View Full Version : Tricare fee hikes contingent on review

03-15-06, 07:17 AM
March 14, 2006 <br />
Tricare fee hikes contingent on review <br />
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By Rick Maze <br />
Times staff writer <br />
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A Senate panel promised Tuesday that it will not endorse a Pentagon plan to increase Tricare fees for...

04-04-06, 01:44 PM
April 10, 2006
Tricare fees must rise, defense officials say

By Gordon Lubold
Times staff writer

For more than a decade, military health care beneficiaries have benefited from Tricare fees that were purposely kept flat.

But that must change, at least for some beneficiaries, to avert a fiscal crisis that could engulf the entire military medical system, defense officials said, explaining their push to raise health care fees for “working-age” retirees to avert a fiscal crisis.

So far, lawmakers seem disinclined to heed that call and are lining up against the proposal to significantly increase fees to offset soaring military medical costs.

The proposal to raise Tricare fees has quickly become one of the most hotly contested issues in the Pentagon’s $439 billion defense budget request for fiscal 2007. Amid the ongoing wars in Iraq and Afghanistan, lawmakers simply do not want to be seen — particularly in an election year — as supporting anything that could impact service members or veterans in a negative way.

Even many Republicans have come out against the Bush administration proposal, and the reason was on display at a March 29 hearing of the House Armed Services personnel subcommittee as staffers arranged boxes stuffed with thousands of letters from constituents on the issue.

“This government has got to get its priorities straight,” said Rep. Walter Jones, R-N.C., who has 60,000 military retirees in his district, which includes Camp Lejeune, N.C.

Jones complained that the rate of foreign aid has risen at the same time that the Pentagon is asking retirees to bear the burden of keeping the Tricare system solvent.

“It’s just not right,” he said.

The Pentagon proposal would raise enrollment fees by as much as 115 percent over two years for retirees under age 65 and their families. Fees and deductibles would increase for Tricare Prime, and new enrollment fees would be created for Tricare Standard.

The fee structure would be three-tiered: one for retired officers, one for enlisted retirees in paygrades E-7 and above, and a third for retirees E-6 and below.

The proposed changes would not affect retirees under Tricare for Life or active-duty family members.

The Pentagon projects that it will save $11 billion between 2007 and 2011 if the proposal is approved.

David S.C. Chu, undersecretary of defense for personnel and readiness, said Tricare beneficiaries contributed about 27 percent of the overall cost of the program in 1995, compared with about 12 percent now. He said it is time to bring the fee structure back in line.

“No one believes” that having the Defense Department carry 88 percent of the medical system’s costs “is sustainable over the long haul,” Chu told the panel.

Chu has the support of each of the services, whose vice chiefs all testified to the importance of the fee hike proposal.

Gen. Robert Magnus, assistant commandant of the Marine Corps, said the Corps spends about 63 percent of its annual budget on personnel and another 20 percent on operations. The rest is put toward future investment and research and development.

Those accounts would be squeezed hard if the Corps has to pony up more money to keep Tricare, which Magnus called “the gold standard” of health care, afloat. Ultimately, he said, readiness would be thrown into jeopardy unless something is done.

“It would be nice if somebody would give us more money, but that’s not our job here,” Magnus said.

“It’s to work with Congress for not only a health system that supports the Marines, the sailors and soldiers and airmen, but for the readiness of the force ... sustained over the long haul.”

Defense officials defend the administration proposal by saying the program’s fee structure should be more in line with the private sector, effectively eliminating the “disparity” between military and private-sector health systems.

Dr. William Winkenwerder Jr., assistant secretary of defense for health affairs, noted that the Defense Department could have raised Tricare fees as much as it wanted to over the years but chose not to.

When Tricare was introduced in 1995 and in the years immediately afterward, the military was downsizing and inflation rates were relatively low, resulting in virtually no increases in health care fees, he said.

But beginning in 2000, a radical expansion of Tricare took place, including the advent of Tricare for Life, the health care program for military retirees over age 65, while at the same time, health care costs in the private sector began to skyrocket.

Winkenwerder acknowledged that if the Defense Department had chosen to raise fees incrementally over the years, today’s proposal would not be such a big pill to swallow.

“We all kind of maybe regret that these inflation adjustments hadn’t been made earlier, but here we are,” Winkenwerder said.

“They were not made.”


04-07-06, 05:43 PM
April 07, 2006
Tricare fee hike plan draws heat from Hill

By Rick Maze
Times staff writer

Congressional opposition continues to grow to a Bush administration plan to increase fees for military retirees who use Tricare health insurance, with a bipartisan group of senators introducing a bill Friday to limit fee increases.

Unlike a bipartisan House bill that would prohibit fee increases outright, the Senate plan would allow enrollment fees, deductibles and co-payments to increase by the same level as the annual cost-of-living increase in retired pay.

Sens. Chuck Hagel, R-Neb., Mike DeWine, R-Ohio and Frank Lautenberg, D-N.J., are the chief sponsors of the Military Retirees Health Care Protection Act.

In a statement on the bill, DeWine acknowledged that health benefits have expanded over the years and costs have increased, but the fees proposed by the Bush administration “would more than double enrollment fees.”

“In almost every case, that’s an unfathomable single-year increase for families that live on a very tight budget,” he said. “This is particularly troublesome when the Department of Defense has many other options that it may pursue to limit the mounting costs of military medicine.”

DeWine said the fee increases seem to buck trends for better, more affordable military health care.

“Last year, I worked to extend military health insurance to every dependent child of a deceased service member at no cost as if that parent were still alive and serving our nation,” he said. “The Department of Defense indicates that this important benefit could save dependents as much as $15,000 per year compared to the cost of private health insurance premiums. This cost-free extension of Tricare Prime medical insurance to surviving minor children will alleviate one of the biggest worries on families today — health care costs.”

But the benefit would not be worth as much “if premiums and fees are drastically increased for the surviving spouse” because “worries about health care costs will still weigh heavy on these families,” he said.

“Tricare premium increases would undo the good we have accomplished on this front,” DeWine said.

DeWine said the fee increases proposed by him, Hagel and Lautenberg are fair, although they would not be enough to resolve the Pentagon’s health care budget problems.

“I encourage the Department of Defense to explore other options for reducing the overall cost to taxpayers of delivering this benefit,” DeWine said. “For instance, DoD should negotiate with drug manufacturers for discounts in the Tricare retail pharmacy network, and encourage beneficiaries to use the mail-order pharmacy.”