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[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]

                         FULFILLING THE PROMISE

=======================================================================

                                HEARING

                               before the

                   SUBCOMMITTEE ON THE CIVIL SERVICE

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 3, 2000

                               __________

                           Serial No. 106-183

                               __________

       Printed for the use of the Committee on Government Reform

  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform

                              -----------

                   U.S. GOVERNMENT PRINTING OFFICE
69-952                     WASHINGTON : 2001

_______________________________________________________________________
 For sale by the Superintendent of Documents, U.S. Government Printing 
                                 Office
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                     COMMITTEE ON GOVERNMENT REFORM

                     DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York         HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland       TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut       ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
STEPHEN HORN, California             PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida                PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia            CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana           ELEANOR HOLMES NORTON, Washington, 
MARK E. SOUDER, Indiana                  DC
JOE SCARBOROUGH, Florida             CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South     DENNIS J. KUCINICH, Ohio
    Carolina                         ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia                    DANNY K. DAVIS, Illinois
DAN MILLER, Florida                  JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas             JIM TURNER, Texas
LEE TERRY, Nebraska                  THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois               HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon                  JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California                             ------
PAUL RYAN, Wisconsin                 BERNARD SANDERS, Vermont 
HELEN CHENOWETH-HAGE, Idaho              (Independent)
DAVID VITTER, Louisiana

                      Kevin Binger, Staff Director
                 Daniel R. Moll, Deputy Staff Director
           David A. Kass, Deputy Counsel and Parliamentarian
                    Lisa Smith Arafune, Chief Clerk
                 Phil Schiliro, Minority Staff Director
                                 ------                                

                   Subcommittee on the Civil Service

                   JOE SCARBOROUGH, Florida, Chairman
ASA HUTCHINSON, Arkansas             ELIJAH E. CUMMINGS, Maryland
CONSTANCE A. MORELLA, Maryland       ELEANOR HOLMES NORTON, Washington, 
JOHN L. MICA, Florida                    DC
DAN MILLER, Florida                  THOMAS H. ALLEN, Maine

                               Ex Officio

DAN BURTON, Indiana                  HENRY A. WAXMAN, California
                      Garry Ewing, Staff Director
                 Susan Waren, Professional Staff Member
                         Bethany Jenkins, Clerk
            Tania Shand, Minority Professional Staff Member

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on April 3, 2000....................................     1
Statement of:
    Day, Colonel George ``Bud'', USAF retired, Class Action 
      Group; Colonel George Rastall, USAF retired of the Retired 
      Officers Association; and Stephen W. Gammarino, senior vice 
      president, Blue Cross/Blue Shield Association..............    19
    Flynn, William ``Ed'', Director, Retirement and Insurance 
      Programs, Office of Personnel Management; and Rear Admiral 
      Thomas F. Carrato, Director, Military Health System 
      Operations, TRICARE Management Activity....................    48
    Shows, Hon. Ronnie, a Representative in Congress from the 
      State of Mississippi.......................................     7
Letters, statements, etc., submitted for the record by:
    Carrato, Rear Admiral Thomas F., Director, Military Health 
      System Operations, TRICARE Management Activity, prepared 
      statement of...............................................    61
    Flynn, William ``Ed'', Director, Retirement and Insurance 
      Programs, Office of Personnel Management, prepared 
      statement of...............................................    51
    Gammarino, Stephen W., senior vice president, Blue Cross/Blue 
      Shield Association, prepared statement of..................    36
    Rastall, Colonel George, USAF retired of the Retired Officers 
      Association, prepared statement of.........................    25
    Scarborough, Hon. Joe, a Representative in Congress from the 
      State of Florida:
        Army brochures...........................................    45
        Prepared statement of....................................     4
    Shows, Hon. Ronnie, a Representative in Congress from the 
      State of Mississippi, prepared statement of................    11

 
                         FULFILLING THE PROMISE

                              ----------                              

                         MONDAY, APRIL 3, 2000

                  House of Representatives,
                 Subcommittee on the Civil Service,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9 a.m., in the 
City Council Chambers, City Hall, Government Street, Pensacola, 
FL, Hon. Joe Scarborough (chairman of the subcommittee) 
presiding.
    Present: Representatives Scarborough and Cummings.
    Also present: Representative Shows.
    Staff present: Garry Ewing, staff director; Jennifer 
Hemingway, deputy staff director; Miguel Serrano, counsel; 
Susan Waren, professional staff members; Bethany Jenkins, 
clerk; Tania Shand, professional staff member; and Earley 
Green, minority assistant clerk.
    Mr. Scarborough. I would like to call this hearing to 
order, the Subcommittee on the Civil Service, for Government 
Reform.
    I want to welcome all of you here again. This hearing of 
course is a very positive, exciting followup to hearings that 
we held across northwest Florida a few years back on TRICARE, 
and in those TRICARE hearings we had an outstanding turnout and 
participation from Panama City over to Pensacola, and of course 
we got a lot of testimony into the record, and we saw some very 
positive changes in the TRICARE system as it pertained to 
northwest Florida that at least we were getting more response 
back from the carrier and the government than we had had in the 
past.
    Unfortunately nationwide it did not go far enough, and 
unfortunately there is still a belief that the promise that was 
made to our fighting men and women and their dependents has 
been broken.
    So I am glad that we are now in a position where we are 
actually being able to use that information and getting to the 
point where I really think we can make some definite progress 
on Capitol Hill this year, a legislative process that begins 
the long journey toward keeping the promise that the Federal 
Government made again to the men and women that fought and 
protected and defended this country.
    Today our committee is going to discuss extending 
enrollment in the Federal Employees Health Benefits Program to 
certain military health care beneficiaries. I hope today we are 
going to be able to develop a consensus approach to bring high 
quality, reliable health care coverage to men and women who 
have served this country under arms.
    Ensuring that our shores are defended and our freedom is 
protected are responsibilities that have to be shared by all 
Americans. Yet we must recognize that many factors contribute 
to the success of our military force, including good, quality 
health care. A strong military medical system is necessary to 
support not only present active duty forces, but also to uphold 
the promise that was made to many of our military retirees.
    Earlier this month Defense Secretary Cohen stated before 
the Senate Armed Services Committee, ``We have made a pledge. 
Whether it is legal or not, it is a moral obligation that we 
take care of all of those who served, retired veterans and 
their families, and we have not done so,'' and I say it is 
about time that people in positions of authority start saying 
that.
    In fact, I remember last year when I had the Joint Chiefs 
before the Armed Services Committee I asked every last one 
whether they thought that a promise was made and a promise was 
broken. And every last one of them testified under oath that 
they themselves believed they were promised good quality health 
care for life, and promised free health care for life, and they 
all said they believed that that promise had been broken. So I 
am glad people are starting to testify under oath in Congress 
that they believe a promise was made and a promise was broken.
    I could not agree with them more. While recruiting 
shortages in all services are continuing, except for the Marine 
Corps, keeping faith with the military retirees by upholding 
the promise is paramount. What potential recruits think once 
they learn the government has broken its word to a man like 
Colonel Bud Day, a Congressional Medal of Honor recipient and 
the Nation's most highly decorated officer since General 
McArthur, what they are thinking is that if a promise can be 
made to a great American hero like that, it can be broken to 
him. None of us will forget Colonel Day's 67 months as a 
prisoner of war in North Vietnam and the heroic way he handled 
himself there, or after he was released.
    Since the implementation of the TRICARE program numerous 
problems have been reported. Nonpayment of providers, lack of 
accessibility for patients, and unavailability of prescription 
drugs are among the complaints. To address these concerns we 
set up a Congressional TRICARE advisory committee and held a 
series of hearings across this district from July 1996 to 
December 1997. And through the information gained by public 
hearings and comprehensive independent research the committee 
came to the conclusion that the current TRICARE program was in 
need of serious reform or overhaul. Testimony from retirees, 
health care providers, and government officials contributed to 
the committee's final decision that the TRICARE health care 
system fell far short in delivering on its promise of free 
medical care for life.
    And, you know, I use that term ``free,'' and other people 
use that term ``free.'' Maybe we could ask Colonel Day and 
other people who served whether they consider it to be free. I 
mean it has already been paid for, and paid for with blood, 
sweat, tears, and effort, and time away from their loved ones.
    Hearings the subcommittee held in earlier Congresses also 
revealed deficiencies in the military health care system. While 
the TRICARE committee made progress toward resolving specific 
problems with TRICARE, the broader issue of the broken promise 
to military retirees still needs to be addressed.
    Many of us are aware of the words of Judge Vincent ruling 
in Federal District Court in Florida that, ``The plaintiffs 
certainly have a strong equitable argument that the government 
should abide by its promises. Regrettably, the law does not 
permit me to order the United States to do so. Under the 
constitutional separation of powers, relief for the plaintiffs 
must come from Congress and not from the judiciary.'' I think 
it is past time that Congress live up to its responsibility. We 
need to make this issue a top priority in Congress, and a top 
priority to keep our word.
    I am proud to have joined Congressman Ronnie Shows and 
Charlie Norwood as a sponsor on H.R. 3573, the ``Keep Our 
Promises to America's Military Retirees Act.'' Congressman 
Shows is here today. His visit before the subcommittee today is 
an example of the commitment of many members to military 
retirees. We must keep our ongoing commitment to promote health 
care needs of America's military retirees. Restoring the 
promise is crucial, and I hope that this hearing will be a step 
in the right direction, and that the Members of Congress will 
work with me to keep faith with those who have sacrificed so 
long to keep America free.
    And with that I would like to recognize the ranking member 
of the subcommittee, the Honorable Elijah Cummings who traveled 
all the way down from Baltimore last night, and even fought 
thunderstorms over Atlanta to be here today.
    Congressman Cummings.
    [The prepared statement of Hon. Joe Scarborough follows:]

    [GRAPHIC] [TIFF OMITTED] T9952.001
    
    [GRAPHIC] [TIFF OMITTED] T9952.002
    
    Mr. Cummings. Thank you very much, Mr. Chairman, and, I 
thank you for calling this hearing today, and as the ranking 
minority member I extend a warm welcome to our colleague, 
Representative Shows, and other panelists. Thank you for 
agreeing to appear in person before our subcommittee and 
present testimony on military access to the Federal Employees 
Health Benefits Program.
    I am pleased that Chairman Scarborough and I were able to 
work in a bipartisan manner to introduce long-term care 
insurance legislation for Federal and military employees and 
retirees. We made a promise to move legislation on long-term 
care when we were in Florida last year, and I am proud to say 
that that is a promise which will be kept.
    Today's hearing is very, very important. Health care is a 
quality of life issue for the young enlisted soldier in the 
field, military spouses and children, and retirees who have 
spent their careers in service.
    I have often said that we have one life to live, that this 
is no dress rehearsal, and this so happens to be that life. The 
Department of Defense promised to provide free health and 
dental care to every member of the military. Those 65 years of 
age and older who chose military service as a career and put 
their lives on the line as Chairman Scarborough mentioned a few 
minutes ago defending our country are finding they are not 
eligible for their military's health care system, TRICARE. 
Retirees over 65 can obtain military health care only if space 
is available at military health care facilities, and after 
TRICARE enrollees and other active duty members and their 
dependents receive care.
    Unfortunately illness does not wait for anyone. They face 
high out-of-pocket costs and limited, if any, pharmacy 
benefits. Military beneficiaries desperate for solution to the 
inadequacies of TRICARE want to be included in the FEHBP 
program. The FEHBP provides voluntary health insurance coverage 
for over 9 million Federal employees, retirees, and their 
dependents. Program enrollees can choose between 10 and 30 
plans available to them in their geographic area, between 10 
and 30 plans.
    To differing degrees FEHBP plans cover inpatient and 
outpatient care, prescription drugs, and mental health 
services, and many cover dental care expenses. This plan is 
considered a model health care system, and it would be 
unfortunate if we tried to help one group of beneficiaries and 
hurt another.
    The National Association of Retired Federal Employees 
[NARFE], has expressed concern that absent sufficient 
safeguards proposals to broaden participation in the FEHBP 
program could result in higher premiums, reduced coverage, and 
fewer plan options for both Federal civilians and non-Federal 
civilians.
    NARFE suggested that separate risk pools be created for 
Federal civilian enrollees and military retirees. The Office of 
Personnel Management recommends that any alternative program 
for military health care be modeled on the Federal health plan, 
but be an entirely separate parallel program.
    The bills introduced by Representative Shows and Norwood 
address the concerns raised by NARFE and OPM. H.R. 2966 and 
H.R. 3573 create a separate risk pool for military retirees who 
access FEHBP plans. Without a doubt, military families and 
retirees deserve a quality health care system. We are here 
today to discuss how best to make that happen. I look forward 
to the testimony of our witnesses, and hope that you will 
assist us in bringing quality health care to military retirees.
    And I thank you.
    [Applause.]
    Mr. Scarborough. Thank you.
    Very briefly before we start this I wanted to recognize a 
leader in our TRICARE panel who is here today, Admiral Tim 
Wright who has served--Admiral, if you could just stand real 
quickly and let everybody see you--Admiral Wright took the lead 
in our TRICARE panel over the past few years, and again the 
findings of that committee have contributed greatly to this, 
and I think in the end will have a big impact not only on what 
this subcommittee does, but also what Congress does. I thank 
you and everybody else that was able to help out.
    With that, I would like to go ahead and move on to our 
first panel, and again we are very honored to have Congressman 
Shows. He is from the Fourth District of Mississippi, and he is 
on the Veterans Affairs Committee and the Transportation 
Committee. He of course is the primary sponsor who introduced 
along with Congressman Norwood the bill that I believe goes 
further than any other bill ever to help keep the promise that 
was made to our military retirees.
    Congressman Shows.

