WEBVTT

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This file was generated by Descript 

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Edward: Welcome to the MIL News
Weekly for 28 December 2025 to 3

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January 2026, your essential guide
to the latest news impacting the

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military and veteran community.

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Whether you're currently serving in
uniform, a military retiree, a veteran,

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or a family member, this is your source
for the critical updates you need to know.

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Each week, we cut through the noise to
bring you the most important developments

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from the Pentagon, Capitol Hill, and
the Department of Veterans Affairs.

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We’ll cover everything from new
policies and pay raises affecting

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active and reserve forces, to changes
in healthcare and benefits for

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retirees, and the latest on VA services
and legislation for our veterans.

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Let's get you informed.

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Here’s what’s happened this past week.

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Issues That Affect Active and
Reserve Military Personnel

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Fiscal Year 2026 Pay and
Benefits Implementation

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For the majority of active duty
and reserve personnel, the most

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immediate impact of the new year
was the implementation of the

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compensation adjustments authorized
by the National Defense Authorization

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Act (NDAA) for Fiscal Year 2026.

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3.8

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Percent Increase in Basic Pay

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Effective January 1, 2026, all members
of the uniformed services received a 3.8

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percent increase in Basic Pay.

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This raise is statutorily
linked to the Employment Cost

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Index (ECI), which measures the
growth of private-sector wages.

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By matching the ECI, Congress aims
to ensure that military compensation

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remains competitive with the civilian
labor market, a critical factor

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for recruitment and retention.

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The increase applies across
all ranks and components.

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For a junior enlisted soldier (E-4)
with less than two years of service,

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this translates to a tangible
increase in monthly disposable income.

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For senior officers, the raise
is substantial, though pay caps

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remain in effect for the highest
grades to maintain parity with

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Executive Schedule Level II caps.

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Basic Allowance for Housing (BAH)

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The Department of Defense also
released the 2026 Basic Allowance

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for Housing (BAH) rates, which
took effect on January 1, 2026.

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On average, BAH rates increased by 4.2

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percent nationwide.

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This allowance is designed to
cover 95 percent of housing costs,

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including rent and utilities, for
service members living off-base.

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The 4.2

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percent average masks
significant local variations.

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High-cost coastal areas saw larger
increases to keep pace with rental

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markets, while some interior
markets saw more modest adjustments.

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Importantly, the DoD continues to
apply Individual Rate Protection.

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This policy ensures that if the BAH rate
for a specific location decreases, service

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members already residing in that location
will retain their previous, higher rate.

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They will not see a reduction in their
allowance as long as they maintain their

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eligibility status at that duty station.

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Basic Allowance for Subsistence (BAS)

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The Basic Allowance for Subsistence (BAS),
which offsets the cost of meals, was

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also adjusted effective January 1, 2026.

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Unlike Basic Pay, BAS is indexed to the
cost of food as measured by the U.S.

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Department of Agriculture (USDA).

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For enlisted members, the monthly
rate has increased to $476.95.

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Officers will receive a
monthly rate of $328.48.

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Additionally, a specialized rate known
as BAS II, available to enlisted members

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assigned to government quarters that
lack adequate food storage or preparation

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facilities, has been set at $953.90

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per month.

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Civilian Pay Disparity

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A significant point of friction
in the federal workforce is the

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disparity between the military
and civilian pay raises for 2026.

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While uniformed personnel received a 3.8

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percent increase, President Trump signed
an Executive Order on December 18, 2025,

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authorizing a pay increase of only 1.0

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percent for General Schedule
(GS) civilian employees.

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Furthermore, this order did
not include any increase in

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locality pay, meaning the 1.0

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percent adjustment was the total
increase for the civilian workforce.

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This effectively results in a real-wage
cut for many civilian DoD employees

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when adjusted for inflation, potentially
complicating the DoD's ability to

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retain the civilian experts who support
active duty operations in fields like

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logistics, engineering, and intelligence.

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Legislative Actions Affecting
Active Duty Personnel

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During this period, the
legislative framework governing

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the military was finalized.

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The following bills are
of primary relevance:

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Bill: S.

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1071 / S.

