(1) No statutory health care program existed 
for members of the uniformed services who entered 
service prior to December 7, 1956, and retired after 
serving a minimum of 20 years. 
(2) Recruiters, re-enlistment counselors, and of-
ficers at all levels of the uniformed services, and 
other government officials, as agents of the United 
States Government, used recruiting tactics that al-
lowed members who entered the uniformed services 
prior to December 7, 1956, to believe they would be 
entitled to fully paid lifetime health care upon retire-
ment. 
(3) In the United States Court of Appeals for 
the Federal Circuit decision of November 18, 2002, 
in Schism v. United States (No. 99–1402), the 
Court said: ‘‘Accordingly, we must affirm the dis-
trict court’s judgment and can do no more than 
hope Congress will make good on the promises re-
cruiters made in good faith to plaintiffs and others 
of the World War II and Korean War era—from 
1941 to 1956, when Congress enacted its first 
health care insurance act for military members, ex-
cluding older retirees. . . . We cannot readily imag-
ine more sympathetic plaintiffs than the retired offi-
cers of the World War II and Korean War era in-
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volved in this case. They served their country for at 
least 20 years with the understanding that when 
they retired they and their dependents would receive 
full free health care for life. The promise of such 
health care was made in good faith and relied upon. 
Again, however, because no authority existed to 
make such promises in the first place, and because 
Congress has never ratified or acquiesced to this 
promise, we have no alternative but to uphold the 
judgment against the retirees’ breach-of-contract 
claim. . . . Perhaps Congress will consider using its 
legal power to address the moral claims raised by 
[the plaintiffs] on their own behalf, and indirectly 
for other affected retirees.’’. 
(4) Only the United States Congress can make 
good on the promises recruiters made in good faith 
to plaintiffs and others of the World War II and Ko-
rean War era. 
SEC. 3. WAIVER OF MEDICARE PART B PREMIUM FOR CER-
TAIN MILITARY RETIREES. 
(a) IN GENERAL.—Section 1839 of the Social Secu-
rity Act (42 U.S.C. 1395r) is amended— 
(1) in subsection (a)(2), by striking ‘‘The 
monthly premium’’ and inserting ‘‘Except as pro-
vided in subsection (j), the monthly premium’’; and 
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(2) by adding at the end the following new sub-
section: 
‘‘(j)(1) The amount of the monthly premium for an 
eligible individual enrolled under this part is equal to $0. 
‘‘(2) For purposes of paragraph (1), the term ‘eligible 
individual’ means— 
‘‘(A) an individual who is entitled to retired or 
retainer pay based upon service in the uniformed 
services (as defined in section 101 of title 10, United 
States Code) that began before December 7, 1956; 
‘‘(B) the spouse (as determined under section 
7703 of the Internal Revenue Code of 1986) of an 
individual described in subparagraph (A); and 
‘‘(C) the widow or widower, as the case may be, 
of an individual described in subparagraph (A). 
‘‘(3) With respect to years beginning after the date 
of the enactment of this subsection, the monthly premium 
rate calculated under subsection (a)(3) for individuals en-
rolled under this part who are not eligible individuals 
under this subsection shall be determined without regard 
to benefits and administrative costs attributable to such 
eligible individuals during such years.’’. 
(b) CONFORMING AMENDMENT.—Subsection (i) of 
such section is amended by adding at the end the following 
new paragraph: 
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‘‘(7) INAPPLICABILITY
TO
CERTAIN
MILITARY 
RETIREES.—This subsection shall not apply to eligi-
ble individuals (as defined in subsection (j)(2)).’’. 
(c) EFFECTIVE DATE; REBATE MECHANISM.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply to premiums for months be-
ginning more than 45 days after the date of the en-
actment of this Act. 
(2) REBATE
MECHANISM.—The Secretary of 
Health and Human Services shall use the rebate 
methodology 
established 
pursuant 
to 
section 
625(a)(2) of the Medicare Prescription Drug, Im-
provement, and Modernization Act of 2003 (Public 
Law 108–173, 117 Stat. 2318) to provide rebates to 
eligible individuals (as defined in subsection (j)(2) of 
section 1839 of the Social Security Act, as added by 
subsection (a)) of any premium or premium penalty 
paid under such section for months described in 
paragraph (1). 
Æ 
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