II 

109TH CONGRESS 

1ST SESSION S. 407

To restore health care coverage to retired members of the uniformed services, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 16, 2005

Mr. JOHNSON introduced the following bill; which was read twice and referred 

to the Committee on Armed Services 

A BILL

To restore health care coverage to retired members of the 

uniformed services, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Keep Our Promise to 

5 America’s Military Retirees Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) No statutory health care program existed 

9 for members of the uniformed services who entered 
2

•S 407 IS 

1 service prior to December 7, 1956, and retired after 

2 serving a minimum of 20 years. 

3 (2) Recruiters, re-enlistment counselors, and of4 ficers at all levels of the uniformed services, and 

5 other government officials, as agents of the United 

6 States Government, used recruiting tactics that al7 lowed members who entered the uniformed services 

8 prior to December 7, 1956, to believe they would be 

9 entitled to fully paid lifetime health care upon retire10 ment. 

11 (3) In the United States Court of Appeals for 

12 the Federal Circuit decision of November 18, 2002, 

13 in Schism v. United States (No. 99–1402), the 

14 Court said: ‘‘Accordingly, we must affirm the dis15 trict court’s judgment and can do no more than 

16 hope Congress will make good on the promises re17 cruiters made in good faith to plaintiffs and others 

18 of the World War II and Korean War era—from 

19 1941 to 1956, when Congress enacted its first 

20 health care insurance act for military members, ex21 cluding older retirees. . . . We cannot readily imag22 ine more sympathetic plaintiffs than the retired offi23 cers of the World War II and Korean War era in24 volved in this case. They served their country for at 

25 least 20 years with the understanding that when 
3

•S 407 IS 

1 they retired they and their dependents would receive 

2 full free health care for life. The promise of such 

3 health care was made in good faith and relied upon. 

4 Again, however, because no authority existed to 

5 make such promises in the first place, and because 

6 Congress has never ratified or acquiesced to this 

7 promise, we have no alternative but to uphold the 

8 judgment against the retirees’ breach-of-contract 

9 claim. . . . Perhaps Congress will consider using its 

10 legal power to address the moral claims raised by 

11 Schism and Reinlie on their own behalf, and indi12 rectly for other affected retirees.’’. 

13 (4) Only the United States Congress can make 

14 good on the promises recruiters made in good faith 

15 to plaintiffs and others of the World War II and Ko16 rean War era. 

17 (5) Statutes enacted in 1956 allowed those who 

18 entered service on or after December 7, 1956, and 

19 retired after serving a minimum of 20 years or by 

20 reason of a service-connected disability to medical 

21 and dental care in any facility of the uniformed serv22 ices, subject to the availability of space and facilities 

23 and the capabilities of the medical and dental staff. 

24 (6) Recruiters, re-enlistment counselors, and of25 ficers at all levels of the uniformed services, and 
4

•S 407 IS 

1 other government officials, as agents of the United 

2 States Government, continued to allow members who 

3 entered the uniformed services to believe they would 

4 be entitled to fully paid lifetime health care upon re5 tirement, despite enactment of statutes in 1956, 

6 subsequent statutes, and the issuance of regulations 

7 that defined and limited the availability of medical 

8 care to retired members of the uniformed services. 

9 (7) After 4 rounds of base closures between 

10 1988 and 1995 and further drawdowns of remaining 

11 military medical treatment facilities, access to 

12 ‘‘space available’’ health care in a military medical 

13 treatment facility is difficult or virtually nonexistent 

14 for many military retirees. 

15 (8) The failure to provide adequate health care 

16 upon retirement is preventing the retired members 

17 of the uniformed services from recommending, with18 out reservation, that young men and women make a 

19 career of any military service. 

20 (9) Although provisions in the Floyd D. Spence 

21 National Defense Authorization Act for Fiscal Year 

22 2001 (as enacted into law by Public Law 106–398) 

23 extended coverage under the TRICARE program to 

24 medicare eligible military retirees age 65 and older, 
5

•S 407 IS 

1 those provisions did not address the health care 

2 needs of military retirees under the age of 65.

3 (10) The United States should make good on 

4 the promises recruiters made in good faith in the 

5 World War II and Korean War era and reestablish 

6 high quality health care for all retired members of 

7 the uniformed services. 