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2296 - National Defense Authorization
Act for Fiscal Year 2026

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Signed into Law (Public Law
119-60) on December 18, 2025.

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This is the primary authorization
bill for the Department of Defense.

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It establishes the end-strength of
the armed forces, authorizes the 3.8%

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pay raise, and sets policy for
military procurement and operations.

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It includes provisions for the
modernization of the nuclear triad and

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authorizes funding for the platforms
used in Operation Absolute Resolve.

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Bill: H.R.

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5371 - Continuing Appropriations
and Extensions Act, 2026

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Signed into Law on November 12, 2025.

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While enacted prior to the
reporting week, this legislation

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remains the active funding vehicle
for the federal government.

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It ensures that military operations,
including the deployment to Venezuela,

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continue to be funded in the absence of
a full-year Defense Appropriations Act.

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It prevents a government shutdown
and ensures paychecks continue

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to flow to active duty troops.

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Issues That Affect
Retired Military Personnel

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Cost-of-Living Adjustment (COLA) for 2026

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Retirees received their first adjusted
annuity payments in January 2026.

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These adjustments are determined
by the Consumer Price Index for

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Urban Wage Earners and Clerical
Workers (CPI-W), which measures

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inflation in the broader economy.

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CSRS and Military Retirees

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Retirees under the Civil Service
Retirement System (CSRS) and

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military retirees received a 2.8

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percent COLA effective December 1, 2025,
payable in the January 2026 checks.

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This increase is intended to protect the
purchasing power of the pension against

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the rising costs of goods and services.

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For a retiree with a monthly pension of
$3,000, this adjustment results in an

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increase of approximately $84 per month.

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FERS Retirees: The "Diet COLA"

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Retirees under the Federal Employees
Retirement System (FERS) received

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a smaller adjustment of 2.0

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percent.

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This discrepancy is due to the
statutory formula governing FERS COLAs.

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Under the law, if the CPI-W
increase falls between 2.0

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percent and 3.0

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percent, the FERS COLA is capped at 2.0

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percent.

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This mechanism, often derided as the
"diet COLA," means that FERS retirees

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effectively lose purchasing power in
years like 2026 where inflation (2.8%)

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exceeds their adjustment (2.0%).

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TRICARE 2026: Rising Healthcare Costs

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Perhaps the most significant financial
headwind for retirees in 2026 is

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the steep increase in TRICARE costs.

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The Department of Defense implemented
a new fee schedule effective January

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1, 2026, which differentiates
beneficiaries based on when their

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sponsor entered the service.

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Group A consists of sponsors who
entered service before January 1,

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2018, while Group B includes those
who entered on or after that date.

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Annual Enrollment Fees

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Enrollment fees, effectively the
premiums for TRICARE coverage,

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have risen for the new year.

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For TRICARE Prime, Group A retirees
now pay an individual fee of $381.96

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and a family fee of $765.00.

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For Group B retirees, these Prime
fees are higher, set at $462.96

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for individuals and $927.00

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for families.

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The cost disparity is even more
pronounced for TRICARE Select.

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Group A retirees pay $186.96

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for individual coverage and $375.00

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for family coverage.

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In stark contrast, Group B
retirees face fees of $594.96

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for individuals and $1,191.00

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for families, meaning Group B families
pay more than three times the enrollment

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fee of their Group A counterparts.

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Deductibles and Catastrophic Caps

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In addition to enrollment fees, retirees
face higher out-of-pocket costs for care.

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For TRICARE Select, Group A retirees
have an annual family deductible of

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$300, whereas Group B families face
a network deductible of $397 and

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a non-network deductible of $794.

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The Catastrophic Cap—the maximum
amount a family pays out-of-pocket

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for covered services in a calendar
year—has also been adjusted.

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For a Group A retiree family on
TRICARE Select, the catastrophic

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cap has risen to $4,381.

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For Group B families,
the cap is set at $4,635.

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This means that despite the 2.8

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percent COLA, a retiree with significant
medical needs could see a large portion

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of their pension increase consumed
by these higher liability limits.