 STATEMENT OF HON. RONNIE SHOWS, A REPRESENTATIVE IN CONGRESS 
                 FROM THE STATE OF MISSISSIPPI

    Mr. Shows. First of all, Congressman Scarborough, I would 
like to tell you, Mr. Chairman, we appreciate so much being 
here and testifying before your committee, and honored guests, 
and certainly, Congressman Cummings, it is a pleasure to be 
here and an honor, and it is an honor to have an opportunity to 
introduce such a great bill, in my opinion, not because Ronnie 
Shows is the author, but because it is the right thing to do.
    And of course serving with Charlie Norwood is a pleasure 
and an honor, and he is one of the co-authors with me on the 
bill, and I cannot tell you how much it means to me to be able 
to--you are always hearing about people having impacts on 
legislation, and it is not so much me because it is the people 
behind us who made it work. It is the military retirees who 
made this bill work right now, and serving with members like 
you guys has been tremendous.
    I would like to say first of all that without your 
leadership, Congressman Scarborough, and what you have done, 
because I have found since I am a freshman up there, and this 
is my first full year up there, and I have found the leadership 
in neither party, Democrat or Republican at this time are 
really jumping up and down about this bill. I know you are 
catching some flak for being a co-sponsor on this bill, both of 
you are just like I am, because neither party is--really they 
say it is costing too much to present this bill, but I cannot 
think of any other priority I would rather have than our 
military retirees and our military, and I mean that.
    But in starting my testimony what I would like to do is, of 
course I have gotten my written statement I would like to 
submit to you, but I would just like to talk about the bill and 
what we are trying to do, and the men and women we are trying 
to do this for. And this is something they have earned, it is 
not something that was given to them or they did not earn it. 
The men and women have earned this career in the military.
    Mr. Chairman, when this bill came about it about a year 
ago. I was in Laurel, MS, I had been in office about 3 months 
and I got a call from two gentlemen, Jim Whittington from 
Laurel, MS, and Mr. Floyd Sears from Mississippi. And they 
asked me to come to a meeting in Laurel, they had military 
retirees coming from all over the country. And my dad is a 
veteran. He was captured at the Battle of the Bulge in World 
War II, and a prisoner of the Nazis. And my dad, we have taken 
him to the Veterans Hospital many times for the care he needs 
in Jackson.
    I guess when I got elected one of the first committees I 
asked to serve on was the Veterans Committee, because I wanted 
to see if I could help to make things a little bit better for 
our veterans. And it is not that men and women are not 
dedicated at the Veterans Hospitals, they are, but one of the 
problems is underfunding, the cuts and things that have 
happened over the last several years.
    But anyway, when I went to this meeting I never heard of 
the broken promises, I did not know--I have always taken it for 
granted like a lot of citizens out here that military retirees, 
once you retire from the military you had health care and all 
this big fancy retirement, Colonel Day, that you think anybody 
would have that served their country, or worked for the Federal 
Government, or any big company.
    When I started hearing the testimony of the men and women 
that served this country for 20 years and found out that first 
of all if you did not go to the military hospital with the 
TRICARE/CHAMPUS that it is hard to get health coverage. I have 
talked to two or three doctors in Laurel, MS, and they do not 
take TRICARE/CHAMPUS because they said it is too hard to get 
the payment, and they say it is nothing against the TRICARE and 
CHAMPUS people who run those organizations, it is just the fact 
that is the way it is.
    And then I was shocked to find out that you did not get in 
a veterans hospital after you retired unless there was bed 
space available, Congressman Cummings. I was not aware of that. 
And so I really started seeing the problem that we have out 
there. The problem is that if you are a military retiree you 
are almost treated like a second-class citizen, and I do not 
see how we can look our men and women in the face with a clear 
conscience who served this country and gave up the biggest of 
the earning part of their years you might say, the biggest pay 
earnings part of their lives for this country, and then we not 
live up to a commitment.
    And also the people like Jim Whittington who served 20 
years and who was a recruiting officer, and him knowing that he 
told young men and women if they would join the Army for 20 
years they would have free health care for the rest of their 
lives, and they thought they were being told the truth, and so 
they helped recruit people in by telling this thinking that is 
the way it really was, and then you go--and I went to a hearing 
1 day and Jim and them had posters up into the nineties that 
said join the Army for 20 years, retire from the Army, and you 
will have free health care for the rest of your life.
    I am telling you, and I have nothing against car salesmen, 
but you know sometimes a car salesman will just say a little 
bit more to get you to buy that car. Well, that is almost what 
our government has done to try to get men and women. They will 
tell them maybe not the whole truth to recruit them into our 
service, thinking all the time they had health care for the 
rest of their lives.
    Well, I do not think our Federal Government ought to treat 
this situation like this, I think it is wrong, I think it is 
misleading, and how can we say that we are honoring our 
military retirees when we do not keep our word.
    And so after I got through with that meeting Jim 
Whittington asked me, he said ``Would you introduce a bill?'' I 
said ``Just as quick as I can get back to Washington we will 
get our draftsmen to see if we can get this bill together.''
    Well, anyway, our legislative person and director in my 
office is a guy by the name of Phil Alperson, and I know a lot 
of these men out here who are working with us on this bill, 
Colonel Day and some of the others know Phil Alperson, and Phil 
went to work on this bill, and about that time Congressman 
Norwood got with us and we put our teams together, and they 
came up with this bill, and the first bill was 2966.
    Well, today on 2966 that was the original bill, we have 
nearly 300 sponsors on that bill. We found a technical error in 
the bill and reintroduced a new bill, 3573, which is a bill 
that hopefully we will eventually take up that has got like 250 
co-sponsors on it today.
    In the Senate it is Senate bill 2003, and the reason I am 
calling out these numbers is that if you do not know them I 
want you to call your Senators and ask them to please get on 
this bill because as of today we only have 25 Senators I 
believe on the bill. And what does the bill do?
    The bill keeps the commitment. What the bill does do is if 
you have enlisted prior to 1957 you get free health care for 
the rest of your life, you and your spouse, like you were told 
you were going to get. And then what it does after you hit 65 
and up to 65 you have the opportunity to take CHAMPUS, TRICARE, 
or the Federal Employees Health Benefits Plan. And then after 
65 instead of getting dumped like you are getting dumped now at 
the age of 65 and they take all of your health care away from 
you you get to keep it or with the option of the Federal 
Employees Health Benefits Package.
    So these are things that we feel like need to be done. I 
just cannot see how we can ask men and women who served in 
World War II, Korea, Vietnam, and the Persian Gulf not to at 
least keep our word to these men and women. They have devoted 
their lives for this country.
    And again I would like to give credit where credit is due. 
We have had a lot of organizations that have come in and helped 
us with this bill, the National Association for Uniformed 
Services, the Retired Enlisted Association, the Class Act group 
of the military retirees, and I have already mentioned Charlie 
Norwood which has been a great co-sponsor and a supporter of 
this bill.
    But above all I need to acknowledge the grassroots efforts, 
because this is what it is, and what is really astounding about 
this bill is first of all you do not see lobbyists making 
$200,000 with the pin striped suits and the leather cases 
walking up and down the halls of Congress to help pass this 
bill. It is the men and women in this auditorium this morning; 
it is the Jim Whittingtons and the Floyd Sears from Mississippi 
on their computers along with Colonel Day and some others here 
that are out writing and talking to their fellow colleagues 
they have served in the services with. This is the reason this 
bill is making its way. Is not what Ronnie has done, or Joe, or 
Charlie, or anybody else. It is the men and women behind the 
bill that are making it go.
    I think that if we can keep the presence of this bill alive 
I think we might have a chance, but more than that we owe it to 
these men and women to do this, and I hate to keep repeating 
myself, but I am holding the scale up here. I have got a 
scale--on this side I have got men and women who served this 
country for 20 years. On this scale I have got Federal 
employees and elected officials like myself. Hey, we serve 20 
years, we get to keep ours, we pay a small supplement, but we 
get to keep ours. But on this scale the men and women who let 
us get to the point that we are at in our lives right now, we 
drop them off the scale.
    How in the world can we defend giving Federal employees and 
elected officials like us health care retirement and we drop 
our men and women off who served this country. I do not 
understand it. But anyway, that is the justice I feel that is 
being done.
    Again I want to thank you, Mr. Chairman, for conducting 
this hearing, and this first opportunity for military retirees 
to bring their case directly to the United States.
    Thank you again, and I appreciate the opportunity of being 
here this morning.
    [Applause.]
    [The prepared statement of Hon. Ronnie Shows follows:]

