DoD Proposes Higher TRICARE Fees

The Defense Department hopes to get its healthcare costs under control starting next year with "modest’ increases in annual membership fees for TRICARE, along with some higher co-pays for prescription drugs, officials said yesterday at the Pentagon.

The proposal is included in the $671 billion fiscal 2012 DoD budget that was formally released this week. Healthcare costs account for $52.5 billion of the total, Defense Comptroller Robert Hale said. While some weapons programs costs are now climbing at a faster rate, Hale said he stands by his comments made a year ago that healthcare is "eating our budgetary lunch."

The Pentagon wants to slow that growth and ultimately chip away at the costs over the next five years, beginning next year with increases in the annual membership fees for military retirees under 65. Family memberships would go up $5 a month, from $460 to $520 per year; enrollment for single people would go up $2.50, or from $230 to $260 per year. The increases do not apply to active-duty military families and members, or retirees past age 65.

The budget materials made available yesterday did not spell out what the co-pay changes would be, though Hale called them "modest." Currently, retirees under age 65 enrolled in TRICARE Prime do not make co-payments for prescriptions. Those enrolled in TRICARE Prime pay from $3 for generics or $9 for brand-name drugs. TRICARE Extra members pay 20 percent of the DoD’s negotiated cost for the medicine, and those in TRICARE Standard pay 25 percent. Officials said changes to the prescription plan will provide incentives for members to use generics and get prescriptions via mail order.

"We wanted to start slow, given the past history in this area," Hale said. "Several years ago the administration made some more far reaching proposals. They were turned down by Congress ... we are hopeful that by starting slowly and with modest proposals we will get their agreement.

Hale said the proposed 2012 budget projects savings of about $424 million in the next five years as a result of the enrollment fee increases alone. But the fees would account for greater savings down the road because the plan is to tie them to the Medicare healthcare index, he said. As those costs rise, the enrollment fees would go up, too.

"So if you go out 10 or20 years it will have a major effect," he said.

The Pentagon also hopes to get control over healthcare costs through in use of personnel and equipment, centralizing procurement, expanded use of urgent care and nurse advice lines, and changes to subsidies to some hospitals.

The budget anticipates total savings over five years of nearly $8 billion, according to Hale.

But if the past is any guide the Pentagon can expect strong opposition to even the slightest adjustment to the TRICARE fees from veterans and powerful non-profits that represent them.

"Go ahead, take more of my little bit of retirement pay that you have failed to give me an increase on for the past 2 years," a retiree from San Antonio wrote recently in response to a Military.com blog on the possible increases. "Don't try to balance the budget on Military! We signed away our lives for 20-plus years and this is the thanks we get?"

Not all veterans are opposed to the notion of paying a bit more – within reason.

"If the annual premium had been indexed to the annual COLA back in 1995, our annual premiums would now be about $700," he wrote. "Obviously, the cost of providing health care for retirees has gone up more than the annual COLA. I wouldn't mind having my annual TRICARE premiums adjusted once to catch up and then each year indexed to the COLA, but my dear USA, please remember that I gave you over 27 years of my life and you promised me that in exchange for receiving low pay and working long hours, you would take care of me until I die. So, let's both compromise on this and meet in the middle, OK?"

The budget includes a 1.6 percent increase in base pay for servicemembers, an amount equal to the increase in the Employment Cost Index, DoD said. There will also be increases in the Basic Allowance for House (4.2 percent) and Basic Allowance for Subsistence (3.4 percent).

The Pentagon has $2.3 billion budgeted for care and support of wounded and injured veterans and their families. That amount includes $415 million for research into post-traumatic stress disorder, traumatic brain injuries, prosthetics, vision and hearing loss and other injuries.