Tricare Fee Updates

[knewheart]

TRICARE USER FEES UPDATE 11: Ignoring the intimidating props - boxes of angry letters from thousands of military retirees - senior Defense Department officials and military leaders appeared before a contentious House subcommittee to make their case for hiking Tricare fees sharply for under-65 retirees and their families. In the verbal sparring that ensued, Pentagon leaders gave as good as they got. But no lawmaker took the role of referee. All threw punches on behalf of retirees, and treated with kid gloves a second panel of witnesses representing dozens of pro-retiree military associations and veterans groups.

The Pentagon's plan to boost out-of-pocket Tricare costs for 3 million beneficiaries, to include a tripling of managed care enrollment fees for retired officers and a doubling for senior enlisted retirees, seemed to shatter some traditional alliances and form new ones. Republicans and Democrats together questioned the realism of projected cost savings from raising Tricare fees and the wisdom of doing so in wartime. The active duty four-star officers in the room spoke in support of the increases. Retired officers led the opposition.

David Chu, undersecretary of defense, and William Winkenwerder, the Pentagon's health affairs chief, reminded the armed services subcommittee on military personnel that, since 1995, Tricare benefits and the beneficiary population have grown, program costs have soared, yet Tricare fees have remained the same.

Rep. Vic Snyder (D-AR) the ranking Democrat on the panel questioned DoD hand-wringing over the widening disparity between Tricare fees and private health insurance premiums. He noted there should be a disparity because that's part of what the government gives service personnel for turning their life's over to them 24 hours a day. He said, ".We're going to pay for health care for our men and women in uniform, and retirees. We're going to sustain the program. The question is how... and right now there's not a lot of enthusiasm for the method you all have proposed". Snyder asked if the firestorm over Tricare fees could have been avoided if officials pushed for a more modest change, perhaps to adjust retiree Tricare fees in the future by the percentage rise in military
retired pay each year.

Retired Navy Vice Admiral Norbert Ryan, Jr., testifying on behalf of the Military Coalition, a consortium of service associations, called the planned fees "disproportional and inappropriate. Chu countered by saying another way to look at the increased fees is that for 11 years, the beneficiary population has enjoyed a relief from indexing. Defense officials estimate the higher fees will help save $11 billion by 2011 but only about one-third of that would come from the fee increases. The bulk of the savings is based on the notion that many retirees and their families would drop Tricare if beneficiary costs rose.

Rep. Walter Jones (R-NC) chastised Dr. David Chu, for statements that "Congress has gone too far in adding benefits." In effect, Jones said, the Pentagon is proposing to balance the budget on the backs of beneficiaries. "It's not really your responsibility," Jones added. "It's our responsibility in Congress to find the funds to pay for this care."

Former DoD Comptroller Dov S. Zakheim, testified that the Administration is skirting FY2005 Defense Authorization Act (which shifted responsibility for all TFL trust fund deposits to the Treasury Department) by continuing to charge TFL fund deposits against the defense budget. Zakheim argued that these deposits should not be counted, as a matter of law or policy, against the defense budget. Zakheim also said he was struck by the difference in the positions being taken by today's military leaders and those of five years ago. Back then, he noted, the Joint Chiefs urged Congress to increase retiree health benefits because broken promises to retirees were hurting active duty retention. At this hearing, all four Service Vice Chiefs of Staff supported charging retirees higher fees.

On a 22-15 party-line vote, the House Budget committee rejected an amendment by Rep. Chet Edwards (D-TX) which would have blocked Pentagon plans to double and triple Tricare premiums for working-age military retirees. The bill now moves to the floor of the House. The budget resolution is just a blueprint for spending in the fiscal year. The Appropriations Committees have the final say of how the money is actually spent. In the interim the Military Retirees' Health Care Protection Act H.R.4949 has gained 19 cosponsors for a total of 138. This bill would in effect prohibit the DoD from increasing the Tricare rates and fees effective 31 DEC 05.

Retirees are encouraged to write their Representatives and express their feelings about the proposed changes. At

http://capwiz.com/usdr/issues/alert/...591236&type=CO

can be found a proposed letter, the current list of cosponsors, and the text of the bill.
[Source: Military Update Tom Philpott article 1 Apr & USDR Action Alert 5 Apr 06]


TRICARE USER FEES UPDATE 12: Although the Defense Department has pledged to work with Congress on its plan for steep hikes in Tricare fees for military retirees, a top DoD health official says the department has full authority to jack up the enrollment fees for Tricare Prime and raise pharmacy copayments for all Tricare users except active-duty members. On the other hand, the
Assistant Defense Secretary for Health Affairs said the plan to establish a first-time-ever enrollment fee for Tricare Standard would require a change in the law.