    [GRAPHIC] [TIFF OMITTED] T9952.003
    
    [GRAPHIC] [TIFF OMITTED] T9952.004
    
    [GRAPHIC] [TIFF OMITTED] T9952.005
    
    Mr. Scarborough. Thank you so much.
    I appreciate that testimony. It was great, it was to the 
point and, you know, you talked about cost, and certainly that 
is what I hear. I hear a lot of people complaining about the 
cost. I would say, and I think you could make the argument very 
easily, that the cost of breaking the promise is even greater.
    Mr. Shows. That is right.
    Mr. Scarborough. I mean there is a reason why all the other 
services but the Marine Corps are having trouble filling their 
levels for recruitment. I can tell you, and some people that 
have heard me talk about this before probably have heard this 
story too much, but it is to the point. My grandfather, when I 
was 16 or 17 years old, served in the Navy; he started as an 
enlisted pilot. In fact, he trained here at Whiting Field, but 
he flew in World War II, he flew in the Korean War, gave 30 
years to the Navy, risked his life, was at Pearl Harbor on the 
Maryland which sunk. At the end of his life, after serving for 
30 years, he was very bitter toward the very government, the 
very country to whom he dedicated his entire life, and was 
bitter and upset because he felt like he had had a promise 
broken to him. What impact did that have on me when I was 17 or 
18 years old? Not following that path; if they could not keep 
the promise to him how would I know they would keep the promise 
to me.
    The same thing with my two boys. I have got boys that are 
12 and 9. I would love for them to follow in the footsteps of 
their grandfather. Would I do it now? No.
    If there is no commitment from the elected leaders on both 
ends of Pennsylvania Avenue to keep their word to the men and 
women who in the end, like you said, do more than anybody else 
to protect and defend this country, what does that say? I think 
we have got to get our heads screwed on right in Washington, 
and I am confident we will. I am confident that when my boys 
are 18 years old when it is a time where they can go into the 
Navy, or the Air Force, or the Army or Marines that we will 
have this situation taken care of.
    And again I want to thank you for being here and starting 
us down that path.
    Mr. Shows. Thank you.
    Mr. Scarborough. Let us talk a little bit about your 
grassroots effort, because you are right, I mean you can think 
of just about every bill that comes before Congress, and you 
are lobbied from all sides. I mean certainly I have got no 
problem with lobbyists, have friends who are lobbyists, 
supporters who are lobbyists, but at the same time it seems 
like you are getting hammered on--for instance in Judiciary we 
just had a bill on asbestos. We got hammered on by about 12 
sides on that bill, and yet on a bill like this where Congress 
is being asked to keep its promise, and the President is being 
asked to keep its promise, suddenly it does not seem like there 
are many lobbyists at all.
    Who is it that you are hearing from, and what are you doing 
as far as the grassroots effort goes? And speaking before this 
congressional committee today I know that there are people that 
are going to be reading your testimony all across the country, 
and I know we're going to all see to it--what can men and women 
that have served, what can they do to get involved in this 
effort and make a difference so Congress will keep their 
promise?
    Mr. Shows. Well, I will tell you what is so great about 
this bill, Mr. Chairman, it kind of has a life of its own. I 
think something like this has a bigger meaning, and the people 
who introduced it--and this may sound kind of corny, but I 
think it is a patriotic thing to do. I think the reason this 
bill has gathered the momentum it has is because the men and 
women. Actually this is the first time they have an opportunity 
for this kind of bill to come along, and we did not introduce 
it at time when we did not think could not afford it, but 
because we can afford it.
    Yeah, it may have a high price tag, but it is something 
that is affordable, and what have the men and women have been 
told all these years? ``Oh, when we get the money we are going 
to take care of it.'' Well, they have got the money. We are 
just not setting our priorities right.
    Now, what do we do about the grassroots? I will tell you, I 
do not think we have got to do much more. These guys and ladies 
have gotten on their computers and the Internet. You know, I 
have always wondered--and I am not very computer-oriented 
myself, but evidently some of these men and women are because 
this is what has happened to this bill: they have got their own 
Web site, they are sending out their e-mail, they are 
contacting each other, and basically this thing has just 
mushroomed into 1,000, 10,000 men and women on their computers, 
and the mail, and the radio shows.
    I have listened to Congressmen on C-Span, and before a 
Congressman gets off C-Span he gets calls from veterans saying 
``Are you on House Bill 3573 or 2966?'' It has kind of taken a 
life of its own, and we have got the House floor. I believe 
just as sure as I am sitting right here this morning, if this 
bill came on the floor it would pass. I do not think there is a 
doubt about it; I think this bill would pass.
    Now, in the Senate, like I said right now the last count I 
had we had 25 U.S. Senators on it. Now, if we can get as much 
participation in the U.S. Senate as we have in the House, and 
get both the leadership in the House and Senate, along with the 
Democrats too, to help push this bill we will see it pass. What 
I recommend is to keep doing what you are doing as far as the 
military retirees out there, but just not among yourselves. Go 
to the schools, go to the Rotary Clubs, go to the Lions Clubs, 
give your talks to these clubs and organizations, tell them 
what kind of plight you have had over the last several years or 
several decades trying to help get health care. You are not 
first in line when you go to a veterans hospital just because 
you are retirees; if there is space available you are in line. 
Tell them when you go to a private hospital that it is hard to 
get them to accept your coverage because the hospitals do not 
want to take it unless they are a veterans or military 
hospital. These are the problems, you are having to drive all 
over the country to find somebody to give you health care, even 
when it is available.
    So these are the things--I think by telling your story to 
the press, to the Lions Clubs, to the schools, to any 
organization that will hear you to get this momentum behind 
you, and then ask them to call Washington and ask them why are 
the leaders taking this bill up. Why are they not taking it up? 
And this is the question people are asking themselves.
    And I am not against tax cuts, I know you are not against 
tax cuts, but let me give you my personal philosophy about 
this. We take our priorities first, and what are our 
priorities? The people who made this country free, that is the 
priority. And you know what, we take care of those folks. Guess 
what? When you go look for a job what is the first thing you 
look for? Health care. We all look for health care. When our 
kids go out looking for a job, they look for security of health 
care.
    Well, if we provide health care for our military retirees, 
somebody put on a light bulb, you know, a switch. Hey, I am 
going to look for a job that is going to give me security of 
health care for the rest of my life.
    We call that the four Rs. I think Floyd Sears came up with 
this, we were having a strategy meeting about this bill in 
Laurel with some of these military retirees I was telling you 
about, and he said ``Ronnie, it is the four Rs. First of all 
you can use this as a recruitment tool, the next one you can 
use it for retention or keeping the troops that you do have, 
and then third military readiness.'' We know right now we do 
not have enough men and women in our armed forces right now, 
and the fourth R, and the most important R, it is the right 
thing to do. So if we get our priorities right, which we 
should, and the men and women keep doing what they are doing, I 
will say this: It has got a lot of attention, because I am 
catching some flak from some of my own colleagues about this 
bill, and I know you are too.
    But for gosh sakes, let us look. We have got the biggest 
budget surplus we have ever had in this country, the economy is 
running stronger and longer than it ever has, and we are 
scratching our heads trying to figure out why we cannot get men 
and women in the military.
    I talked with a man in Laurel, or Ellisville--I forget 
where it was--he has got two boys in the Navy, both of them are 
married, and both of them on food stamps and welfare. Now, what 
kind of recruitment tool is that?
    And I am concerned about our military, I am very concerned 
about it. And this is one way we can make a difference.
    Thank you.
    Mr. Scarborough. Well, you are exactly right. I mean again 
we get it at both ends. You have some military active duty men 
and women that are on food stamps right now, and that is the 
message that maybe their younger brother or sister gets, and 
then again you have the situation with my grandfather that is 
repeated every day across the country, and again the impact 
that that has on recruitment is just absolutely devastating. 
You can have all the neat commercials you want in the middle of 
football games, and if you have a grandfather, or an older 
brother, or an older sister say ``Hey, do not believe that,'' 
then it is not going to work.
    And I agree with you also about priorities, spending 
priorities. It is an expensive bill, but again it is worth the 
cost, and I certainly hope that we all can work together to try 
to find offsets to pay for this bill, because I think it is a 
top priority, and I know that will be necessary to get the 
needed votes in the Senate.
    You said we are at 300 in the House, right, over 300?
    Mr. Shows. On the original bill 2966 when we first 
introduced it, right now we are up to about 280 or 290 co-
sponsors.
    Mr. Scarborough. OK.
    Mr. Shows. The bill that we had the technical corrections 
in, 3573, which is the same bill, it just takes care of--what 
we did when we introduced the bill, we meant to have the 
Federal Employees Health Benefits Plan prior to 65, but the 
first bill only included the ones after 65 that had the option 
for the Federal Employees Health Benefits Plan, so what we did, 
we came back with 3573 and put that in there for younger than 
65, and we got like 250, almost everybody--within a week and a 
half we had like almost 190 co-sponsors on that bill too. A lot 
of them do not know it is the same bill just with that 
technical correction in it, but we have got right at 250 
members on H.R. 3573. On the original bill we are bumping 300.
    Mr. Scarborough. OK. Great.
    Mr. Shows. So we certainly want to get all the ones on H. 
R. 2966 on the H.R. 3573.
    Mr. Scarborough. Then again obviously with only 25 in the 
Senate we need to work there, too. But I will tell you what, I 
will make you this commitment, after we have this hearing 
today--and I have been telling the leadership we were going to 
be having a hearing before my committee on this bill--I am 
going to go to them and see what it is going to take to get it 
on the floor, and if there are some things that are needed then 
I pledge to you that I will work together with you, and we will 
work together to get something before them that they can put on 
the bill and that we can pass.
    Mr. Shows. Well, Mr. Chairman, I would like to say I really 
commend you for what you are doing. Again, I know that you are 
catching some heavy duty flak on this bill, and just like 
Congressman Cummings and the rest of us from our own party 
leaderships, each party we represent, and so I really 
appreciate you, and Mr. Norwood, and the rest of the 
individuals, the Republicans and Democrats. It is a bipartisan 
bill--this is not a party bill, it is a bipartisan bill, and 
this is something that needs to be given that top priority, and 
I appreciate your efforts. Thank you.
    Mr. Scarborough. Thank you. And thank you for coming over 
today.
    Mr. Shows. Thank you.
    Mr. Scarborough. Congressman Cummings.
    Mr. Cummings. I will be very brief. I want to thank you too 
for coming to the hearing and giving your testimony which 
certainly was very compelling.
    Now, would this bill come before the Armed Services 
Committee, too?
    Mr. Shows. I will tell you, you are talking to a new guy on 
the block, so I really do not know.
    Mr. Cummings. But it has never had a hearing?
    Mr. Shows. This bill has not had a hearing. With all the 
co-authors we have on this bill, it has not had a hearing, so 
this is what we are trying to do. I believe if the bill gets a 
hearing like Chairman Scarborough is saying it will definitely 
get some attention, and the bill is getting a lot of attention 
from the leadership, you know, but it has not been taken up 
yet, and it is going to have to be pushed, and pushed, and 
pushed until we get somebody to listen to us.
    Mr. Cummings. I really think that this is something we have 
to do. As I was listening to you I could not help but just 
think about 2 years ago when I was over in Bosnia to see our 
troops over there and to see what they were doing, and it was 
just a few of them, but they were protecting the peace, and the 
fact is that I think what happens too often is we take so much 
for granted in this country that we are always going to be the 
way we are, this wonderful free country, but as Chairman 
Scarborough it takes people to be standing up for us. It is not 
enough to lift up the flag, you have got to have people behind 
it, and so the fact is that so many people have given up so 
much so that we can have that freedom, and so I really do thank 
you for your testimony, and I pledge to work with Chairman 
Scarborough to do everything that we can to do our part to get 
this legislation on the floor.
    Thank you.
    Mr. Shows. Thank you.
    Mr. Scarborough. Thank you, Congressman Cummings. 
Congressman Shows, if you have time we would really be honored 
to have you up on the dias and to ask questions of the next 
panel.
    Mr. Shows. OK.
    Mr. Scarborough. So thank you again for your testimony. We 
appreciate it.
    And while he is coming up here I want to thank you and--why 
don't we ask the second panel to come up now. It is Colonel Bud 
Day, Colonel George Rastall, and Stephen Gammarino.
    But I do want to thank you, Congressman Cummings. 
Congressman Cummings mentioned briefly long-term care, which I 
believe is going to be one of the key health care benefits in 
the future, which we were able to pass out of our subcommittee 
and full committee that also is going to help military retirees 
take care of themselves and their loved ones, so we are 
fortunate for that.
    I want to welcome our second panel now, and of course I 
think everybody in the audience knows Colonel George E. ``Bud'' 
Day, retired. Obviously he is a veteran of more than 30 years 
service in the armed forces of the United States. He was born 
in Iowa, joined the Marine Corps in 1942 and served 30 months 
in the South Pacific as a noncommissioned officer, he received 
an appointment as a second lieutenant in the National Guard in 
1950. Colonel Day was called to active duty in the Air Force in 
1951, and entered jet pilot training, and served two tours in 
the Far East as a fighter bomber pilot during the Korean War.
    In April 1967 Colonel Day was assigned to the 31st TAC 
Fighter Wing in Vietnam, and as I think everybody here knows he 
was shot down and was imprisoned in Vietnam, and I know I said 
earlier that you were released--you were released by yourself, 
one of the few that escaped. In fact, I believe you were the 
only one to escape in the South. But we are certainly honored 
to have you here today.
    As most of you know, he has also been a fighter for 
military health care and for keeping the promise, and has filed 
a lawsuit on behalf of many, many men and women who did not get 
what they were promised, and while things did not work exactly 
the way I think all of us wanted in the District Court here we 
may have some good news on appeal.
    So, Colonel Day, I welcome you here.
    I would also like to welcome Colonel George Rastall. He is 
the second vice president of the Pensacola TROA chapter. 
Colonel Rastall served a 34-year career in active and reserve 
forces. He was also a Federal civilian employee, and is 
currently enrolled in FEHBP, and he has also done great things 
fighting to make sure the promise is kept.
    And finally we have Stephen W. Gammarino before us again. 
He is senior vice president with Blue Cross/Blue Shield 
Association, and we certainly look forward to your testimony.
    Colonel Day, if you would.

