UPDATE: The proposed House Budget for 2012 includes a provision which would block DoD's attempt to raise TRICARE premiums. Read more.
DoD plans to ask Congress to enact a law to permanently peg the rate of increase for TRICARE Prime premiums to the National Healthcare Expenditure (NHE) Index. This increase targets military retirees under age 65.
A DoD official told the press that the decision to use the NHE Index was made because it was transparent, easy to understand, and "fair." But, the NHE Index was 3.1 percent in 2009; and over the past 25 years, the average annual increase has been 6.4 percent.
This 6.4 percent average increase is huge when compared to the cost-of-living-adjustment for military retiree pay.
Many veterans’organizations have been pushing to peg the TRICARE Prime premium increase to the annual COLA, which is tied to the Consumer Price Index. Jimmie L. Foster, national commander of The American Legion said that the “DoD plan is unacceptable. Many of our military retirees live on fixed incomes and their COLA just doesn't keep up with the National Health Expenditure Index.”
Over the last 25 years, the COLA increase has averaged 2.8 percent; 3.6 percent less than the rise in national health expenditures. This will mean more out-of-pocket expenses for military retirees and their families.
Is this a “fair” increase for retirees who have not seen a COLA increase since 2008? Let your elected officials know how you fell about this issue.