On 14 MAR, the Military Officers Association of America proposed list of 16 options to make Tricare more cost-effective. MOAA's president, retired Navy Vice Adm. Norb Ryan Jr., said that implementing only three or four of the cost-cutting items would fully eliminate the need to hit military retirees with a $11.2 billion fee increase over five years.

On 7 APR the "Military Retirees' Health Care Protection Act." (S.2617) was introduced in the Senate. Senators Frank R. Lautenberg (D-NJ) and Chuck Hagel (R-NE) introduced the bipartisan legislation to protect military retirees and their families from DoD's proposed increase in health care fees. S. 2617 contains many of the provisions contained in H.R. 4949, which was
introduced recently in the House by Representative Chet Edwards (D-TX). Both the House and Senate are in recess for the two week Easter break. Members of Congress will return to the Capitol on April 24. Perhaps, after getting an earful from their veteran constitutes, more in Congress will sign on as cosponsors to these two bills to defeat DoD's attempt to levy Tricare user fees and increase copays.
[Source: Armed Forces News 7 Apr 06]

[knewheart]

TRICARE USER FEE UPDATE 13: Two key personnel proposals in the White House's fiscal 2007 defense budget plan were blocked by the House Armed Services subcommittee on 26 APR. John McHugh (R-NY) the day before announced in advance that the military personnel subcommittee he chairs would not approve a Bush administration proposal to increase Tricare fees for military retirees under age 65 and their families who are enrolled in Tricare Standard and Tricare Prime. Every member of the panel voted against this. Also, the Committee has recommended a 2.7% military raise vice the 2.2% the Bush budget proposal called for. McHugh said in a statement released by his office, "Though DoD's proposal was meant to be a cost-saving measure, it is the wrong way to go about it". It is unusual for a Committee member to talk in advance about what will be included in the defense bill. However, the subcommittee's strong opposition was well known, so McHugh was not saying anything unexpected. The proposed fee increases, he said, "sent a message to the many men and women who have served our nation through their military service that we're going back on a promise that was made them. We . simply are not going to burden retirees with increased costs at this time.". Instead, the subcommittee's version of the 2007 National Defense Authorization Act (H.R.5122) calls for studies of military health care costs. The studies (one by the Government Accountability Office, the bipartisan investigative arm of Congress, and the other by the Defense Department) are to fully account for health care funding and look at alternatives to fee increases.

Whether the Senate will approve any part of the administration's TRICARE fee adjustments is still a little uncertain. Lindsey Graham (R-S.C.), chairman of the Senate military personnel subcommittee, wants them delayed and an independent review conducted of real TRICARE cost growth and the projected cost-savings from the administration's plan. McHugh said what doomed that plan in the House were both the timing and the details. Timing in the sense that the nation is fighting a war and that some of those warriors who deployed to Iraq and Afghanistan soon would be among the pool of Tricare beneficiaries targeted by the higher fees. That bothered many lawmakers who also had great concern over specifics of the plan. The increases were seen as too steep and too swift, with Tricare Prime enrollment fees leaping 200% over two years for senior enlisted retirees and 300% for retired officers. The projected cost-savings of $11 billion by 2011 also was suspect. Most of it would come from assumed behavior modification and not from added revenues from the higher fees. DoD was betting that large numbers of beneficiaries working in second careers either would stop using TRICARE or would decide not to shift into TRICARE from employer-provided health plans. The Congressional Budget Office already had lowered the administration's estimate of $735 million in cost-savings for fiscal 2007 if all fee hikes were adopted.

Language approved by the subcommittee specifically would prohibit the Defense Department from raising beneficiary cost-shares until 31 DEC 07 for Tricare Prime (the managed care plan), Tricare Standard (the fee-for-service option) and Tricare Reserve Select. Congress will have to try to accommodate the loss of those cost-savings in shaping the rest of the defense budget. Still alive, McHugh suggested, are some aspects of the administration's plan to change the co-payment schedule for the TRICARE retail and mail-order pharmacy benefit. The subcommittee liked the idea of ending a $3 co-payment on generic drugs obtained by mail. McHugh was silent on the other proposed changes. Defense officials also want to raise the co-pay in the retail network from $3 to $5 for generic drugs and from $9 up to $15 for brand name drugs. What the subcommittee is recommending on this will be revealed at the full committee mark up. The full armed services committee will hold its mark up of the bill May 3 and additional amendments impacting military personnel will be voted on.

(SOURCE: RAO Bulletin, 1 May 2006)