 STATEMENTS OF COLONEL GEORGE ``BUD'' DAY, USAF RETIRED, CLASS 
   ACTION GROUP; COLONEL GEORGE RASTALL, USAF RETIRED OF THE 
RETIRED OFFICERS ASSOCIATION; AND STEPHEN W. GAMMARINO, SENIOR 
       VICE PRESIDENT, BLUE CROSS/BLUE SHIELD ASSOCIATION

    Colonel Day. Thank you, Congressman Scarborough.
    Congressman Cummings, we have not met. Thanks for being 
here. And Representative Shows, it is nice to see you again.
    Mr. Shows. Nice to see you again.
    Colonel Day. Congressman Shows was just at a meeting up in 
Huntsville where we had about 1,000 World War II and Korean 
veterans who had a meeting about this very subject, and we are 
highly indebted to Congressman Shows for having taken the 
initiative at the grassroots level to meet with his 
constituents and listen to them, and listen to their complaints 
about having been thrown out of military hospitals because they 
were age 65 and having lost a carrier, and been put out into 
the Medicare system of being forced to pay a premium that they 
should not have to pay, and then being subject to all of the 
deductibles and all the problems there are out in the Medicare 
field.
    As you know, Medicare has the ability if you have property 
and run up a staggering bill Medicare will wind up taking your 
estate out, and that money that you have saved and accumulated 
hoping that you would pass on to your children and 
grandchildren to put them through college and so forth goes to 
satisfy your Medicare liens.
    Also there is not any prescription drug carrier out there 
for this group, and that is basically what most old guys, as 
McCain says old geezers, like me need the most. So that is the 
situation that we have been forced into purely because we 
reached the age of 65, and second because the government 
decided they are going to do medical care for us on the cheap.
    It has not been a matter of there have not been funds 
available, it has been a question of what does the government 
want to do with that money.
    No indictment of our current panel obviously, but we just 
had a bill go through, the national budget which just went 
through larded up with $6.1 billion worth of what is described 
as pork. I do not think that our medical care coverage can come 
under the label of pork.
    And so before I go any further I would like to introduce 
Colonel Bob Rinely who is the plaintiff in our lawsuit, if Bob 
would stand up. Bob flew three combat sorties over the Beach in 
D-Day, World War II in France, and he is one of two plaintiffs 
in the class-act lawsuit, and just to summarize that real 
briefly, in 1995 when the government made the election that 
they were going to put us out of military hospitals I listened 
to that, and having heard the promise as an enlisted Marine, 
having paid 20 cents a month out of my pay as an enlisted 
Marine, as did all enlisted Marines and Navy up to mid-World 
War II and previously, all of us were made the promise that if 
we served our 20 years, we were going to have free lifetime 
medical care, and not only was the promise made, but it was 
made in writing, and it was made with proper authority.
    The Blue Jackets Manual as far back as 1918 says that you 
will get free medical care for life if you do your service. And 
not only did they make the promise, but we saw that promise 
being carried out at major hospitals. At the ones that I was in 
back in those days during the war--Balboa Park, Long Beach, and 
Oak Knoll--there were World War I veterans and retired members 
and their families in those hospitals while we active duty 
people were in them during the war. As a practical matter, when 
I retired in 1977, and when Mr. Rinely retired in the 1960's 
they provided that care to us right up until 1995 when the 
government made the election that the money that they had been 
spending on us for medical care was going somewhere else.
    So there is not any question that there is both a moral and 
a legal basis for this. I have provided the Federal court with 
a stack of documents roughly this [indicating] thick that 
articulated in writing the various promises and recruiting 
statements. The Government's defense on March 7th when I was in 
the Federal Circuit Court of Appeals in Washington was that, 
yes, the promise had been made, but they did not have to keep 
it because there was no legislation out there that specifically 
tied our retired medical care to a spending bill. Of course if 
that were in fact true, if that was the only defense out, there 
would be no need for a piece of legislation which is called the 
Little Tucker Act.
    There is a Federal act that says that you can have a quasi-
contract, or an implied-in-fact contract with the Government if 
certain conditions are fulfilled. Our situation has absolutely 
fulfilled those conditions.
    And I might add that the Federal Circuit Court listened 
with great interest. One of the members was a retired West 
Point Lieutenant Colonel, another member was a retired Navy 
Commander, he was a former recruiter in his other life, and the 
third party was a senior Federal lady judge who listened with 
great interest.
    And I might add that the very first case on our docket was 
one in which a confidential informant had been promised a bunch 
of money if he would stick out with this gang, get them all 
hung up, get them busted, and if that happened they would give 
him something like around $100,000. Well, he did his part, the 
government welshed. When the bill went up to Janet Reno to pay 
this guy she said no, she was not paying him. So the judges on 
the panel said it sounded a little bit to them as if 
confidential informants for the Government and retired World 
War II and Korean vets got the same treatment. And I thought 
that spoke eloquently of our situation.
    We are indebted to you all for this hearing. We feel that 
getting H.R. 2966 underway and getting the companion bill in 
the Senate underway certainly will solve this problem from both 
aspects.
    I am quite hopeful that the Federal court is going to rule 
on our behalf. We have given them the documentation to do that.
    If they do that, then the court can order a number of 
things to happen. One thing they can give us is some damages 
for these people who have been spending $45 a month to get the 
care they should have gotten for free.
    The second thing is that it can order some other relief. I 
do not know what that relief will be exactly, and that will 
take care of the past. But what will happen is that H.R. 2966 
and the companion Senate bill will make sure that this becomes 
a matter of law, and we do not have to be haggling about it for 
the veterans of the next war.
    Once again, I cannot say how indebted I am to you all for 
holding the hearings, and I would like to say to every one of 
you who are here that I am equally indebted to you, because if 
you all were not out here behind us and not working with us we 
would not be where we are today.
    I met Congressman Shows a year ago November up in Laurel, 
MS. Around 200 of us were up there explaining to him what our 
problems were, and there were a bunch of people exactly like 
you up there who are in exactly the same boat we are in, and 
they communicated with him, and he acted.
    [Applause.]
    Mr. Scarborough. Thank you, Colonel Day. We appreciate it, 
and of course Colonel Day mentioned McCain. I do not know how 
many of you knew it, but Colonel Day and Senator McCain are 
good friends, and in fact shared the same cell in Vietnam, both 
POWs.
    In fact, you could see Colonel Day barnstorming for John 
McCain throughout South Carolina about a month or two ago, and 
you looked real good on TV every night. We enjoyed it.
    Colonel Rastall.
    Colonel Rastall. Before I start I would like to say if I 
seem biased on one side or the other, I started out enlisted 
and then got a direct commission, so I have feelings for both 
ends of it.
    Mr. Chairman and distinguished members of the Civil Service 
Subcommittee, good morning. On behalf of the Retired Officers 
Association known as TROA, I am pleased and honored to address 
the importance of the government-provided health coverage for 
our 395,000 active retired reserve, and about 70,000 auxiliary 
who are survivors of our former members, as well as all service 
members regardless of their status or rank.
    I was out of the country for 9 years working in other 
places than this country previous to this time. As recently as 
October I reentered the U.S. domain, and I thought I have been 
a member of this organization for years, now I am going to get 
active, and this morning, the talks everybody has given me have 
a lot of enthusiasm, so I do not know if I can work it off and 
get it down to reality here, but I really have a good renewed 
faith in the democratic process by being here this morning.
    First I want to thank you, Mr. Chairman and other 
distinguished members of the Civil Service Subcommittee for 
allowing me to present TROA's view on the Federal Employees 
Health Benefits Program we call FEHBP, and its importance to 
military members and their families.
    Mr. Chairman, the hearings today are extremely important to 
the 44,600 TROA members living in Florida, of which 6,400 live 
in your district. There are 173,200 retirees in Florida, and 
36,600 of these are in your district. Many of these potential 
enrollees are most interested in an option to enroll in FEHBP 
under a program sponsored by DOD.
    Long-term care insurance for Federal employees was pledged 
by you to be able to have the recent legislation that you 
introduced and reported out by the subcommittee, and we are 
very impressed about that. That is known as House bill 4040, I 
believe. Well, with your introduction of this and the favorable 
reporting of that you certainly fulfilled the pledge that you 
made in your other hearings, and that we deeply appreciate. We 
are most grateful to you for that initiative, and look forward 
to its enactment later this year. So thank you for being a 
friend and a strong supporter of the military community.
    TROA believes the Nation has a real health care crisis. 
Why? Because military health care services have been 
significantly curtailed in many locations throughout the world, 
including the Naval Hospital in Pensacola. As you know, I am a 
resident of Pensacola, and have been for a long time.
    This is because of the well known staffing drawdowns, 
reduced operating budgets, or base closures. And the military 
treatment facilities, MTFs we call them, have been closed at 
Orlando and Homestead. Access to care is further reduced when 
inpatient services are closed, such as Patrick Air Force Base 
in 1998, and the planned closure at Tindall Air Force Base this 
year.
    Medicare-eligible retirees who are left to seek care on a 
space-available basis at the MTFs are finding it increasingly 
more difficult because of budget constraints and curtailed 
services. Services are uncertain and, at best, a catch-as-
catch-can health care program.
    The cruel reality is that so many older military retirees 
are left with Medicare as their sole source of health care, a 
benefit that most non-military Americans had upon their 
retirement without having endured the rigors and sacrifices of 
military service.
    In 1966 when the Civilian Health and Medical Program of the 
Uniformed Services called CHAMPUS, and now known as TRICARE, 
was being formulated by the House and Senate Armed Services 
Committee it was intended that retired uniformed services 
beneficiaries have fair health care benefits when they turned 
65 and became eligible for Medicare.
    In the 1966 congressional equation Medicare plus space-
available care equals a fair benefit just does not hold up any 
more, as well recognized by everybody in this room. It is not 
balanced, and it is not equitable. We know only Congress can 
restore health care equity to older retired service members. In 
doing so, it should also ensure at least parity with the 
relatively inexpensive health care available to retired Federal 
civilians. Although that may not be agreed upon by all here, I 
realize you are after full coverage. Of course that would be 
ideal.
    What will the FEHBP option do for retirees? I am a good 
example of what it does. I retired from the active and reserve 
careers and U.S. Government employee programs. I enjoy the 
relatively carefree benefits of Medicare and FEHBP. My wife is 
only eligible for TRICARE Standard, but thankfully we are able 
to use FEHBP rather than having to rely on TRICARE benefits.
    I emphasize that--and this has been alluded to already by 
the Honorable Representative--most of us with families of 
modest means have always had to make career and life decisions 
based in no small way on health benefits. I believe we made our 
decisions on a promise we believed would be virtually 
untouchable.
    During my 9 years out of the country--I came back 
sometimes--but during my 9 years out of the country, almost 
every individual I talked to, one of their major reasons for 
being over there is because they could not get coverage or jobs 
that would cover health benefits, but they could get it as a 
contractor with a contractor overseas. I think that speaks for 
the thing that I am mentioning here.
    Now I will turn to the TROA support for recent legislation. 
As you know, H.R. 2966 and House bill 3573 have been recently 
introduced, and now I am up to date on that as of this morning. 
TROA supports these because they provide a significant step 
toward honoring the lifetime health benefit. The strength of 
the commitment was lucidly describe by Judge Roger Vincent when 
he ruled in the Federal District Court in Florida, which you 
have already alluded to, that, ``The plaintiffs certainly have 
a strong equitable argument that the government should abide by 
its promises. Regrettably, the law does not permit me to order 
the United States to do so under the constitutional separation 
of powers. Relief for the plaintiffs must come from the 
Congress, and not from the judiciary.'' For TROA and I and all 
retirees it is strongly urged that this subcommittee continue 
to work with the House leadership to find the necessary offsets 
to enact the most recent bill.
    In closing, Mr. Chairman, I want to reaffirm that the 
uniformed service members want fair treatment along with the 
other Federal employees. Many want the opportunity to 
participate in the government FEHBP program.
    Finally, on behalf of the military retirees in Florida and 
around the world I want to thank you for allowing me the 
opportunity to present the views of Retired Officers 
Association on this very important matter, and I remind you we 
are not just for us, we are for everybody.
    I would be pleased to respond to any questions you or other 
committee members may have, or provide a written response for 
the record.
    Thank you.
    Mr. Scarborough. Thank you. Next we welcome back to our 
committee again Steve Gammarino. Steve is the vice president 
for the FEHBP for Blue Cross/Blue Shield, and right now I 
believe Blue Cross/Blue Shield serves about 50 percent of those 
that are enrolled in the FEHBP, so you have got quite a big job 
to deal with day in and day out. We thank you for taking time 
out of your busy schedule once again to come before this 
committee and give us testimony. Mr. Gammarino.
    [The prepared statement of Colonel Rastall follows:]

