'Consolidated' TRICARE: Higher Fees, More Freedom
TRICARE Prime, the military's managed care option for 5.5 million beneficiaries who enroll for a modest fee to be guaranteed timely access to primary care, would cease to exist within a few years under the "Consolidated TRICARE" plan proposed in the fiscal 2015 defense budget.
Networks of care providers, built for Prime, would not go away and neither would their military patients, say architects of the plan. Instead, patients and providers would see the TRICARE program transformed into a preferred provider network with higher fees and more choice.
Patients could stay with current providers or exercise the freedom of a preferred provider system to choose their own physicians. Those who opt to find new physicians would receive discounts on fees if they select doctors who remain in the TRICARE network.
Families whose care is managed by military providers under a "medical home" concept could stay empanelled there, but would not be "enrolled," as under Prime where every referral to a specialist needs pre-authorization.
The end of Prime, consolidation of TRICARE as a preferred provider plan, plus charts of higher fees and co-pays, are highlights of the plan to transform the military health benefit, as delivered to Congress last week.
Fee increases would be more broad than deep, with some surprising exceptions. For example, current TRICARE for Life beneficiaries would be exempt from the first-ever TFL enrollment. Only retirees and family members who age into TFL after the fee takes effect would be impacted, protecting the generation most often promised free health care for life.
By fiscal 2016, new TFL users would be charged one percent of gross retired pay but no more than $300 a year ($400 for flag officers). The fee would rise to two percent of retired pay by 2018, capped at $600 ($800 for flag officers). Caps thereafter would be raised yearly to match inflation.
Also exempt from most fee increases would be medically retired service members and survivors of members who die while on active duty.
One controversial change would be an annual "participation fee" for most retirees under 65 to stay eligible for military health care. As of Jan. 1, 2016, when consolidated TRICARE is to take effect, the participation fee would be set at $286 per individual, $572 for a family. Those amounts simply would match enrollment fees under Prime if had continued.
The participation fee and size inspired one critic to describe consolidated TRICARE as "TRICARE Standard with an enrollment fee."
That description is off mark, said Army Maj. Gen. Richard W. Thomas, director of healthcare operations for the Defense Health Agency, because it ignores the "robust, high quality TRICARE network of providers" that DHA vows to sustain, and wouldn't have to do so under TRICARE Standard.
"Beneficiaries will have access to tools we have brought online over the last decade or so, to include TRICARE Online which allows them to make appointments, email military providers over a secure system, and obtain prescription drugs. And importantly, beneficiaries who use military treatment facilities or network care will have no deductible and substantially lower costs than those who select the non-network, civilian only care [of] TRICARE Standard today," Thomas said.
With Consolidated TRICARE, beneficiaries could keep their providers and see "slightly increased copayments for care, but these remain below Standard and below most private health insurance cost-sharing levels."
Over the past eight years, every Pentagon plan to corral health care costs focused exclusively on raising fees, co-pays and deductibles, with the biggest pops aimed at working-age military retirees. The Bush and Obama administrations even used the same arguments, telling Congress its refusal to lift a freeze beneficiary cost-shares from 1996 had made the triple option of TRICARE Prime (managed care), Extra (preferred provider discounts) and TRICARE Standard (traditional fee-for-service insurance) unsustainable.
Despite such pleas, lawmakers still blocked substantial fee increases, allowing only modest enrollment fee hikes for retirees enrolled in Prime and higher co-pays on prescription drugs, particularly at retail outlets.
This year Defense leaders adopted a new playbook for TRICARE reform, desperate to find immediate health care savings because of budget sequestration and to support the Military Compensation and Retirement Modernization Commission. The Joint Chiefs have joined in backing fee increases that are less severe than DoD sought earlier, but are accompanied by profound changes to the TRICARE benefit.
Total projected savings are $9.3 billion over the first five years, with almost $4 billion of that from benefit consolidation rather than fee hikes.
Active duty members would continue to receive priority access to care at no cost. Other beneficiaries still would see their lowest costs on base, followed by preferred provider care, and then care from outside the network.
A look at co-pays planned for outpatient visits touches on several controversies. Most retirees under age 65 and their dependents would face co-pays for the first time at base clinics or hospitals: $10 for a primary care visit; $20 for specialty care, $30 for urgent care and $50 for an emergency room visit, a move intended to curb abuse of ERs to receive routine care.
The same working-age retirees and family members would face co-pays $10 to $25 higher using preferred providers. To use out-of-network providers, active duty family members would pay 20 percent of allowable costs and working-age retirees and families 25 percent, as under Standard.
Working-age retirees would pay the annual TRICARE participation fee even if they use employer health insurance as first payer. "But we may make exceptions to that," said a senior DHA official. Higher prescription drug co-pays are the same as proposed by the Defense Department last year.
Advocates for active duty families worry about a disparity in out-of-pocket costs between those who would have access to military facilities at no charge and those assigned far from base, or who can't gain access to military care, and would face higher co-pays or even pay Standard-like cost shares.
A DHA official said some co-pay relief is planned, at least for members in remote assignments with families. They would have pay only network co-pays even if they had to use out-of-network providers. To do more for them, he said, would be unfair to other families also facing higher co-pays.
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