RAO Davao City

United States Military Retiree Activities Office Davao City, Philippines

TRICARE USER FEE UPDATE 1 August 2008

Posted by Service Officer on July 31st, 2008

For the third consecutive year, the Pentagon’s budget request for fiscal 2009 calls for big hikes in enrollment fees, deductibles and pharmacy co-pays in its Tricare health insurance program .It’s not hard to see why. Military health care costs have ballooned from $19 billion in 2001 to $43 billion this year, almost 10% of the entire defense budget. At this rate, health care will hit $65 billion by 2015. Clearly, something must be done. But so far, the Pentagon and Congress have been talking past each other. Defense officials say they need fee hikes to raise revenue and to discourage people who have other health care options from using Tricare in the first place. “Health care costs are eating us alive” Defense Secretary Robert Gates told House lawmakers 6 FEB. “We really need to work with the Congress.” To date, however, Congress hasn’t said much more than no to fee hikes. That’s like ignoring your credit card bill and hoping your bank won’t notice. Congress has sat by for more than a decade, ever cognizant of soaring health care costs, but not once raising Tricare fees, which haven’t changed since the program’s inception in 1995. Not even to adjust for inflation.

 

The Pentagon’s plan will be based largely on a recent task force report that calls for beneficiary costs to double, triple and, in some cases, quadruple. The argument is that unless costs rise significantly, the military will be left to care for ever more people, because those with other options will have no incentive to look elsewhere for health care. But that position is undermined by the task force’s preoccupation with appearances. Bizarrely, one of the main concerns expressed in its report is a desire to avoid making the military health care system seem too generous when viewed by American taxpayers. Meanwhile, the proposed fee hikes make it look as if health care officials set out deliberately to change that perception. For example, the Pentagon task force proposes to increase retail pharmacy co-pays by as much as fivefold. The aim is to push people to use on-base pharmacies or the Tricare Mail Order Pharmacy, which are less costly for the Defense Department. But filling a prescription on base can be far from convenient for those on remote duty or living far from the main gate. And mail order is suitable only for long-term maintenance drugs. Consider, then, the impact of such a change on the spouse of a junior soldier whose kids all get sick at the same time and need antibiotics immediately. Fees would also rise for retirees. The bulk of the increases would fall on retirees under age 65, many of whom have access to other health insurance through private-sector employers.

Deplorably, the Pentagon hopes to discourage these retirees from using a benefit they earned over the course of 20 or more years in uniform by making it financially unattractive. That’s tantamount to revoking the benefit entirely. The third piece of the task force plan is a proposed $120 annual enrollment fee for retirees over age 65. Even the task force admits this idea runs counter to the intent of Congress when it created Tricare for Life in 2001.Together, the Pentagon hopes, these fee hikes will generate $700 million in revenue in fiscal 2009, plus $500 million in savings associated with reduced usage of Tricare benefits. So if lawmakers reject the proposal as they’ve done twice before, they’ll have to find $1.2 billion to make up the difference in next year’s budget. The Pentagon’s plan is unacceptable. But it is, at least, only the first salvo in this year’s debate. Now it’s up to Congress to answer with a plan of its own. [Source: AirForceTimes Don Harribine editorial 21 Jul 08 ++]

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