Military Advantage

New Report Targets Retiree TRICARE

According to a report released today by the Center for American Progress,  the cost of military health care will exceed $52B in 2012, if left unchecked. That's a 300 percent increase over the last decade. The report, titled ‘Doing What Works,’ also points out that by 2015, health care will account for 10 percent of Pentagon spending.

Like previous deficit-busting reports, the Center for American Progress’s recommendations would not change health care services provided to active duty troops, but suggests changes that specifically target working-age retirees who choose TRICARE Prime over the more expensive employer provided commercial coverage option.

While the facts and figures presented in the report may be accurate, the report insinuates that military retirees, especially those with second careers, are hurting the country by taking advantage of the benefits they have earned.

Unlike previous reports, the CAP report also calls for implementing fees for retirees over 65 who use TRICARE for Life; the supplemental policy for veterans enrolled in Medicare. Under the proposal TFL enrollees would pay a $120 annual enrollment fee, see an increase in cost-sharing with Medicare and would lose coverage for the first $500 in expenses.

The CAP report specifically recommends the following steps:

1. Gradually phase in increased fees for military retirees, including a tiered fee structure for working-age retirees- “Congress and the Defense Department should gradually increase TRICARE enrollment fees paid by working-age retirees. The fees should be tiered based on retirement pay. Additionally, TRICARE for Life enrollees should pay a $120 per person annual enrollment fee, as recommended by the Task Force on the Future of Military Health Care.” The report claims this would mean a savings of $6 billion a year.

2. Increase cost sharing to encourage responsible use of TRICARE for Life benefits- “TRICARE for Life should not cover the first $500 of an enrollee’s out-of-pocket expenses, and should be limited to 50 percent of the next $5,000 in Medicare cost sharing, as recommended by the president’s fiscal commission.” The report claims this would mean a savings of $4 billion a year.

3. Limit double coverage for high-income retirees and peg TRICARE premiums to Medicare Part B costs - “TRICARE coverage should be limited to working-age military retirees below certain income limits, or those who don’t otherwise have access to insurance through a spouse or civilian employer. Additionally, to ensure that TRICARE fees continue to be adjusted in the future, TRICARE premium levels should be pegged to Medicare Part B premiums.” The reports estimates a $5 billion a year savings.

Note the last recommendation, “TRICARE coverage should be limited to working-age military retirees below certain income limits.This should set off alarms -- It’s the first step toward changing TRICARE from an earned benefit of military retirement to a needs-based entitlement.

The fact is that the current cost of TRICARE is unsustainable, and many retirees are open to the idea of “modest” increases in TRICARE Prime enrollment fees. In fact, the Military Officers Association of America is advocating the idea of limiting TRICARE annual fee increases to the annual cost-of-living-adjustment (COLA) for military retirees. Although, past attempts to raise TRICARE fees for retirees have failed, the current deficit situation has made TRICARE a prime target from virtually all sides. It is time for military retirees to help provide the solution or face losing our benefits altogether.

Read the full MOAA report to see how much pegging TRICARE fees to Medicare would cost over the next 35 years.

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Visit the Legislative Center to send a letter to congress to let them know how you would make TRICARE Prime more sustainable for the long haul.

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