DoD considers hiking some Tricare payments

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While the Department of Defense spins it as “sustaining the benefit,” veterans groups claim that proposed increases to Tricare fees for retired military and their families are too expensive.

Under the proposal – which already seems doomed in both the House and the Senate – Tricare enrollment fees would increase by 115 percent for military retirees younger than 65. The increase is the first since the military introduced the Tricare system in 1995.

“The reason we’re doing it is to sustain a great benefit,” said Dr. Steven Jones, principal deputy assistant secretary of defense for health affairs. “Our main mission over the long run is to provide the best quality, most affordable health care – asking people to contribute more to maintain that. We’re meeting a strong headwind in Congress, so far.”

Congress has requested a Government Accounting Office review of the Tricare system, to see if the increases are needed. The report is expected by April 2007.

The increases, which would provide $11.2 billion in savings for the Defense Department, range from $6 a month for lower enlisted retired soldiers and $13 a month for senior enlisted veterans to $24 a month for retired officers.

“We’re talking with Congress to put an alternative proposal out there, that would result in $8 billion in savings, phase it in over a four year period, instead of a two year period,” said Jones, who is the second ranking member of the DoD’s health care division. “We’re only doing this for retirees under 65, our focus is on them because about 82 percent of them continue to work and have access to other health insurance. It’s one of the largest areas of Tricare costs.”

Veterans groups are rallying to oppose the legislation. The Association of the United States Army (AUSA) is lobbying Congress to prevent the proposal from going further, said Gordon Hamilton, president of the Pikes Peak chapter.

“AUSA is not enthusiastic about the proposal, whatsoever,” he said. “We’re getting the word out to our members to contact their congressmen to stop the proposal.”

AUSA is a nonprofit organization that supports active duty, National Guard, Army Reservists and retirees. The association provides a lobbying voice for soldiers, Hamilton said.

“We are normally a pretty quiet bunch,” he said. “But I think you can see the result of telling Congress that 100,000 of your voters are not happy with this legislation.”

Hamilton said the group’s success was evident in the DoD’s authorization act, legislation that sets the defense department’s budget for the upcoming year.

“It came out in the first cut of the act,” he said. “There will be no increases in co-pays or enrollment fees for Tricare until, at a minimum, 2007, when it’s been thoroughly studied and approved by Congress.”

The suggested legislation is being considered by Congress, but Jones said he believes it will not make it out of the House of Representatives.

“We’ve met a lot of resistance in the House,” he said. “The Senate looks like possibly we could compromise on, but it doesn’t look like anything will get passed until after the GAO report.”

Jones said the increases are because health care costs continue to rise. In 1990, health care was 4 percent of the DoD budget. It’s expected to increase to 12 percent of the department’s budget by 2015.

“There’s been a huge inflationary rise in health care costs,” he said. “That’s why we put some proposals together. We want to maintain this benefit, but we need to keep costs down. We really don’t think the increase is egregious.”

Summary of proposed changes to Tricare benefit

Enrollment fees and deductibles are on the rise

[individual enrolment fee/family enrollment fee]

  Retired Junior Enlisted (E-6 and below)
  Tricare Prime Standard Deductible
Current $230/$460 $0 $150/$300
FY 07 $275/$550 $75/$150 $175/$350
FY 08 $325/$650 $140/$280 $185/370
  Retired Senior Enlisted (E-7 and Above)
  Tricare Prime Standard Deductible
Current $230/$460 $0 $150/$300
FY 07 $350/$700 $100/$200 $175/$350
FY 08 $475/$950 $200/$400 $185/$370
  Retired Officers
  Tricare Prime Standard Deductible
Current $230/$460 $0 $150/$300
FY 07 $500/$1000 $150/$300 $225/$450
FY 08 $700/$1400 $280/$560 $280/$560