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Pharmacy Copayment Increases

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Beginning January 1, 2026,
pharmacy copayments have also

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increased for beneficiaries who
fill prescriptions at retail

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pharmacies or through home delivery.

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The cost for a 30-day supply of
brand-name formulary drugs at a retail

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network pharmacy has risen to $48,
up from $43 in the previous year.

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Generic drugs at retail
pharmacies remain at $16.

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For those using the home delivery
service, the copayment for a 90-day

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supply of generic drugs has increased
from $13 to $14, while brand-name

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drugs now cost $44, up from $38.

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Non-formulary drugs have seen
the steepest hike, rising to $85.

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Federal Employees Health
Benefits (FEHB) Increases

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For military retirees who transitioned
to the federal civil service

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and carry FEHB insurance, the
situation is even more challenging.

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The Office of Personnel Management (OPM)
announced that the enrollee share of FEHB

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premiums increased by an average of 12.3

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percent for the 2026 plan year.

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This double-digit premium hike far
exceeds both the military COLA (2.8%)

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and the civilian pay raise (1.0%).

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For many retired federal employees,
this represents a significant net

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reduction in disposable income.

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The OPM attributed these sharp
increases to the rising cost of

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prescription drugs and the aging
demographic of the covered population.

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Legislative Context for Retirees

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The protection of retiree benefits
remains a core function of the NDAA.

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While the FY 2026 NDAA did not
introduce radical new benefits for

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retirees, it maintained the essential
structure of the COLA and rejected

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proposals that would have further
eroded the value of the benefit.

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Bill: S.

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1071 - National Defense Authorization
Act for Fiscal Year 2026

00:10:47.325 --> 00:10:52.295
Signed into Law (Public Law
119-60) on December 18, 2025.

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The law authorizes the continued
funding of the Defense Health Agency

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(DHA), which oversees TRICARE.

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It mandates reports on the efficiency
of the disability evaluation system

00:11:02.666 --> 00:11:06.466
and ensures the continuity of
the Survivor Benefit Plan (SBP).

00:11:07.266 --> 00:11:11.366
Importantly, it did not include any
legislation to decouple military retiree

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COLAs from the CPI-W, preserving the
current inflation-protection mechanism.

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Issues That Affect Veterans Affairs

00:11:18.205 --> 00:11:20.705
2026 VA Disability Compensation Rates

00:11:21.054 --> 00:11:27.634
Effective December 1, 2025, with payments
beginning January 1, 2026, VA disability

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compensation rates were increased by 2.8

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percent.

00:11:31.464 --> 00:11:35.404
This Cost-of-Living Adjustment ensures
that the tax-free compensation provided

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to veterans for service-connected
injuries keeps pace with inflation.

00:11:38.950 --> 00:11:41.030
Basic Rates for Veterans
with No Dependents

00:11:41.431 --> 00:11:44.641
For a veteran with no spouse,
children, or dependent parents, the

00:11:44.641 --> 00:11:47.951
monthly compensation scales with
the severity of the disability.

00:11:48.371 --> 00:11:53.391
A 10% disability rating now yields
a monthly payment of $176.36.

00:11:53.761 --> 00:11:58.941
As the rating increases, so does the
compensation: a 20% rating pays $348.66,

00:11:59.191 --> 00:12:00.731
30% pays $552.47,

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and 40% pays $795.84.

00:12:03.601 --> 00:12:06.381
At the 50% level, the
payment is $1,132.90,

00:12:06.581 --> 00:12:07.111
rising to $1,435.02

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for 60% and $1,808.45

00:12:09.681 --> 00:12:10.691
for 70%.

00:12:11.171 --> 00:12:12.601
The highest tiers provide $2,102.14

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for an 80% rating, $2,362.30

00:12:15.151 --> 00:12:18.111
for 90%, and finally, $3,938.58

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for a 100% disability rating.

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Rates for Veterans with Dependents

00:12:21.923 --> 00:12:26.453
Veterans with a disability rating of 30%
or higher are eligible for additional

00:12:26.453 --> 00:12:28.563
compensation if they have dependents.

00:12:29.043 --> 00:12:33.273
For a veteran with a spouse and one
child—a common family configuration—the

00:12:33.683 --> 00:12:36.263
monthly payments are significantly higher.

