TASK FORCE URGES LARGE INCREASES IN BOTH UNDER 65 AND TFL

The DEC 07 report of the Task Force on the Future of Military Health Care got a lot of attention by urging large increases in fees for military retirees under 65 and an enrollment fee for Tricare For Life, among many other proposals. For the last year, those recommendations have been under review by a special committee appointed by the Secretary of Defense. Now that committee has issued its “recommendations on the recommendations.” The good news is that the Pentagon panel didn’t propose fee hikes as severe as those urged by the Task Force, and it didn’t support the proposal for a TFL enrollment fee. The bad news is that it still recommended significant fee hikes for retirees under 65, and proposed means-testing those fees based on total family income. Here are some selected specifics:

–Fees for under-65 retirees: The DoD committee agreed with the Task Force that Tricare fees should be raised and periodically adjusted to reflect some percentage of military health costs, but declined to propose specific fee levels. They recommended tying Tricare Prime enrollment fees to some percentage of the Medicare Part B premium ($96.40 per month this year for the base rate), with a family rate at double the single rate. Tricare Standard deductibles would be raised by an amount sufficient to provide the same relative level of beneficiary cost-sharing. The committee proposed to have DoD secure congressional authority to raise fees and then figure out how much to raise them. They envisioned phasing in the fee increases over a period of years, citing the Task Force’s four-year plan.

–Tiering/Means-Testing: The committee recommended setting different tiers of fees based on retirees’ family adjusted gross income.

–Pharmacy Copays: The committee proposed eliminating copays for generic and brand-name formulary medications purchased through the mail-order pharmacy system. For retail pharmacy purchases, copays would be $4 for generics (vs. the current $3), $20 for brand names (vs. $9), and $30 for non-formulary medications (vs. $22).

The Military Officers Association of America (MOAA) was pleased to see the proposal they previously endorsed to eliminate mail-order copays for most medications as an incentive to use that venue, which offers significant savings for members and the government alike. But most of the other recommendations still violate what MOAA believes should be fair principles for military health care fees. They do not accept that, unlike almost all other employer health programs, military retirees’ Tricare benefits should be subject to means-testing. They also reject the idea that military beneficiaries should have to pay any set share of DoD costs, when those costs are driven up by unique military readiness requirements, documented inefficiencies, and ineffective accounting systems that have been deemed un-auditable by the Government Accountability Office and DoD’s own Inspector General. And they certainly will oppose any effort to get Congress to buy a “pig in a poke” by giving DoD additional authority to impose unspecified fee hikes in the future.

The obvious question is, “What’s likely to happen with these recommendations?” The only fair answer is that we can’t be sure. But a few observations are in order. First, they were prepared under the purview of the previous administration, so there’s no telling how they’ll be viewed by the new political leaders. Second, they’re considerably more vague than previous recommendations, and the more vague the recommendations, the harder it may be for them to gain traction. The people who did the study acknowledged the possibility that the new administration may want to take a year to study the issues for themselves before taking a position, but that, too, is pure speculation. The first true indicator we’re likely to have is what’s in the first Obama administration budget submission to Congress. And we probably won’t see that until April. [Source: MOAA Leg Up 20 Feb 09]

Source: RAO Bulletin March 1, 2009

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