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Our Intent: The intent of this blog is to provide more information on the proposed changes to TRICARE that are a part of the FY 2012 DoD budget submission that is before Congress right now. Some history is provided, and some of the arguments on both sides of the issue. At the time of posting this blog AUSN’s formal written testimony is not complete, there are issues about which we are clear and others we are working. Your Association is listening carefully to the feedback that you provide. No doubt what is said here will please some and upset some.

History Data Points:

  • Medical care for active duty and family members has always been provided for after the member paid a small deductable. That continues today.
  • Retirees had to depend on a military treatment facility for care if one was located in their geographic region.
  • CHAMPUS was introduced which gave military personnel more freedom of choice in health care instead of having to go to a military treatment facility.
  • In the 1990’s TRICARE replaced the long-standing CHAMPUS system. Along with this change came the “enrollment fee” charge to TRICARE Prime. This is the fee that is targeted to increase. TRICARE had three programs: Standard, Extra, and Prime.
  • Prior to 2001, retiree service-provided/funded medical care ended when the retiree turned age 65 and enrolled in Medicare. However, the retiree could always get medical care at a military treatment facility, along with pharmacy needs.
  • To amend the “broken promise of medical care for life,” effective October 2001 Congress provided retirees age 65 and over with TRICARE For Life (TFL) at no cost. The only requirement was to be enrolled in Medicare Part B. TFL pays for medical costs beyond what Medicare pays. This ended the need for supplement insurance. A definite cost-savings to retirees.
  • TRICARE Reserve Select was enacted by Congress a few years back to assist Selected Reservists of Reserve Components maintain affordable health care.
  • This year TRICARE Reserve Retired was enacted by Congress to fill the gap for Gray-Area retirees awaiting age 60 to pick up regular TRICARE as part of their retirement.

Current Situation:

  • TRICARE For life is not targeted for attachment of a fee.
  • TRICARE Standard and Extra remain the same with deductibles.
  • TRICARE Prime fee for active duty personnel is not changing.
  • WHAT IS CHANGING? DOD is proposing a fee increase for TRICARE Prime for working age retirees under age 65. Why? Too many working age retirees are opting for TRICARE Prime instead of the more costly, premium based employer health plans.

What DoD is proposing: For fiscal year 2012 DoD is proposing a “modest” TRICARE Prime fee increase of $2.50 per individual/mo and $5.00 for a family/mo for working age retirees. For a family that is about a 13% increase. More importantly for FY 2013 and beyond they propose to index annual TRICARE Prime fee increases to a general health care expense index which they have not yet identified. To encourage use of mail order prescriptions they propose to eliminate co-pays for most mail order maintenance drugs while increasing co-pays if you go to your neighborhood network pharmacy. Additionally they want to require that all new entrants to the Federal Services Health Care System will move to TRICARE for Life when they turn 65. One more proposal is to require the one hundred or so Sole Community Hospitals to accept TRICARE reimbursement rates. This could affect the hospitals willingness to accept military patients.

The arguments: On the one side they are something like this. We’ve got a pretty good deal here regardless. The country is in trouble and we should do our share. We all know how much health care costs are increasing for everyone. We can afford a bit more to help keep the program going. It is better to be reasonable than to ask for the moon. It is unreasonable to think that over time costs aren’t going to rise. Accept a small increase just don’t allow the indexing. We have heard all these from our members.

On the other side the arguments are something like this. We are entitled to free health care, period. This is the camel’s nose under the tent – if we agree to this it will be much worse next year. Indexing equates our health care to the rest of the nation’s – we have earned and were promised better. We can’t trust DoD to look out for us so tell Congress absolutely not. Even a small increase matters to our enlisted, so say No. Why don’t we get rid of a carrier to pay for health care? We have heard all these from our members as well.

Meetings: AUSN has attended two meeting with DoD officials at the Under Secretary level and there may be more. Several things are clear: DoD is reaching out to Associations because they want to know how tough a fight they are in. DoD wants to set up indexing so that it can automatically raise rates without Congressional interference. DoD admits that what is proposed this year, including the future indexing, will not fix their problem. DoD will not pursue real efficiencies within the Services unless forced to by Congress which is unlikely.

AUSN has attended meetings with key HASC and SASC staffers as well as individual Congressional staffers. We are hearing that the mood to CUT is so great, particularly among Freshmen Congressmen that the “no increase” argument may be unwinable on the floor of the House.

Our position: AUSN believes that the proposed indexing is not acceptable. We would prefer that DoD have to propose increases each year which can be considered by Congress and potentially accepted or rejected. (DoD can raise fees if it wants unless Congress passes legislation to block which is what we have achieved for several years in a row). Tying increases to the COL adjustment % received by retirees is something we have supported in the past and could support now. Our members are telling us that they could accept the one year increase proposed for FY 2012. DoD would want a COL + and we reject that idea.

Posted in: Capitol Hill Blog

Post Rating


Tuesday, March 29, 2011 5:22 PM
Tri-Care Changes 2012 is an excellent, concise update on the poop for those of us who have 8-track flashbacks.
Thanks, Admiral
John E Priest
# John E Priest
Wednesday, March 30, 2011 7:09 AM
I agree with the comments about the camel's nose under the tent. I think the year on year consideration along with factoring in the COL authorized is the only way to address the issue fairly (ie how can service members -- current & retired -- equitably participate in the adjustments to the reality of run away government and associated benefits.

Our civilian leadership is all too ready to use the militrary in combat and thus creates so many more costs that really are unnecessary.

It is only through the vigilance to those dedicated through AUSN (and paraallel other associatioons) that we have anything approaching health care,

Thank you.
Earl Ferguson
# Earl Ferguson
Wednesday, March 30, 2011 10:02 PM
Consider this, Medicare eligible TFL members and those approaching that age, There is an increasing problem with doctors opting out of Medicare. Internists and GPs are the most likely because their patients tend to be older. If your Internist opts out, good luck finding another who is accepting new Medicare patients.

There is no way for you to file a claim direct to TriCare. You just became uninsured.

This is not the proper way to reduce TFL costs, but it is happening.

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