00:12:36.743 --> 00:12:41.613
A 30% rating for this family
structure pays $666.47.

00:12:42.243 --> 00:12:46.823
At 60%, the payment
increases to $1,663.02.

00:12:47.413 --> 00:12:52.373
For the most severe cases, a
90% rating yields $2,703.70,

00:12:52.663 --> 00:12:56.443
and a 100% rating provides $4,318.99

00:12:56.443 --> 00:12:56.913
per month.

00:12:57.334 --> 00:13:01.024
For veterans with severe disabilities
requiring aid and attendance, or

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those with additional children,
the rates scale even higher.

00:13:04.414 --> 00:13:08.824
For example, the Special Monthly
Compensation (SMC-L) rate for a

00:13:08.824 --> 00:13:14.734
veteran with a spouse (no other
dependents) is now $5,120.42

00:13:14.814 --> 00:13:15.204
per month.

00:13:15.678 --> 00:13:17.928
The Veterans Health
Administration Reorganization

00:13:18.295 --> 00:13:23.085
On December 15, 2025, the VA announced a
sweeping reorganization of the Veterans

00:13:23.085 --> 00:13:27.685
Health Administration (VHA), with
implementation commencing in early 2026.

00:13:28.375 --> 00:13:31.725
This initiative represents the most
significant restructuring of the

00:13:31.725 --> 00:13:34.125
VA healthcare system since 1995.

00:13:34.616 --> 00:13:37.836
The core of this reorganization is
the consolidation of the Veterans

00:13:37.836 --> 00:13:40.006
Integrated Service Networks (VISNs).

00:13:40.636 --> 00:13:44.326
The VA plans to reduce the
number of VISNs from 18 to 5.

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These new, larger regional
networks will report directly to

00:13:48.356 --> 00:13:49.766
the Under Secretary for Health.

00:13:50.189 --> 00:13:52.109
Strategic Goals of the Reorganization:

00:13:52.428 --> 00:13:56.618
Eliminate Bureaucracy: By removing
layers of middle management, the VA aims

00:13:56.618 --> 00:13:58.688
to speed up decision-making processes.

00:13:59.168 --> 00:14:02.448
VA Secretary Doug Collins stated
that the current structure is

00:14:02.448 --> 00:14:05.658
"riddled with redundancies"
that confuse lines of authority.

00:14:05.979 --> 00:14:10.849
Empower Local Leaders: The plan intends
to give more autonomy to the directors

00:14:10.849 --> 00:14:15.829
of the 170+ VA Medical Centers, allowing
them to respond more agilely to the needs

00:14:15.829 --> 00:14:17.829
of their specific veteran populations.

00:14:18.163 --> 00:14:22.143
Standardization: The consolidation
aims to ensure that VA policies are

00:14:22.143 --> 00:14:25.933
applied consistently across the country,
eliminating the "postcode lottery"

00:14:25.933 --> 00:14:27.833
where care quality varies by region.

00:14:28.237 --> 00:14:31.777
While the VA assures that patient
care will not be disrupted,

00:14:31.997 --> 00:14:35.727
such a massive administrative
upheaval carries inherent risks.

00:14:36.137 --> 00:14:39.487
The transition is expected
to take 18 to 24 months.

00:14:39.987 --> 00:14:44.027
Veteran Service Organizations (VSOs)
will be monitoring the process

00:14:44.027 --> 00:14:47.717
closely to ensure that the reduction
in regional oversight does not

00:14:47.717 --> 00:14:51.407
lead to a decline in accountability
or support for local facilities.

00:14:51.742 --> 00:14:54.012
Community Care Network (CCN) Overhaul

00:14:54.363 --> 00:14:57.473
Concurrent with the internal
reorganization, the VA has launched

00:14:57.473 --> 00:15:01.513
a major initiative to restructure
its Community Care Network (CCN).

00:15:02.063 --> 00:15:05.483
With approximately 40% of VA
care now delivered by private

00:15:05.483 --> 00:15:09.083
providers, the contracts governing
these relationships are critical.

