On January 6, Secretary of Defense Robert Gates outlined an ambitious plan of cuts and efficiencies to squeeze more than $78 billion in savings from the defense budget over five years.

The proposal included a wide range of changes that would affect all facets of defense spending including civilian and uniformed personnel, command structures, weapons systems, intelligence, and benefits.

As he has done repeatedly in recent months, Gates told reporters that health costs are “eating the Department alive”, in part because working-age retirees who have access to civilian health coverage are foregoing that coverage to use TRICARE.

Gates said the FY2012 defense budget will propose “modest” increases in fees for retirees under 65 and propose adjusting those fees every year at the rate of medical inflation.

MOAA will reserve judgment on what constitutes “modest” increases until we see the numbers. But back in 2007 and 2008, he proposed increasing fees by $1,000 to $2,000 per year, which we think falls well outside the accepted meaning of that term.

Gates also noted that military retirees pay significantly lower fees than federal civilians do for their health care.

MOAA believes any such comparison is bogus if it doesn’t explicitly acknowledge that career military members and families pre-pay far greater premiums for their future health coverage than any civilian ever has or ever will, through decades of arduous service and sacrifice for their country.

In recognition of those extraordinary pre-paid premiums, MOAA believes the percentage growth in military health fees shouldn’t exceed the percentage growth in retired pay.

Among other initiatives, the FY2012 budget will propose:

• Reducing future Army and Marine Corps active duty forces — by 27,000 and 20,000-25,000, respectively, starting in FY2015

• Dramatic reductions in the number of DoD contractors (nearly 800 in TRICARE alone)

• Elimination/downgrade of more than 100 general officer billets and 200 senior civilians

• Cancelation of the Marine Corps expeditionary fighting vehicle

• Consolidation of intelligence and information technology programs

Final details on the budget proposals may not be known until the President formally submits the FY2012 budget to Congress on Feb. 14.