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    Mr. Gammarino. Mr. Chairman, members of the committee, and 
other distinguished guests, good morning. Thank you for the 
opportunity to appear before you today to discuss the benefits 
of extending enrollment in the Federal Employees Health 
Benefits Program to certain military beneficiaries.
    With your permission, Mr. Chairman, I would like to submit 
my written testimony for the record.
    Mr. Scarborough. Without objection.
    Mr. Gammarino. In keeping with your letter of invitation I 
will focus my remarks on a general discussion of the FEHBP and 
the Blue Cross/Blue Shield Association's service benefit plan, 
and what effect from the carrier's perspective this would have 
on our program.
    As you know, the FEHBP is the largest employee-sponsored 
health insurance system in the country. This year they will 
insure over 9 million Federal employees, retirees, and 
dependents. The program is often cited as a model of efficiency 
and effectiveness that the private and public sector should 
attempt to replicate.
    The Blue Cross/Blue Shield plans jointly underwrite and 
deliver what is called the governmentwide service benefit plan 
in the program. This plan has been offered in the FEHBP since 
1960, and it is the largest plan in the program. We currently 
cover approximately 4 million Federal employees, family 
members, and retirees. And we have about 48 percent, 
Congressman Scarborough. We are 2 points shy of that 50 percent 
mark, but we are trying.
    Blue Cross/Blue Shield is keenly aware of the important 
role the program plays in the lives of millions of Federal 
employees, retirees, and their families. As the largest carrier 
in the program, we believe we bear a special responsibility to 
provide stability and integrity to the program, and look 
forward to working with the subcommittee as you examine various 
legislative proposals.
    As you know, the National Defense Authorization Act of 1999 
established a 3-year demonstration project permitting Medicare-
eligible retirees and their dependents to enroll in the FEHBP. 
From the beginning, Blue Cross/Blue Shield has been committed 
to working with OPM and the Department of Defense on a 
demonstration project to determine whether the FEHBP 
participation is a viable option for the retired military 
community.
    At the most recent count we enroll almost 800 contracts, 
which is about, we understand, 46 percent of the total 
demonstration enrollment. As this demonstration project 
continues Blue Cross/Blue Shield is committed to working with 
the appropriate agencies and other military support groups to 
provide necessary information and educate eligible 
beneficiaries about the program.
    Over the past few years numerous proposals have been 
introduced that seek to extend the FEHBP to various groups. The 
proposals have led us to develop four basic principles we would 
like you to consider when evaluating suggestions for extending 
the FEHBP beyond its current enrollment base.
    First, there should be a logical connection between the 
Federal Government as an employer and the population proposed 
to receive the FEHBP coverage.
    Second, the existing private sector role of the FEHBP 
carriers must be preserved to maintain a strong and competitive 
program.
    Third, the infrastructure to handle the expanded enrollment 
should exist, and not have to be created.
    And fourth, the principles of insurance underwriting should 
be preserved. Because the FEHBP is a program of insurance it is 
essential that each carrier underwrite its own risk.
    As we look at the question of existing enrollment in the 
FEHBP to the military beneficiaries, it appears that these four 
principles; would in fact be met.
    Additionally, Blue Cross/Blue Shield can assure the 
subcommittee that we are capable of providing the same high 
quality of service to military beneficiaries that we now 
provide for the civilian enrollees. We would defer to the 
Congress and to the executive branch, specifically OPM and the 
Department of Defense on the related policy choices and 
decisions.
    One issue that has been repeatedly discussed is the issue 
of whether to have separate risk pools for the military 
beneficiaries. From an insurance or risk-management 
perspective, risk pools in this case we do not feel are 
required.
    Under equal conditions of participation we have no reason 
to believe that on average the 65-year-old Medicare-eligible 
military retiree would utilize health care services any 
differently than a similarly situated civilian counterpart.
    I hope that my remarks to you will be helpful in our 
deliberations. Again, thank you for the opportunity to appear 
before you today, and let me assure you that the Blue Cross/
Blue Shield Association stands ready to work with this 
subcommittee as you consider the very important issues before 
you.
    I will be pleased to answer any questions you may have at 
this time.
    [The prepared statement of Mr. Gammarino follows:]

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    Mr. Scarborough. Thank you.
    Colonel Day, let me ask you a very, very basic obvious 
question. I probably would not get away with it in court, but 
we are not in court, are we? so I can ask you a leading 
question.
    Were you promised military health care for life, and by 
whom?
    Colonel Day. Yes, I was. I was promised that by the Marine 
Corps, and again by the Air Force. It was common knowledge, it 
was a common understanding that along with the retirement 
benefit at 20 years that you would have the accompanying free 
medical care. That was part of the recruiting pitch; medical 
care really made it attractive. I might add in 1942 and even up 
through the very early fifties that was the best deal around. 
There was not any equivalent government retirement out there 
like that. General Motors did not give a deal like that; the 
military was very, very unique in that; that promise was 
something that elevated the military retirement to a step above 
a civilian retirement. But on the contrary other side of that 
you had those wars that you had to go to, like World War II, 
Korea, and so on. So, you know, that excellent benefit was 
offset somewhat.
    And I might add that of my own knowledge I know a number of 
people who died in Vietnam trying to make sure that their 
family was going to collect on this promise.
    I was a lifer, as were many of my dear friends, and many of 
these people wound up dying, and they were not able to collect 
on the promise, but they gave their life thinking that the 
promise was going to be carried out.
    And I might add that Judge Vincent's interpretation of what 
the law is on the subject is certainly not binding. He had to 
take a whack at that, and from his own perspective decide 
whether or not it was Congress' problem or the court's. It is 
my view that this is also the court's problem. The court has 
got to sit down and take a look at this series of promises that 
were made, and to decide whether or not they are going to 
deliver on that. And certainly they have the authority under 
the Little Tucker Act to come back and say there is no question 
that there was a promise and we are going to enforce it.
    Mr. Scarborough. You talked about friends of yours who you 
served with in Vietnam that did not come home.
    Colonel Day. Yes.
    Mr. Scarborough. Let us talk just very briefly about our 
experiences in Vietnam. How long were you a prisoner of war?
    Colonel Day. I was a POW for 67 months. I got shot down 
August 26, 1967; I escaped shortly after that; got recaptured, 
and then I was released on March 14, 1973.
    Mr. Scarborough. Again we have heard Senator McCain's talks 
about just what it was like, how horrible that situation was, 
and how difficult is it for you after losing friends, and after 
going through the experiences that you have gone through, how 
difficult is it for you to see your government, the country 
that you were fighting for, that you were willing to put it all 
on the line for, just back away from a promise and not deliver 
to you the same benefits that are delivered to your 
counterparts in the Civil Service?
    Colonel Day. It is quite incomprehensible, and basically 
ignoble. It is just not understandable that the military would 
be selected out as the only group of retired Federal employees 
who are not going to have some good, sound medical care program 
like Blue Cross/Blue Shield which is, you know, basically the 
premier program out there.
    The idea that the military group is discriminated against 
is just not one that I am able to understand, and I think it 
just gets back to the idea that someone made an arbitrary 
decision that they were going to do military medical care on 
the cheap, and said, ``Well, drop these people off into 
Medicare.'' And, as has been alluded to, obviously everyone who 
pays any tax is entitled to go to Medicare. Those people also 
did not have the deprivation of missing their families--in my 
case their Christmas of 1942, 1943, 1944, and 1954 away from 
home--I was 30 months out in the Pacific, I was away from my 
family two tours during the Korean War. Those were short tours, 
about 7 or 8 months each, and then of course I was gone 6 years 
in Vietnam, so it is not very understandable that the 
bureaucracy would have taken off in the direction that they did 
in this discriminatory application of health care benefits to 
Federal employees.
    Mr. Scarborough. Thank you, Colonel. My time is up, but we 
are honored that you are here today, and honored that you 
continue fighting to make sure that America does the right 
thing.
    Mr. Cummings.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    I too thank you, and thank all of you, and the people in 
the audience for what you have done to make our country what it 
is, and to keep it what it is, and I really mean that. When I 
think about my own history and the fact that my mother and 
father were sharecroppers, and for me to be a member of the 
Congress of the United States of America, that did not happen 
just by accident, and I know that it is the people in this room 
that made all of that possible, and I do appreciate it.
    Colonel Rastall, I want to talk just a moment about the 
demonstration project. What steps could the Department of 
Defense and the Office of Personnel Management have taken to 
improve the enrollment in the FEHBP program? I was just 
wondering about that.
    Colonel Rastall. I will make this short because the text of 
my presentation will get in your hands, but TROA believes that 
the low participation rate is attributable to a variety of 
reasons, most significantly I believe some beneficiaries fear 
venturing into the uncharted waters with the worry that they 
would have to change plans again when the test authority 
expires in 2002, and that is their perception of it, and the 
lack of understanding about FEHBP, including potential cost 
savings they would have over their existing Medicare 
supplemental insurance.
    As far as improvements are concerned, we strongly recommend 
that the current test participants be allowed to continue their 
participation in FEHBP even after the conclusion of the 
demonstration program. DOD continued to increase efforts to 
communicate and explain fully the benefits available under the 
FEHBP test, including the option to convert to a Medigap policy 
without preexisting illness restrictions should the test be 
terminated, and the subcommittee support expansion of the FEHBP 
65 program worldwide as quickly as feasible, and make it a 
permanent program.
    Expansion of the test in the fall of 2000 guaranteed 
enrollment beyond December 31st, 2001, and an aggressive 
educational program will lead to a fair demonstration. A 
properly executed test will truly reveal the propensity of 
uniformed services beneficiaries to enroll in the program, the 
resultant government cost, and the success or failure of FEHBP 
as an option that honors the lifetime health care commitment.
    Could I talk just a little bit on cost?
    Mr. Scarborough. Sure.
    Colonel Rastall. You know these things that I am going to 
talk about. These are some of the concerns that we have, or we 
read not only in TROA, but outside TROA. With the forecast of a 
growing budget surplus, as we have already alluded to the fact 
that it is difficult to understand why funding could not be 
had--and we understand a lot of the problems involved in this 
process, do not misunderstand me--DOD civilian leadership 
apparently has chosen in the past to ignore how directly this 
continuing abrogation affects military readiness. I want to say 
lately this seemingly is turning around a little bit.
    Also, more and more the retirees who are the service's best 
recruiters are reluctant to recommend a service career to their 
children and those of friends and neighbors. This is not only 
an issue of equity and employer obligation, it is a readiness 
issue as well, as we have already stated.
    One final point. You probably know that the deliberations 
of the Balanced Budget Act of 1997 resulted in Congress funding 
funds to restore $1.7 billion per year for funding health care 
services for illegal immigrants. I do not know what the outyear 
costs of that would be, or what they would add up to. We know 
what the outyear costs would cost for some of the proposals 
here. We do not begrudge them of their needs, certainly not, 
but retirees find it difficult to understand why Congress could 
not consider at least as high a priority for restoring promised 
benefits to those who fought the hot wars, the cold war, and 
like today's servicemen were and are so often deployed to keep 
the peace.
    Traditionally Congress has always had the will to do the 
right thing. We are confident that congressional leadership can 
find the funding to keep the promise made long ago to career 
veterans.
    Thank you.
    Mr. Cummings. With regard to education under the 
demonstration projects do you think we could have done a better 
job of educating people as to the demonstrations themselves? 
And what was the purpose for the demonstration projects?
    Colonel Rastall. What was the purpose?
    Mr. Cummings. Yes, sir.
    Colonel Rastall. As far as I know, and maybe I would like 
to make a separate report on the details of this, but I am sure 
part of the purpose was for the Congress to see what the 
reaction would be and have a test run here to see what would 
happen.
    Mr. Cummings. Right.
    Colonel Rastall. I mean that is the primary purpose of it--
to see how many people would be interested.
    Mr. Cummings. You are right, you are on the mark, but I 
guess the question is the education. The reason why I mention 
the education piece is that you listed a number of reasons why 
as many people as we thought--or we thought more people would 
enroll, and they did not.
    Colonel Rastall. Right.
    Mr. Cummings. And I think you have given some very good 
reasons, and I was just trying to figure out whether you felt 
that education, educating people as to the demonstration 
projects, was a problem. You might want to speak on that, too, 
Mr. Gammarino. I am just curious, because it just seems like 
the demonstration is the thing that helps you to take the 
demonstration and you say ``OK, this works, and it works 
well,'' and the hope is that you then can take it nationwide 
and do it everywhere, and so I was just wondering about that.
    Colonel Rastall. If we expanded this educational program in 
the sites, in other places, it would help a lot to get more 
participation.
    Mr. Cummings. Mr. Gammarino.
    Colonel Day. May I?
    Mr. Cummings. Sure.
    Colonel Day. I think it is largely a matter of trust. I do 
not think that most of the GIs--Mr. Rinely here kind of heads 
up a loose group of around 10,000 people who we loosely call a 
class act group who are the sponsors of this lawsuit against 
the government. They have lost trust in the government. They do 
not think that any more demonstrations are going to work, they 
think all of these are stopgaps. There are roughly 3 million 
World War II, Korean, pre-June 1956 veterans out there, they 
are dying at the rate of around 1,000 a day. The perception is 
that the government is dragging its feet so these people will 
die off and go away. That is the perception. I think that many 
of these people as soon as they start talking about getting 
moved over to this test group of some kind, or that test group, 
and this is going to terminate in 2003 or whatever it is, they 
just say to themselves, ``Why should I believe that?''
    Mr. Cummings. Why be bothered.
    Colonel Day. Yes. And who knows that is going to work, and 
who knows they are going to keep paying.
    Mr. Cummings. Thank you. That is very helpful.
    Mr. Gammarino. First I do not think it was realistic, given 
the base of enrollees that we started with, that you were going 
to get the potential everybody thought was out there. You 
wanted a group of 66,000, you started with a pool of 66, so it 
was unrealistic to assume you are going to get that level of 
participation.
    Why? My other panel members have already told you some of 
the reasons. Additionally I can tell you just from trying to 
market a health insurance program it takes more than 1 year to 
educate a population in terms of what you have to offer. The 
pilot program, I do not think a lot of people are going to jump 
into a 3-year pilot. What is out there for them in the long 
run?
    In terms of going forward, I understand there is a GAO 
study going to be done in terms of focus groups. I hope and 
assume they will talk to both people that enrolled and that do 
not, but I think in order to get the type of enrollment that 
you need for a demonstration project you are going to have to 
increase the pool. You are not going to get 66,000 people over 
the next couple of years in the existing pool.
    You do need continuous ongoing communications, and you have 
to use a variety of mechanisms and vehicles to get there. From 
my vantage point in terms of educating members to our plans, we 
use a number of vehicles. We use direct mails; we have toll-
free call lines that people can call us and find out about our 
program; we have outbound calls to educate people on what we 
are all about. So there are a number of vehicles, and you 
cannot just stick with one, and you are going to have to use a 
number of support groups.
    The health plan such as Blue Cross/Blue Shield would be 
happy to participate with the agencies, happy to participate 
with the retiree groups, but I think you are going to need a 
coordinated effort to educate these people on what the FEHBP is 
all about.
    And last, but not least, what will happen over a period of 
time is word of mouth. If the current enrollees that are in the 
program are satisfied, they will tell their neighbors, and the 
trust alluded to earlier hopefully would buildup and they would 
find a reason to take a look at a program such as ours.
    Thank you.
    Mr. Cummings. Thank you, Mr. Chairman.
    Mr. Scarborough. Thank you, Congressman Cummings.
    Congressman Shows.
    Mr. Shows. I would just like to have one question for 
Colonel Day. When you were recruited and the coming years after 
that, did they not have posters that were sent out, and 
recruiting materials saying that--did you ever see written 
material that said--I know I saw a poster in I think it was 
like 1991 or 1992 that join the Army for a career and have 
health care for the rest of your life. Have you run across 
those, did you see them in your career or when you were 
recruited?
    Colonel Day. Yes, sir, I have. In fact, I have in my brief 
to the Federal Circuit Court an Army recruiting pitch that is 
directed to lawyers dated November 10, 1997 that promises 
lawyers, you do 20 years and you will have a lifetime of free 
medical care.
    Out in the units back in my active duty days you had people 
who were appointed as in-house recruiters, and as people came 
up, particularly highly skilled enlisted people, as they came 
up to terminate their enlistment you had people who were out 
there counseling them, talking to them, giving them a pitch 
about re-enlisting, and pointing out to them what these medical 
benefits are worth, and what your retirement pay is worth, and 
why ship over, and why do all these things. So these pitches 
have been consistent. We have some documents in my brief here 
that shows these recruiting pitches again being made in 1991 
and 1992, so this I will say roughly 25 years after the 
military said in the Space A that, ``We are not going to give 
that to you.''
    Mr. Shows. That is right.
    Colonel Day. And so there is no question that these 
recruiting pitches have been made, and there is no question 
that they have been relied on. So that has just been--and I 
have in here I guess roughly another dozen affidavits from 
recruiters who as late as in the 1980's were still making that 
promise.
    One of the problems that I have also in my brief is that 
Judge Vincent never let me get into the discovery of the 
recruiters' material. I never got to depose any of the general 
officers that run the recruiting command, which is a separate 
command, commanded by an Army I believe either two-star or 
three-star, I was not able to get discovery or production on 
that went back before 1956. So that was one of our basic 
problems, and one of the reasons why he was able to find as he 
did, because he did not have the documents to read.
    Mr. Shows. We had a prisoner of war in Vietnam from 
Hattiesburg. Did you ever know Colonel Hall? He was 7\1/2\ 
years----
    Colonel Day. Yes, sir. I know him very well.
    Mr. Shows. He is a good friend.
    Colonel Day. Yes, sir.
    Mr. Shows. I appreciate that testimony. I just do not 
understand how we are having such a hard problem with this 
among our leadership in that when we have the material out 
there, and I cannot understand the judge not letting you use 
the recruiting material in your case. That just does not seem 
right.
    Colonel Rastall. Well, I will also leave this with you. 
This is one of the Army posters from way back, the early 
nineties: ``Superb health care. Health care is provided to you 
and your family members while you are in the Army, and for the 
rest of your life if you serve a minimum of 20 years of active 
Federal service to earn your retirement.''
    Mr. Shows. You know what I cannot figure out, how the 
lawyers got by without getting it if the lawyers were promised 
it.
    Mr. Scarborough. That is a good question. Without objection 
we would like to have copies of that brochure, and Colonel Day, 
and copies of all the information that you have pertaining to 
recruiting brochures that promised health care for life. 
Without objection.
    [The information referred to follows:]