8 SEC. 3. COVERAGE OF MILITARY RETIREES UNDER THE 

9 FEDERAL EMPLOYEES HEALTH BENEFITS 

10 PROGRAM. 

11 (a) COVERAGE FOR RETIREES AND DEPENDENTS.—

12 (1) Section 1108 of title 10, United States Code, is 

13 amended to read as follows: 

14 ‘‘§ 1108. Health care coverage through Federal Em15 ployees Health Benefits program 

16 ‘‘(a) FEHBP OPTION.—The Secretary of Defense, 

17 after consulting with the other administering Secretaries, 

18 shall enter into an agreement with the Office of Personnel 

19 Management to provide coverage to eligible beneficiaries 

20 described in subsection (b) under the health benefits plans 

21 offered through the Federal Employees Health Benefits 

22 program under chapter 89 of title 5. 

23 ‘‘(b) ELIGIBLE BENEFICIARIES; COVERAGE.—(1) An 

24 eligible beneficiary under this subsection is—
6

•S 407 IS 

1 ‘‘(A) a member or former member of the uni2 formed services described in section 1074(b) of this 

3 title; 

4 ‘‘(B) an individual who is an unremarried 

5 former spouse of a member or former member de6 scribed in section 1072(2)(F) or 1072(2)(G); 

7 ‘‘(C) an individual who is—

8 ‘‘(i) a dependent of a deceased member or 

9 former member described in section 1076(b) or 

10 1076(a)(2)(B) of this title or of a member who 

11 died while on active duty for a period of more 

12 than 30 days; and 

13 ‘‘(ii) a member of family as defined in sec14 tion 8901(5) of title 5; or 

15 ‘‘(D) an individual who is—

16 ‘‘(i) a dependent of a living member or 

17 former member described in section 1076(b)(1) 

18 of this title; and 

19 ‘‘(ii) a member of family as defined in sec20 tion 8901(5) of title 5. 

21 ‘‘(2) Eligible beneficiaries may enroll in a Federal 

22 Employees Health Benefit plan under chapter 89 of title 

23 5 under this section for self-only coverage or for self and 

24 family coverage which includes any dependent of the mem-
7

•S 407 IS 

1 ber or former member who is a family member for pur2 poses of such chapter. 

3 ‘‘(3) A person eligible for coverage under this sub4 section shall not be required to satisfy any eligibility cri5 teria specified in chapter 89 of title 5 (except as provided 

6 in paragraph (1)(C) or (1)(D)) as a condition for enroll7 ment in health benefits plans offered through the Federal 

8 Employees Health Benefits program under this section. 

9 ‘‘(4) For purposes of determining whether an indi10 vidual is a member of family under paragraph (5) of sec11 tion 8901 of title 5 for purposes of paragraph (1)(C) or 

12 (1)(D), a member or former member described in section 

13 1076(b) or 1076(a)(2)(B) of this title shall be deemed to 

14 be an employee under such section. 

15 ‘‘(5) An eligible beneficiary who enrolls in the Federal 

16 Employees Health Benefits program under this section 

17 shall not be eligible to receive health care under section 

18 1086 or section 1097. Such a beneficiary may continue 

19 to receive health care in a military medical treatment facil20 ity, in which case the treatment facility shall be reim21 bursed by the Federal Employees Health Benefits pro22 gram for health care services or drugs received by the ben23 eficiary. 

24 ‘‘(c) CHANGE OF HEALTH BENEFITS PLAN.—An eli25 gible beneficiary enrolled in a Federal Employees Health 
8

•S 407 IS 

1 Benefits plan under this section may change health bene2 fits plans and coverage in the same manner as any other 

3 Federal Employees Health Benefits program beneficiary 

4 may change such plans. 

5 ‘‘(d) GOVERNMENT CONTRIBUTIONS.—The amount 

6 of the Government contribution for an eligible beneficiary 

7 who enrolls in a health benefits plan under chapter 89 of 

8 title 5 in accordance with this section may not exceed the 

9 amount of the Government contribution which would be 

10 payable if the electing beneficiary were an employee (as 

11 defined for purposes of such chapter) enrolled in the same 

12 health benefits plan and level of benefits. 

13 ‘‘(e) SEPARATE RISK POOLS.—The Director of the 

14 Office of Personnel Management shall require health bene15 fits plans under chapter 89 of title 5 to maintain a sepa16 rate risk pool for purposes of establishing premium rates 

17 for eligible beneficiaries who enroll in such a plan in ac18 cordance with this section. 

19 ‘‘(f) REIMBURSEMENT FOR EXPENSES FOR HEALTH

20 CARE SERVICES NORMALLY PROVIDED BY THE DEPART21 MENT OF DEFENSE UNDER TRICARE STANDARD.—The 

22 Secretary of Defense shall develop and implement a sys23 tem to reimburse an eligible beneficiary who enrolls in a 

24 health benefits plan under chapter 89 of title 5 in accord25 ance with this section for health care costs incurred by 
9

•S 407 IS 

1 the beneficiary that are not paid under the health benefits 

2 plan but would have been paid by the Department of De3 fense under TRICARE Standard.’’.

