enrolled under this part is equal to $0.

`(2) For purposes of paragraph (1), the term `eligible individual' means--

`(A) an individual who is entitled to retired or retainer pay based upon service in the uniformed services (as defined in section 101 of title 10, United States Code) that began before December 7, 1956;

`(B) the spouse (as determined under section 7703 of the Internal Revenue Code of 1986) of an individual described in subparagraph (A); and

`(C) the widow or widower, as the case may be, of an individual described in subparagraph (A).

`(3) With respect to years beginning after the date of the enactment of this subsection, the monthly premium rate calculated under subsection (a)(3) for individuals enrolled under this part who are not eligible individuals under this subsection shall be determined without regard to benefits and administrative costs attributable to such eligible individuals during such years.'.

(b) Conforming Amendment- Section 1839(i) of the Social Security Act (42 U.S.C. 1395r(i)) is amended by adding at the end the following new paragraph:

`(7) INAPPLICABILITY TO CERTAIN MILITARY RETIREES- This subsection shall not apply to eligible individuals (as defined in subsection (j)(2)).'.

(c) Effective Date- (1) The amendments made by this section shall apply to premiums for months beginning with January 2005.

(2) The Secretary of Health and Human Services shall use the rebate methodology established pursuant to section 625(a)(2) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173, 117 Stat. 2318) to provide rebates to eligible individuals (as defined in subsection (j)(2) of section 1839 of the Social Security Act, as added by subsection (a)) of any premium or premium penalty paid under such section for months beginning on or after January 1, 2005.

END