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    Mr. Scarborough. Congressman Shows, any other questions?
    Mr. Shows. No.
    Mr. Scarborough. OK. Thank you.
    Well, I would like to do about 10 more rounds, but 
unfortunately we have to get up to Washington and vote today, 
so if you gentlemen do not mind I will be submitting written 
questions, and if any other panel members have any written 
questions they would like to submit to you we will keep the 
record open for several weeks to get a response to those 
questions.
    But thank you again for coming and testifying, and we 
appreciate your service to the country, and also appreciate 
what you are doing now. Thank you.
    Colonel Day. Thank you.
    [Applause.]
    Mr. Scarborough. All right. We now call our third panel up 
to testify, third and final panel today, and speaking on the 
third panel once again we will have William ``Ed'' Flynn III, 
he is Director of Retirement and Insurance Programs for the 
Office of Personnel Management. He is a frequent witness before 
this subcommittee, and we certainly appreciate his technical 
knowledge of the FEHBP. Thank you, Mr. Flynn, for being with us 
again.
    Our other witness for the third panel is Rear Admiral 
Thomas Carrato. He currently serves as Director of Military 
Health System Operations at TRICARE. He has appeared before 
this subcommittee to discuss the ongoing military FEHBP 
demonstration project, and we certainly appreciate his 
appearance here today also.
    Mr. Flynn.

 STATEMENTS OF WILLIAM ``ED'' FLYNN, DIRECTOR, RETIREMENT AND 
 INSURANCE PROGRAMS, OFFICE OF PERSONNEL MANAGEMENT; AND REAR 
  ADMIRAL THOMAS F. CARRATO, DIRECTOR, MILITARY HEALTH SYSTEM 
            OPERATIONS, TRICARE MANAGEMENT ACTIVITY

    Mr. Flynn. Thank you, Mr. Chairman, and good morning also 
to Mr. Cummings and Mr. Shows.
    I appreciate very much your invitation for me to come and 
testify today, and to provide some information about how the 
Federal Employees Health Benefits Program operates, and our 
views on several bills that are pending in Congress that would 
enable certain members of the military family to enroll in the 
Federal Employees Health Benefits Program.
    As you know, and as has been stated here this morning, the 
Federal Employees Health Benefits Program is the Nation's 
largest employer-sponsored health insurance program. With $18 
billion in annual revenues it covers approximately 9 million 
people, including 2.3 million active Federal employees, 1.9 
million retirees and their eligible family members and 
dependents.
    Each year we prepare a wealth of comparative and other 
information in paper and electronic formats to enable these 
individuals to make informed choices among the almost 300 
health plans that participate in the program. The program 
provides active and retired Federal employees and their 
families access to the same health plan coverage with the same 
government contribution. In general, participants receive a 
government contribution equal to 72 percent of the program's 
weighted average premium, limited to 75 percent of the premium 
for any particular plan that they choose. Individuals who 
enroll in the program then pay the difference out of their own 
pocket.
    By virtually any measure, the Federal Employees Health 
Benefits Program is a resounding success. It has weathered 
evolution in the health care industry remarkably well, though 
it has not been without its challenges, some of which as you 
know we confront today. The program earns high marks from 
observers as a market-oriented program which provides vital 
health care protection at a reasonable price to its members. 
Because of this, many see it as a model for extending health 
care protection to others. We have always attempted to be 
helpful in this regard. If our experience can be used to solve 
health care issues for others, we are eager to assist.
    The program is unique. It is an employer-sponsored program, 
it is an integral part of the compensation package the 
government relies on to successfully compete with other 
employers in attracting and retaining qualified employees to 
perform the vital work of government. As an employer, the 
government must be able to manage its health insurance costs in 
order to remain competitive, and to offer value to the 
government's work force.
    For these reasons, if we were to undertake a direct role in 
expanding health care access for members of the military we 
would want to ensure that the program's strategic value as a 
component of that compensation package is maintained.
    In order to do that, we think several principles are 
important. First, the new population should be considered a 
separate risk pool for purposes of establishing premiums, at 
least until there is enough experience to evaluate whether or 
not they are any differences in the utilization of health care.
    Second, the sponsoring organization for the new population 
must be prepared to conduct enrollment administrative-related 
financial activities in much the same way that Federal 
employing agencies do today.
    Third, proposals for adding any group should include 
authority for OPM to manage the inclusion of new participants 
to ensure adequate access to health plans and the services that 
they offer.
    On the whole, the pending legislative initiatives to allow 
certain military groups to enroll in the Federal Employees 
Health Benefits Program conform to these principles. We have 
reviewed the pending bills to understand their implications for 
the Federal Employees Health Benefits Program, and we are 
working with the Department of Defense to determine the best 
way to meet the needs of that population.
    In that regard let me offer just a few comments on the 
current Department of Defense Federal Employees Health Benefits 
Demonstration Project. As you know, we have just concluded the 
initial open enrollment period. While cooperating closely with 
the Department of Defense on every aspect of implementation, 
all of us are disappointed that only about 2,500 of the 66,000 
eligible individuals chose to participate. We are already 
planning greater outreach efforts and informational efforts for 
the next enrollment period in November.
    There has already been some testimony this morning about 
the various reviews we have underway and things that we can do 
differently and better next November. I think I will just make 
reference to that and answer any questions that you may have.
    As I said, Mr. Chairman, I appreciate very much the 
opportunity to be here this morning, and would be happy to 
answer any questions you may have.
    Mr. Scarborough. Thank you, Ed.
    Admiral Carrato.
    [The prepared statement of Mr. Flynn follows:]

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    Rear Admiral Carrato. Mr. Chairman, Mr. Cummings, Mr Shows, 
good morning.
    I would also like to say I am honored to be in this 
auditorium with Colonel Day and the other great American 
patriots who are here and represented today.
    I appreciate the opportunity to discuss the department's 
progress in implementing TRICARE, and to review the legislation 
pending in the Congress on access to FEHBP for military 
beneficiaries. A particular focus for both the Congress and the 
administration is defining how the Nation will keep its health 
care commitments to military retirees and their families over 
the age of 65.
    TRICARE is the Defense Department's means for execution of 
the military health care mission, to ensure readiness through a 
fit and healthy force that is ready to fight whenever called 
upon, and to provide health care for the military family.
    TRICARE offers a triple-option health benefit that provides 
beneficiaries a choice. TRICARE offers a comprehensive health 
benefit for our beneficiaries for preventive health services. 
For better coordination with our civilian systems, and to lower 
out-of-pocket costs for families we have designed and fully 
implemented a strong, more uniform benefit.
    Because health care is a key quality of life issue for our 
service members and their families, making TRICARE work for our 
beneficiaries is a very high priority for the department. Many 
steps have been taken to make the program less expensive and 
easier for our beneficiaries to use. Recent independent reports 
on TRICARE performance find improved access to care, high 
quality of care, and stable costs for the government and 
beneficiaries.
    While we have taken many actions to improve TRICARE, our 
work is not done. Over the past year senior department and 
service leadership have visited each TRICARE region to identify 
areas in which we can further improve customer service and 
access.
    We have developed an aggressive action plan to further 
improve areas such as access to care and claims processing. We 
are working closely with the joint chiefs of staff and the 
Defense Medical Oversight Committee, which is made up of 
military and civilian leadership, to ensure these improvements 
will make TRICARE more accessible and customer-friendly, 
simpler, and more uniform throughout the country.
    Another focus of the department is enhancing the military 
health benefit. The President's budget for fiscal year 2001 
adds funding for two important expansions of the TRICARE 
benefit that will lower out-of-pocket medical costs for service 
members and their families.
    A number of bills introduced in this session of Congress 
include extension of FEHBP coverage.
    The department views extension of the FEHBP demonstration 
and other demonstrations as an opportunity to collect 
additional information and experience on the feasibility of 
these alternatives. The department is working with OPM to 
select two additional sites for the FEHBP demonstration for 
this fall's open season due to low participation in the initial 
open season for the demonstration.
    The department opposes the provisions extending FEHBP 
coverage to military retirees on a permanent basis, owing to 
their high cost and adverse effects on military readiness. 
These provisions are estimated to cost $5 billion to $9 billion 
annually. The most serious consequences of these provisions 
would arise if the high costs had to be absorbed by the Defense 
Health Program. Space-available care in the military treatment 
facilities would ultimately be reduced by the cost of this new 
entitlement. Consequently, beneficiaries in the lowest priority 
for access to care in military hospitals would see their access 
severely curtailed, if not eliminated. This group would include 
those beneficiaries not enrolled in TRICARE Prime.
    The department is committed to doing all it can to provide 
health care for our retired beneficiaries who have served our 
country with great honor and dignity. As the subcommittee 
members are aware, current statutory authority provides only 
for space-available care in military treatment facilities for 
military retirees who have reached age 65.
    The growing number of military retirees aged 65 and older, 
infrastructure downsizing, and increased TRICARE Prime 
enrollment have resulted in less space-available care for 
military retirees.
    Secretary Cohen and the chairman have expressed their 
strong commitment to expand health care access to our Medicare-
eligible retirees, their spouses and survivors. The department 
is conducting several demonstration programs to test the best 
means to expand health care to our Medicare-eligible retirees.
    As the department conducts these tests of FEHBP, TRICARE 
senior, and other approaches for meeting the needs of our 
senior beneficiaries we always keep in mind the substantial 
sacrifices that these people made in service to their country. 
We also remember their comrades-in-arms who gave the last full 
measure of devotion.
    Thank you.
    [The prepared statement of Rear Admiral Carrato follows:]

