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House Subcommittee Questions Proposed TRICARE Fee Increases

USM By U.S. Medicine
May 10, 2012

By Sandra Basu

WASHINGTON — Proposed increases to TRICARE fees are drawing fire once again from beneficiary groups and members of Congress.

As part of a strategy to control healthcare costs, the Obama administration has proposed fee increases for TRICARE to be phased in over time, beginning in FY 2013. Among the proposals are raising the TRICARE Prime enrollment fees for retired troops and their families; increasing deductibles for the TRICARE Standard program for retired troops and their families; and increasing pharmacy copayments for generic, brand-name and nonformulary prescriptions in both the retail and mail-order settings. In addition, new enrollment fees for TRICARE Standard and TRICARE for Life  also have been proposed.

“Defense leaders say they will keep faith with the currently serving [servicemembers] on retirement reform, but thousands who retire in the next year will incur these new fees,” Steve Strobridge, co-chair of the Military Coalition and director of government relations at the Military Officers Association of America (MOAA), told the House Armed Services Military Personnel Subcommittee last month. “If keeping faith means no changes for today’s troops on retirement then it’s breaking faith to raise their [healthcare] fees by $2,000. That is no different than a $2,000 retired pay cut.”

Military Personnel Subcommittee Chairman Rep. Joe Wilson (R-SC) also expressed concern about the proposed fee hikes.

Of the estimated cost savings from the TRICARE program, 60% is based on military retirees opting out of the plan or using it less. “Frankly, I think this plan is wrongheaded,” Wilson said.

Raising Fees

Assistant Secretary of Defense for Health Affairs Jonathan Woodson, MD, told the subcommittee that the requirements of the Budget Control Act of 2011 compelled DoD to identify $487 billion in budget reductions over the next 10 years. More than 90% of the cost reductions were external to personnel compensation and benefits, but healthcare was not exempt from this process.


-Source: Military Officers Association of America (MOAA)

“We recognize the concerns of the members of the committee and the beneficiary organizations have voiced regarding these proposals,” he said. “I want to emphasize that these proposals are targeted to mitigate the burden on any one particular group of beneficiaries while simultaneously meeting our congressionally-mandated cost-saving responsibilities under the Budget Control Act.”

Woodson said the proposals keep the TRICARE benefit as “one of the most comprehensive and generous health benefits in our country.”

He also said the “most vulnerable populations” will be exempt from the increases in fees. Medically-retired servicemembers and their families, as well as the families of servicemembers who died on active-duty, would be exempt. In addition, he said the department is proposing to establish cost-sharing tiers, with increases for retirees based on their military retirement pay.

Woodson also told the subcommittee that the proposed changes are not an effort to “try to force people out of TRICARE.”

“In fact, our numbers suggest that, considering the rising premiums in the private sector and considering some of the other issues that affect healthcare, we may have more people taking advantage of their TRICARE benefits,” he said.


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