00:15:09.456 --> 00:15:13.246
The VA released a Request for
Proposals (RFP) to replace the current

00:15:13.246 --> 00:15:17.596
third-party administrator contracts,
many of which expire in 2026.

00:15:17.976 --> 00:15:20.896
The new strategy employs an
"indefinite delivery/indefinite

00:15:20.896 --> 00:15:23.246
quantity" (IDIQ) contract model.

00:15:23.556 --> 00:15:27.066
This approach allows multiple health
plans to compete to serve veterans in

00:15:27.066 --> 00:15:30.626
the same region, rather than awarding
a monopoly to a single contractor

00:15:30.626 --> 00:15:32.356
for a massive geographic area.

00:15:32.816 --> 00:15:37.106
The goal is to drive competition,
improve the quality of the provider

00:15:37.106 --> 00:15:40.576
network, and give veterans more
choice in how they access care.

00:15:40.902 --> 00:15:42.722
Legislative Actions Affecting Veterans

00:15:43.055 --> 00:15:46.755
Several key pieces of legislation
were signed into law or implemented

00:15:46.755 --> 00:15:50.415
during this period, addressing specific
gaps in veteran support systems.

00:15:50.671 --> 00:15:51.611
Bill: H.R.

00:15:51.611 --> 00:15:56.611
983 - Montgomery GI Bill Selected
Reserves Tuition Fairness Act of 2025

00:15:57.126 --> 00:16:02.256
Status: Signed into Law (Public
Law 119-55) on December 12, 2025.

00:16:02.722 --> 00:16:06.002
This law addresses a long-standing
inequity for Reservists.

00:16:06.332 --> 00:16:10.942
It mandates that public colleges and
universities must charge in-state tuition

00:16:10.942 --> 00:16:15.202
rates to veterans using the Montgomery
GI Bill-Selected Reserve (MGIB-SR),

00:16:15.632 --> 00:16:17.592
regardless of their residency status.

00:16:18.342 --> 00:16:22.262
Previously, many reservists were forced
to pay out-of-pocket for the difference

00:16:22.262 --> 00:16:24.362
between in-state and out-of-state rates.

00:16:24.872 --> 00:16:27.952
Schools that fail to comply
risk losing their eligibility

00:16:27.952 --> 00:16:29.902
to receive VA education funds.

00:16:30.402 --> 00:16:35.422
This protection applies to academic terms
beginning on or after August 1, 2026.

00:16:35.903 --> 00:16:36.893
Bill: H.R.

00:16:36.923 --> 00:16:39.913
1815 - VA Home Loan Program Reform Act

00:16:40.222 --> 00:16:44.862
Status: Signed into Law (Public
Law 119-31) in July 2025.

00:16:45.268 --> 00:16:48.618
Implementation of this law is
ongoing and critical for veteran

00:16:48.618 --> 00:16:50.498
homeowners facing financial hardship.

00:16:50.938 --> 00:16:54.388
It establishes a "partial claim"
program for VA Home Loans.

00:16:54.838 --> 00:16:58.488
This mechanism allows veterans who have
missed mortgage payments to defer the owed

00:16:58.488 --> 00:17:02.408
amount to the end of their loan term (as
a non-interest-bearing subordinate lien)

00:17:02.668 --> 00:17:04.918
rather than facing immediate foreclosure.

00:17:05.348 --> 00:17:09.998
This aligns VA protections with those
available to FHA borrowers and provides

00:17:10.048 --> 00:17:14.428
a vital safety net for approximately
70,000 veterans currently in default.

00:17:14.824 --> 00:17:16.814
And that's your Weekly Briefing.

00:17:17.314 --> 00:17:20.984
Staying on top of these changes
is key to navigating your career,

00:17:21.124 --> 00:17:23.214
your retirement, and your benefits.

00:17:23.574 --> 00:17:24.514
Thank you for tuning in.

00:17:24.954 --> 00:17:28.784
Be sure to subscribe wherever you get your
podcasts, so you never miss an update.

00:17:29.164 --> 00:17:32.604
We’ll be back next week with another
roundup of the news that matters most

00:17:32.604 --> 00:17:34.444
to the military and veteran community.