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    Mr. Scarborough. Thank you, Admiral, and I appreciate again 
both of you being here today.
    Admiral, I wanted to ask you, first of all it sounded as if 
in your testimony that you stated the Department of Defense's 
position on Congressman Shows' bill would be that it was 
opposed because of the high cost; is that accurate?
    Rear Admiral Carrato. Yes, sir. There are two issues that 
we are concerned about and the views we provided on Mr. Shows' 
bill. The first issue is the impact upon medical readiness. The 
second issue does deal with the cost issue, and certainly the 
potential impact that would have from a financial perspective 
on the defense health plan.
    Mr. Scarborough. Do you agree with the statement that 
Secretary Cohen said on Friday, actually this past Friday, 
where he said how do we tell the people who are coming in that 
we want them to make a commitment when we make a commitment 
that we cannot even keep.
    Some of the retirees are saying to potential recruits, ``Do 
not join because they will not take care of you and your 
family.'' That can have a major impact on recruitment. I mean 
do you agree with Secretary of Defense Cohen that these broken 
promises are starting to catch up with the military in this 
country?
    Rear Admiral Carrato. Yes, sir. I know the Secretary and 
the chairman are both very concerned about quality of life 
issues, and certainly health care is one of the most important 
quality of life issues.
    Mr. Scarborough. Well, is there not a disconnect there, 
though? If the DOD does not step forward--and again I think we 
need to go back to last year's hearing, and I am not one, you 
can ask my children, I am not one to say I told you so, but I 
will tell you, you know, last year we had a little back and 
forth to where you were testifying that the way the program was 
set up we were going to have something like 80 percent 
enrollment. I told you I would be shocked if we even got to 10 
percent enrollment, and now we see that enrollment stands at 
about 4 percent. I was closer on that ``The Price is Right'' 
question than you. I am not questioning your integrity, or your 
word, or your commitment to these military retirees, but I do 
have concerns with the DOD's commitment because they know full 
well that when we were predicting failure last year now they 
have delayed another year, and what does another year mean? It 
means--how many World War II--you may know this answer--how 
many veterans of World War II are dying weekly; 1,000 a week?
    Voice. More.
    Mr. Scarborough. At least 1,000 a week.
    Voice. 1,000 a day.
    Mr. Scarborough. 1,000 a day, so the question is how many 
World War II veterans--you know, we have all these great movies 
about them, whether it is Tom Hanks, or whether it is ``The 
Thin Red Line,'' or whatever they are all called, and everybody 
goes out teary-eyed wondering about what made these young men 
give the ultimate sacrifice, whether it was at Normandy, or 
whether it was at Pearl Harbor, or whatever, and yet every day 
we delay, another 1,000 die.
    And I will tell you what, I am not going to be polite if we 
come back here next year and we have the same situation, and 
that is why I am pressing you on this, that is why there was an 
urgency last year when I said this thing was set up for 
failure, and that somebody in the DOD was sending you out and 
putting you in a very difficult position, because have bought a 
lot of time. Let us face it, if 1,000 die a day, well, great, 
the Federal Government has saved a lot of money on the deaths 
of veterans, World War II veterans where they are not going to 
have to worry about their health care, and I am sure if they 
stall another 5 years or so pretty soon they are going to just 
wait out these men and women, and wait until they die, and 
then, hey, there is not going to be a great crisis.
    I mean I think it is despicable what has happened, I think 
it is despicable that they are doing the slow roll on these men 
and women that gave their all. And I am not preaching there, 
but it is hard for somebody like me to comprehend the existence 
of an Adolph Hitler, or to comprehend being attacked, American 
forces being attacked on American soil, and it is remarkable to 
me that the DOD is not going to step forward.
    This question is about as long as a Chris Matthews 
question, I guess, so the question is this: How can you 
guarantee me, or how can--not you, but how can the DOD 
guarantee me that if you're not going to support Congressman 
Shows' bill to take care of this situation that we are not 
going to be back here a year later with another 365,000 dead 
World War II veterans and with the same situation where we say, 
``Well, let us conduct another study for another 2 or 3 years 
to see if this works or not?'' What can you all do?
    Rear Admiral Carrato. I think there were several questions. 
I will try and touch on the big one first.
    You are correct, the Secretary and the chairman have both 
recognized that a moral obligation has been made to these great 
American patriots, the individuals who fought and won World War 
II and Korea. As the Secretary and the chairman have been 
working with the Congress to address all of the quality of life 
issues, and last year with the tremendous support of Congress, 
the Secretary and the chairman were able to address pay and 
retirement housing; this year they are focusing on health care. 
And in that regard to meet and address the moral commitment the 
Secretary established the Defense Medical Oversight Committee 
which is comprised of the UnderSecretary for Personnel and 
Readiness, the Vice-Chiefs of the services and their 
UnderSecretaries, and they want to look at the TRICARE benefit, 
and what we can provide to the over-65 retirees, and how we 
found it.
    I can also say that one bill, Senate bill 2087 which talks 
about extending the national mail order pharmacy program, the 
department has gone on record as saying that represents a very 
good first step, and you need to start with a very good first 
step, but the bottom line answer is that the department does 
recognize a moral commitment, they have established a very 
senior body comprised of senior military and civilian leaders 
to address this very important policy issue for the department 
and for the country.
    Mr. Scarborough. Is it primarily a money issue? Is the 
opposition--you say it is $5 to $9 billion annually--would the 
DOD be willing to support Shows/Norwood, a bill that we all 
support, if we were able to figure out a way to fund it without 
going into the DOD budget?
    Rear Admiral Carrato. Well, I think funding certainly is an 
issue, and we need to be fiscally prudent in anything that we 
do.
    Mr. Scarborough. Is it a main issue?
    Rear Admiral Carrato. The other issue is readiness.
    Mr. Scarborough. Readiness in what way?
    Rear Admiral Carrato. Readiness--the reason for being, for 
having military health system is to provide support to our 
troops when they go in harm's way, but we also need to make 
sure that we have a fit and healthy force, so we have a 
significant peacetime role to make sure that our force is 
healthy.
    We need to make sure that we have that infrastructure, that 
we have those highly trained physicians, nurses, technicians 
who are able when called to support a contingency, and what we 
learn is that what we do in peacetime, whether it is medical 
logistics, whatever support there is for the wartime mission, 
we need to make sure that what we do in peacetime we can 
translate into wartime, so readiness is a very, very important 
consideration, in addition to funding issues as we consider 
these bills.
    Mr. Scarborough. Would you agree with myself and Secretary 
Cohen and other people that have spoken today that readiness is 
one of our concerns, too, that when we do not keep the promise 
we cannot get the best people to come in and service? You agree 
that is a readiness crisis, too?
    Rear Admiral Carrato. I agree with a lot of the statements 
that were made, but I think you made the statement you can have 
whatever Hollywood producer/director producing recruiting 
commercials, but when your grandfather, your father tells you 
that is probably not a good deal, that is really what impacts 
on recruitment, and it certainly can have some effect on 
retention as well, and that is why the Secretary and the 
chairman are committed to working with the Congress to address 
this issue.
    Mr. Scarborough. I really hope we can keep an open dialog 
and with the urgency of understanding how many American heroes 
die every day, and die going to the grave knowing like my 
grandfather that the country they fought for could not even 
keep their promise to them, and I appreciate you being here 
testifying today. I know you do not deliver a message that 
anybody here wants to hear, but at the same time you are doing 
your job, and I look forward to working with you over the next 
year to make sure that when we hold a hearing again next year, 
and we will regardless of who is in charge, that we will have 
positive news to tell these men and women.
    Congressman Cummings.
    Mr. Cummings. I was just sitting back just listening, and I 
could not help but think about Colonel Day's statement when he 
said that he believed, and a lot of people believe, a lot of 
our retirees believe that our country is just sort of waiting 
for them to die--boy, that is deep--just waiting for them to 
die. [Applause.]
    And I am not here to beat up on anybody, but I think it 
does say something for us where we do not have the balance, and 
Congressman Shows in his statement he was talking about the 
balance, he was talking about civilians, and he was talking 
about military, but there is also a balance I think that we 
have to have between the readiness that you talk about, and 
also talking about the people who made it possible for us to 
even have a system for people to be ready. In some kind of way 
we have got to strike that balance, because right now it seems 
like we are out of balance, and a lot of times in these kind of 
hearings, not necessarily about the military, we talk about 
costs if you do not do certain things. You know, we talk about 
children, we talk about all kinds of costs, and here I guess we 
don't talk about the cost of not providing adequate and timely 
health care because we are talking about older people, so we do 
not say, ``Well, if we do not treat the person who is 67 years 
old, and do not give them what they need in 3 or 4 years it is 
going to cost us more to treat them because the health care 
will cost more, because we are saying they are going to die.''
    I mean that is what it really boils down to. I do not care 
how you look at it, and so it is not a very good commentary 
about the most powerful country in the world.
    And that leads me to ask you, Rear Admiral, about the task 
force. You mentioned a task force----
    Rear Admiral Carrato. The Defense Medical Oversight 
Committee?
    Mr. Cummings. Yes, the one that is trying to come up with 
solutions.
    Rear Admiral Carrato. Yes, sir.
    Mr. Cummings. Do we have any kind of representation from 
the retired community on that?
    Rear Admiral Carrato. No, sir.
    Mr. Cummings. And it would just seem to me, and I do not 
know how that is structured or whatever, but it would just seem 
to me that I would love to have a guy like a Colonel Day or 
somebody sitting there saying ``Hey, hey, what about us?'' And 
I was just wondering, is there a mechanism for that kind of 
thing?
    In other words, if you are trying to come up with 
something, if you have got some kind of mechanism in place to 
try to address these various medical problems with readiness, 
and retirees, and everybody, and you do not have a voice of the 
retired community, even though they may be senior officers on 
it, I just wonder if that is something practical that could be 
done.
    Rear Admiral Carrato. Let me answer your question in a 
couple of ways. First of all, in terms of being able to take 
advantage of individuals like Colonel Day, the member 
organizations of the Military Coalition and Alliance, 
organizations like TROA and others, we meet routinely--and when 
I say we, the office of the Assistant Secretary for Health 
Affairs--we have a recurring dialog. In fact, when enrollment 
was coming in as low as it was on the FEHBP demo, we quickly 
assembled that meeting on an ad hoc basis to get input.
    We also stay in contact with them about improvements they 
would like to see made to the TRICARE program. They are also 
called--in this year's testimony before our oversight hearings 
the authorization committees both had panels where 
representation was provided by the Military Coalition and 
Alliance, so their voice is being heard.
    I think they are also being heard certainly by the 
Secretary and by the chairman, and that is one of the reasons 
that this Defense Medical Oversight Committee was formed. In 
fact, one quote we heard was that medicine is too important for 
just the medics to handle it, and that is why this senior-level 
panel that now recognizes that health care is truly a 
recruitment and retention issue has assembled this senior body.
    Now, while the membership does not allow for people 
currently like the membership organizations, certainly as the 
committee receives briefings from various parties that might be 
an opportunity to--and again I do not want to represent that I 
control that agenda, but I would think that might be one 
possibility to hear those concerns.
    But I think the bottom line is, I think the concerns are 
well known to us. That is why I think as Colonel Day indicated, 
the Secretary, the chairman, that we do have this moral 
obligation, and we do need to find a way to address the issue.
    Mr. Cummings. I just have two more questions, Mr. Chairman.
    Mr. Scarborough. All right.
    Mr. Cummings. Tell us what was the purpose of the 
demonstration projects, and what, if anything, have we learned 
from them?
    Rear Admiral Carrato. We have several demonstration 
programs for the over-65s that are currently ongoing. We also 
have a permanent program which addresses some of the concerns 
that were raised about base realignment and closure. We have a 
prescription drug benefit for the over-65s who were or are 
adversely impacted by base realignment and closures, so that 
addresses a very big void in Medicare coverage, and that is 
prescription drug coverage. That is a permanent program that 
the Congress directed us to implement, and we are serving about 
400,000 Medicare-eligibles through the Brack Pharmacy Program.
    We also have a TRICARE Senior Prime which is a Medicare 
subvention demonstration program, and that is six sites where 
we took six military hospitals, and we went through the 
Medicare Plus Choice qualification process, so we actually have 
qualified six military hospitals as Medicare HMOs, and 
Congressman Shows knows that the only Medicare HMO in the State 
of Mississippi is the one run by Kessler Medical Center. And 
that was to test the subvention program. Could we operate like 
