While solid, on paper details are still emerging about a Defense Department budget deal announced to group of reporters yesterday, we do know enough about the plan to give you a big picture look at what this means for military families. After all, while our spouses are the ones serving, the vast majority of the benefits these bills fund directly impact us.
This plan, the 2015 National Defense Authorization Act, will fund the DoD for the next year. It’s also packed with all sorts of juicy requests for studies and nitty gritty rules that we will be getting into over the next few weeks. But for now …
Let’s break it down.
Do we get a pay raise?
Yes! But instead of the 1.8 percent we’ve had before, it’ll be the 1 percent we’ve, well, also had before but liked less.
A 1 percent pay raise doesn’t really seem like very much when it comes to the number on your actual month-to-month paycheck and, really, it isn’t. For the typical E3, that’s a raise of about $20 a month. For an 03 with eight years in, that’s a raise of about $56 a month. But hey, I’ll take it.
Will we still be getting BAH?
Yes! But it will eventually cover less of your housing costs.The Pentagon asked Congress to cut BAH rates so that they were designed to only cover 95 percent of troops’ housing costs. Congress didn’t take that step, but they did cut them by one percent.
That means when new rates are calculated, the math the DoD uses to get to their final number will include one percent less coverage.
The Defense Department says none of this will impact those who live in on-base housing. That means you won’t suddenly be required to trot down to housing and shell money out of pocket because, technically, the rate covers only 99 percent of housing.
The original plan was to slow the growth over three years. It sounds like all of the 1 percent cut will happen in 2015.
As always, BAH cuts ONLY impact those who are new to an area or, thanks to a promotion, start receiving a new BAH rate. If you live in an area where the BAH rate drops, you will be grandfathered in and continue to receive the old, higher rate.
It’s impossible for me to speculate on what a 1 percent cut will actually look like on any specific BAH rate in 2015 since all rates almost always go up or down each year fueled by economic changes in each individual BAH area. This will probably mean they go up slightly less, or down slightly more. It could mean more rates go down in 2015 than are going up. We will just have to wait and see.
What’s going on with Tricare?
Prescription drug fees are going to go up by $3 at off-base pharmacies, although when that will kick-in is not yet clear (some have reported it will start in January).
If this is an across the board $3 rate raise, it means generic drugs will be $7 instead of $5, brand name will be $20 instead of 17 and non-formulary will be $47 instead of $44.
We are working on checking out the details on this particular measure.
What is NOT going on with Tricare:
The original request from the Pentagon to Congress included some really epic Tricare changes, such as much larger prescription drug fee hikes and a plan to combine all Tricare plans under one roof called “Tricare Consolidated” with a whole new fee structure that particularly hurt retirees. Congress didn’t accept that.
What about the commissaries?
But Congress totally rejected that plan. Commissary funding remains safe for now.
12/4 UPDATE: Just kidding! When we got the text of the bill it became clear that while they SAID they didn’t cut it, they actually did by $100 million. Here’s all the information on that.
Here’s the real kicker:
Lawmakers’ decision to not make drastic benefits changes as a part of this funding bill are directly to blame on only one thing: the upcoming Military Compensation and Retirement Modernization Committee (MCRMC) report, due in February.
We’ve told about the MCRMC before. These folks have spent quite some time studying current benefits, and they will be presenting to lawmakers their recommendations for cuts.
So instead of making their own decisions, Congress has essentially kicked the cut-can down the road until the experts present their findings in February.
On the one hand, that should make us really happy. Lawmakers aren’t making decisions based on a few measly hearings or the leg work of their staffers. They are letting the real experts have their say.
On the other hand, it should make us feel nervous. Cuts are coming, folks. Just not today.