4 (2) The item relating to section 1108 at the begin5 ning of such chapter is amended to read as follows:

‘‘1108. Health care coverage through Federal Employees Health Benefits program.’’.

6 (b) EFFECTIVE DATE.—The amendments made by 

7 this section shall take effect on October 1, 2005. 

8 SEC. 4. REIMBURSEMENT FOR TRICARE PHARMACY BENE9 FITS AT TRICARE NETWORK PHARMACY LEV10 ELS TO CERTAIN MILITARY RETIREES AND 

11 DEPENDENTS IN HARDSHIP CASES. 

12 (a) IN GENERAL.—In the case of an eligible person 

13 who has a certification described in subsection (b), the 

14 Secretary shall reimburse such person for pharmacy bene15 fits received from a pharmacy that is not a TRICARE 

16 network pharmacy in the same manner and in the same 

17 amounts as the Secretary would reimburse such person 

18 for such benefits received from pharmacy that is a 

19 TRICARE network pharmacy. 

20 (b) CERTIFICATION.—The certification referred to in 

21 subsection (a) is a certification from an eligible person’s 

22 physician—
10

•S 407 IS 

1 (1) stating that the person does not have access 

2 to a TRICARE network pharmacy due to physical or 

3 medical constraints; and 

4 (2) meeting such other criteria as the Secretary 

5 of Defense considers appropriate. 

6 (c) ELIGIBLE PERSON.—In this section, an eligible 

7 person is an eligible beneficiary as described in section 

8 1108(b) of title 10, United States Code who has another 

9 insurance plan or program that provides primary coverage 

10 for health benefits. 

11 SEC. 5. WAIVER OF MEDICARE PART B PREMIUM FOR CER12 TAIN MILITARY RETIREES. 

13 (a) IN GENERAL.—Section 1839 of the Social Secu14 rity Act (42 U.S.C. 1395r) is amended—

15 (1) in subsection (a)(2), by striking ‘‘The 

16 monthly premium’’ and inserting ‘‘Except as pro17 vided in subsection (j), the monthly premium’’; and 

18 (2) by adding at the end the following new sub19 section: 

20 ‘‘(j)(1) The amount of the monthly premium for an 

21 eligible individual enrolled under this part is equal to $0. 

22 ‘‘(2) For purposes of paragraph (1), the term ‘eligible 

23 individual’ means—

24 ‘‘(A) an individual who is entitled to retired or 

25 retainer pay based upon service in the uniformed 
11

•S 407 IS 

1 services (as defined in section 101 of title 10, United 

2 States Code) that began before December 7, 1956; 

3 ‘‘(B) the spouse (as determined under section 

4 7703 of the Internal Revenue Code of 1986) of an 

5 individual described in subparagraph (A); and 

6 ‘‘(C) the widow or widower, as the case may be, 

7 of an individual described in subparagraph (A). 

8 ‘‘(3) With respect to years beginning after the date 

9 of the enactment of this subsection, the monthly premium 

10 rate calculated under subsection (a)(3) for individuals en11 rolled under this part who are not eligible individuals 

12 under this subsection shall be determined without regard 

13 to benefits and administrative costs attributable to such 

14 eligible individuals during such years.’’. 

15 (b) CONFORMING AMENDMENT.—Section 1839(i) of 

16 the Social Security Act (42 U.S.C. 1395r(i)) is amended 

17 by adding at the end the following new paragraph: 

18 ‘‘(7) INAPPLICABILITY TO CERTAIN MILITARY

19 RETIREES.—This subsection shall not apply to eligi20 ble individuals (as defined in subsection (j)(2)).’’. 

21 (c) EFFECTIVE DATE.—(1) The amendments made 

22 by this section shall apply to premiums for months begin23 ning with January 2005. 

24 (2) The Secretary of Health and Human Services 

25 shall use the rebate methodology established pursuant to 
12

•S 407 IS 

1 section 625(a)(2) of the Medicare Prescription Drug, Im2 provement, and Modernization Act of 2003 (Public Law 

3 108–173, 117 Stat. 2318) to provide rebates to eligible 

4 individuals (as defined in subsection (j)(2) of section 1839 

5 of the Social Security Act, as added by subsection (a)) 

6 of any premium or premium penalty paid under such sec7 tion for months beginning on or after January 1, 2005.

Æ