a Medicare HMO, receiving funding from HCFA, and we have about 
30,000 folks enrolled in that program.
    We have two programs that we are just enrolling in now. One 
is another pharmacy demonstration program at two sites, and we 
also have something we call the TRICARE Senior Supplement 
demonstration program, and that is where we are putting in 
place TRICARE as a wraparound supplement to Medicare.
    The other program, and the one I am going to be coming 
before your committee again next week to talk about, is the 
FEHBP demonstration program, and that was a test to see if we 
offered FEHBP to our over-65 population would they enroll.
    I think all these tests are very valid. We are learning 
some valuable information. We do not have the complete 
scientific evaluation yet to learn all the lessons, but we are 
getting some valuable information, and I think it will be 
helpful as we move forward in crafting a long-term solution, a 
long-term policy solution to the over-65 health care issue.
    Mr. Cummings. Just last, but not least, because of what you 
just said, you know, it goes back to when I asked Colonel Day 
and others about this whole question of the demonstrations, and 
you heard their opinion of the demonstrations; right?
    Rear Admiral Carrato. Yes, sir.
    Mr. Cummings. Can you understand why they would say what 
they said that the demonstrations are basically like a sort of 
stalling tactic I guess, and it is waiting for people still to 
die? I mean that is a hell of a statement to come--and I know, 
I mean I see everybody shaking their heads because they agree 
with it, but for us to take that back, I agree with the 
chairman some kind of way we have got to get this message 
through that the very people that all of these demonstration 
programs are supposed to be trying to help and all of that kind 
of thing, they do not have much of an opinion about them at 
all; they just think that it is a bunch of crap. So I mean that 
is--[applause]--and I just think that we have got to some kind 
of way we have got to do something different. I mean it is nice 
to be going in this circle, but it seems like that is about all 
it is, and I would rather--I used to always tell people if you 
are for me you are for me, if you are against me you are 
against me, but at least let me know so I can--I do not want 
people to say that you are doing something for me that you are 
not doing, and I can deal with that, but if you say you are 
doing something and I can clearly see that it is not doing what 
you claim it is doing, then I have a major problem.
    And so with that I just want to thank all of you again, 
everybody who has testified, and being here in Pensacola I must 
say that you are very fortunate to have Mr. Scarborough 
representing you, and I am a Democrat, but we were able to get 
through our committee the long-term care package, which is 
very, very important, and I hope that the people in the 
audience understand that it is meeting like this, this is what 
America is all about right here, people getting together, us 
listening to what you all have to say, and taking that back so 
that hopefully we can make the kind of changes that will make a 
difference in your lives, and I just want to tell you it means 
a lot for me to come down here from Baltimore to see at 9 
o'clock on a Monday morning this number of people out 
interested in what their government is all about, and it also 
shows that you have faith in us that we will do the right 
thing, and that we will hear you. And I thank you.
    [Applause.]
    Mr. Scarborough. Thank you, Congressman Cummings. I 
certainly appreciate you coming down, too, and you are right, 
we have accomplished quite a bit on long-term care, and I know 
we are all standing shoulder to shoulder to make sure that the 
same thing happens here, and I thank you for coming down.
    Also I think it is interesting your talking about this 
committee, it was an interesting question whether they have any 
military retirees on that committee, and of course the answer 
is no, and I always find it interesting that you can always 
tell when somebody is about to leave the White House, because 
whether they are working for Republicans or Democrats you can 
tell they are starting to shop their book deals, and their 
frankness, the closer they get to retirement they get more and 
more blunt.
    I have found the same thing here where men and women that 
are serving in the military, the closer they are to their 
retirement date the more blunt they are about the promise that 
has been broken, so I think that is why it is absolutely 
critical that we have people that are freed of the politics of 
the Pentagon just like the politics of the White House, or just 
like the politics of Congress, and are able to speak their mind 
and be blunt, and hopefully that is something we can work on 
speaking to the Secretary of Defense about having some military 
retirees on this panel.
    Congressman Shows.
    Mr. Shows. Thank you, Mr. Chairman.
    Admiral, I would not want your job sometimes coming to 
these events like this, but I do have some concern about what 
you said, and I have got several questions here, but I am going 
to get to one that just kind of--tell me why this would harm 
military readiness. You know, I would just like to know, and if 
we--and let me put it under this scenario: My point all along 
is I am not asking DOD to take money out of their budget to put 
into this program; I think we ought to put additional moneys in 
to make sure the program is funded. We do not want an unfunded 
mandate, do we?
    Rear Admiral Carrato. No.
    Mr. Shows. And so I have always heard that it has been the 
money, and now I am hearing it could affect military readiness. 
Well, nobody wants to affect military readiness, but if you 
would tell me why.
    Rear Admiral Carrato. OK. With readiness, we operate as you 
know a system of hospitals and clinics staffed by people in 
uniform and civil service folks whose mission and reason for 
being is to support our fighting forces when deployed.
    We also have a peacetime mission which is important for a 
couple of reasons. One is we need to make sure that when our 
forces are deployed that they are fit and healthy to fight. 
Also physicians, nurses, clerks, technicians we need to support 
our fighting force, they need to be able to be in the business 
of patient care. They need to be in the ICUs. We operate 
graduate medical education training programs, we do that in our 
fixed facilities.
    If we were to offer FEHBP enrollment to people, what would 
be the impact upon our fixed assets? We need to optimize, we 
need to make sure that the physicians, the nurses, the 
technicians and corpsmen who are supporting our fighting force 
in the field have adequate training, and again prepare for war. 
We need to perform that mission in peacetime so it carries 
over. So that summarizes the big concern over medical benefits.
    Mr. Shows. Well, the Federal Employees Health Benefits 
Plan, and again I am a new guy, OK, so I do not know all the 
ins and outs of the program and what is going on to some 
extent, but if you had the Federal Employees Health Benefits 
Plan could you not take that to the private hospitals and 
services there? Am I missing something there?
    Rear Admiral Carrato. I guess another way to look at it, 
and our Assistant Secretary oftentimes says TRICARE is the only 
HMO that goes to war, and maybe we are not communicating here, 
so if I have misunderstood your question, but we rely heavily 
on our uniformed providers in our military facilities. In fact, 
a large number of our TRICARE Prime enrollees are enrolled to a 
uniformed provider in the military facility, so we need to 
practice that care.
    If we suddenly started losing patients, if patients started 
going to FEHBP, and I am not sure----
    Mr. Shows. So you are telling me that you are afraid they 
will leave the TRICARE and go to the FEHBP?
    Rear Admiral Carrato. No, I think there is a variety of 
reasons. One is the cost reason, would we have to further 
decrease our infrastructure to pay the FEHBP benefits.
    Mr. Shows. My vision or perspective about this thing, first 
of all I am not for taking money out of the DOD to do it. I 
think we ought to be taking some money and putting it in there 
for it, so I do not see how that--[applause]--and again I am 
not as technical about this as I should be, and with the 
experience, but I am not saying take anything from DOD; I am 
saying adding to it.
    Now, if the problem is that you are afraid we are going to 
start taking some of these patients away and enroll them in 
other care, and that is going to cause your doctors or your 
medical staff not to get the practice that they need, I think 
it is a very, very bad reason, and again I am not saying this 
to get a response out of the crowd, you know, it just gets to 
me that you are afraid we are just not going to have enough 
guys to practice on, and I just--I do not understand that. You 
know, I could see where we could if we are running short of 
patients let some of our doctors go and help them in the 
private sector hospitals, loan them out or something, but I 
just do not see that being a good reason not to be for this 
bill.
    Let me ask you this: Under the pilot program, and Mr. Flynn 
may be able to answer this, some of the talk that we have out 
there is that if you join the pilot program, whether it is true 
or false, you are going to lose the coverage that you have not 
knowing if this program is going to be renewed. Is that 
correct? Admiral, do you need to answer that? I do not know.
    Rear Admiral Carrato. As we have looked at reasons why 
individuals have chosen not to enroll, one of the reasons that 
people have indicated is that it is a demonstration program, 
and do I want to give up what I have already got in the way of 
health care coverage for a demo that may end some 3 years down 
the road.
    There is information, and again it gets a little bit 
complex, but if you were covered as defined by law a Medigap 
program you can get that program back without regard to 
preexisting condition. However, there are some other 
arrangements that people entered into prior to the 
establishment of some of the Medigap programs, and those 
situations really need to be examined on a case-by-case basis, 
so that led to a little bit of confusion, one that could not be 
clarified with a marketing brochure or a simple phone call, it 
really needed sort of a face-to-face.
    Mr. Shows. So you think that could be overcome, 
misunderstanding about that?
    Rear Admiral Carrato. I think so.
    Mr. Shows. And maybe you would have a better test project.
    Rear Admiral Carrato. Right. In fact, the point that Mr. 
Gammarino made in terms of marketing, and I think as I have 
witnessed marketing of health care programs to the military 
community, and it is probably true in other communities, but it 
is really the word of mouth, it is people who are in the 
program saying ``Hey, this is a pretty good deal, you really 
ought to sign up for it,'' and I think that is where we make 
some big gains and we might see some additional enrollment.
    Mr. Shows. One more question. There are not different 
levels for retirees of rank? I mean if you are a military 
retiree, it does not matter if you are an admiral, or a rear 
admiral, you still have the same kind of health care coverage 
as any of these retirees have here?
    Rear Admiral Carrato. Yes, sir.
    Mr. Shows. So there is no difference.
    Rear Admiral Carrato. That is correct.
    Mr. Shows. OK. I did not know that, I just wanted to make 
sure I was right.
    Well, I appreciate your comment, but still it is hard for 
me to think about there are not enough people to practice on if 
we pass this bill, and I just----
    Rear Admiral Carrato. Sir, let me say, and I say that the 
care we provide in military treatment facilities is second to 
none in terms of quality, we provide good care I think as we 
have seen in TRICARE Prime, and in some of the discussions here 
today. I think people want to come to military facilities, so I 
am not so concerned.
    There are some other issues dealing with funding, and I 
would be happy to provide a more detailed response to your 
question for the record if I could, sir.
    Mr. Shows. If you would, and let me say this: All the 
visits my dad had to veterans hospitals--and he is not a 
military retiree, but the staff there worked extremely hard to 
make sure he had the service, and was treated with a lot of 
respect, and I am not saying that about our health care 
facilities. All I am saying is that they are not having the 
moneys to operate on that they should because of the cuts. We 
need more outpatient facilities, and hopefully maybe that is 
coming around, but I do appreciate you coming here, and do 
appreciate your responding to me, and I would appreciate the 
additional information.
    Thank you.
    Rear Admiral Carrato. Thank you, sir.
    Mr. Shows. Thank you, Mr. Chairman.
    Mr. Scarborough. Thank you. And we are going to keep the 
record open for several weeks, because I know we certainly do 
not have the time to ask all the questions we want to ask of 
you all and the other two panels, so we will be submitting some 
questions in writing, and keep the record open for 2 to 3 weeks 
so you can respond.
    Let me just ask in closing, though, Mr. Flynn, I just 
wanted to make sure I understood your testimony correctly that 
OPM believes that H.R. 3573 Mr. Shows' bill, meets OPM's 
criteria for extending FEHBP coverage; is that accurate?
    Mr. Flynn. As I indicated in my testimony, Mr. Chairman, 
the principles as a provider of service, or a provider of this 
program that were important to us seem to be met in that bill 
and in the others that we have looked at, generally speaking.
    Obviously there is a lot that happens from bill to 
implementation, but in the broad sense, yes, sir.
    Mr. Scarborough. Good. Well, it sounds like we have OPM 
willing to come on board if we get this passed, and now all we 
have to do is work the Pentagon.
    So with that, thank you for coming, and Admiral, again I 
appreciate you coming and delivering news that everybody may 
not like to hear, but that is part of the process, part of the 
democratic process. Like I said, this committee will be working 
with you and the rest of the DOD to figure out how we can 
bridge the gap and make sure that the promise is kept.
    And I think it is at least positive that we have the 
Secretary of Defense, and yourself, and the members of the 
Joint Chiefs all saying that the promise has been broken.
    Let me tell you, when we were doing our TRICARE hearings 2 
or 3 years ago, we could not get the DOD to admit to that, and 
so I think we have come a long way in a few years, but we do 
not have a few more years to close the deal, we have to do it 
now.
    So I thank you, and I thank all the audience members for 
coming out and participating in this process, and we will be 
around afterwards if you all have any questions.
    We are adjourned.
    [Applause.]
    [Whereupon, at 11:15 a.m., the subcommittee was adjourned.]

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