View Full Version : Task force: Hike Tricare fees, co-pays, deductibles

05-31-07, 07:33 AM
Task force: Hike Tricare fees, co-pays, deductibles
Published Thursday May 31 2007
By Tom Philpott

The Pentagon-appointed Task Force on the Future of Military Health will endorse higher Tricare fees, deductibles and co-payments for retirees younger than 65 and their families in an interim report to be sent to Congress today.

It also will back other key features of the Tricare "reform" package first proposed last year by the Department of Defense. These include:

Raising beneficiary co-payments on prescriptions filled in the Tricare retail pharmacy network.

Indexing Tricare fees and deductibles so that automatic annual adjustments keep them in step with rising healthcare costs.

Establishing tiers for the new Tricare fee structure, probably based on rank at retirement, so that retirees with bigger annuities pay more for their healthcare coverage and retirees with smaller annuities pay less.

The task force won't endorse every aspect of the "Sustain the Benefit" plan floated last year to raise beneficiary cost shares. For example, the task force wants higher fees and deductibles phased in over three to five years rather than over two years, as Department of Defense initially proposed, or the single-year spike in fees unveiled, with a whiff of desperation, in the Defense's 2008 budget.

Also, the task force will propose that the higher Tricare fees and deductibles be set so that, when fully phased in, they are no more burdensome for retirees and their families than fee levels set in 1996 when Tricare was launched.

The task force goes farther than the Department of Defense's proposal in one area. It favors periodic adjustments to Tricare's catastrophic cap, the maximum amount of out-of-pocket expenses beneficiaries face in any given year. The current cap is $1,000 for active-duty families and $3,000 for other Tricare-eligible families. The original Department of Defense plan would have left the caps unchanged.

Co-chaired by economist Gail R. Wilensky and Air Force Vice Chief of Staff Gen. John D.W. Corley, the 14-member task force outlined its interim recommendations May 23 at a public meeting of the Defense Health Board.

The health board is a standing panel of health experts who advise the secretary of defense. The task force functions as a subcommittee of the health board. But it was Congress that ordered it established last year to review Tricare costs and fees after lawmakers rejected the Department of Defense proposals.

The task force's interim recommendations fall into four areas, two of which directly would impact beneficiary cost shares: higher retail drug co-pays and higher Tricare fees. Specific levels of fees, deductibles and co-pays recommended won't be detailed until a "final report," Wilensky said. That report isn't due until December.

The task force, she said, wants pharmacy co-payments raised on prescriptions filled outside of military treatment facilities to encourage use of more cost-effective alternatives, particularly the Tricare mail order option.

The task force wants Tricare fees realign for retirees younger than 65 so they are more "fair" to taxpayers yet still recognize retirees' "years of demanding service" to the nation, she said. Again, the task force won't unveil specific proposed fee levels until their final report.

Wilensky said Tricare benefits will remain generous compared to all other public or private plans. The higher fees, however, will take into account "very large expansions in benefits" since the mid-1990s while Tricare fees, deductibles and co-pays were left unchanged.

"The portion of the cost borne by beneficiaries should be increased to levels that are below" the Federal Employees Health Benefit Plan or the most generous private sector plans, Wilensky said. They also should be set at or below inflation-adjusted fee levels beneficiaries paid back 1996.

To soften the blow of higher fees and of indexing them to inflation, Wilensky said Congress could consider a one-time increase in military retirement pay, if deemed appropriate. But Wilensky suggested it is past time to begin to reverse the ever-widening cost differential for healthcare paid by working-age military retirees versus other American workers.

Besides adjusting pharmacy co-pays and Tricare fees, the task force will endorse: "best practice" acquisition strategies for pharmacy drugs; spot audits of the Defense Enrollment Eligibility Reporting System to ensure enrollees truly are eligible for Tricare; closer screening of retirees and dependents for alternative health insurance which, by law, must reimburse Tricare for care provided to any dual-eligible beneficiaries.

Steve Strobridge, co-chair of The Military Coalition, an umbrella group of service and veterans association, urged the task force during the meeting's public comment period, not to ignore factors that might have skewed the cost of military healthcare since 1996. For example, in measuring Department of Defense cost growth compared to fee levels, he said, the task force should consider the downsizing and closing of many base hospitals and the cost today of sending military doctors to war and therefore many more beneficiaries to get care more costly care from Tricare civilian providers.

Wilensky said fees won't be reset based on some percentage of overall military healthcare costs. But the task force will recognize that fees have been flat for 11 years, she said, and during that time the beneficiary's cost share has slipped from about 11 percent down to 4 percent.

Over the same period, added another task force member, retired Army Maj. Gen. Nancy Adams, the value of the health benefit has improved greatly. For retirees, the promise of "space available care" first made in the 1950s has been replaced with "universal access" to care on base or, more often, through a network of civilian physicians. Adams called it a "highest-quality" benefit having few limitations.

Dr. Gregory A. Poland, Defense Health Board president, advised the task force that the board is "very supportive" of its interim recommendations.


05-31-07, 07:16 PM
Tricare fees must increase, DoD panel says
By Kelly Kennedy - Staff writer
Posted : Thursday May 31, 2007 18:55:47 EDT

After months of hearings in which lawmakers have repeatedly declared their opposition to increasing Tricare fees for some beneficiaries, an interim report from a Defense Health Board task force recommends just that.

The report from the Defense Department’s Task Force on the Future of Military Healthcare recommends:

*Increasing drug co-pays for those who don’t use the Tricare Mail Order Pharmacy program or generic prescription drugs.

*Increasing costs for those who get their prescriptions filled outside the military system.

*Raising out-of-pocket expenses for retirees under age 65 — but giving them a one-time increase in retired pay to offset part or all of the higher expenses.

*Index annually the premiums and deductibles paid by under-65 retirees to account for inflation, and increase military retired pay to help with those higher costs.

*Increase premiums and cost shares for under-65 retirees to a level comparable to private-sector health insurance plans.

*Create a tiered-payment system for under-65 retirees based on their retired paygrades.

“The system should provide much-needed health care while considering fairness to the American taxpayer,” wrote task force co-chairs Gail Wilensky, a health policy analyst for Project HOPE, and Gen. John Corley, Air Force vice chief of staff, in a letter to Congress on May 31.

Defense officials argue that health care costs are rapidly rising to a level that the Defense Department can’t sustain. Costs in 2006 totaled about $36 billion and are projected to rise to $64 billion by 2015.

But Congress has been very reluctant to raise beneficiary costs, particularly in wartime, until they are convinced that every other cost efficiency has been wrung out of the system. For two years, Congress has rebuffed the Pentagon’s calls to raise health care fees.

The interim report went to the Senate and House armed services committees and Defense Secretary Robert Gates.

A final report is due in December, when the task force promises to make more precise recommendations, such as exactly how much it believes various fees and co-pays should be increased.

The interim report also recommends looking at some of the military health care system’s business practices, as lawmakers have urged.

The task force suggests reviewing the Tricare pharmacy program to see if more costs can be cut there; auditing Tricare to make sure only those who are eligible are receiving care, and creating a verification system beyond presenting an ID card to help do that; and possibly offering supplemental coverage to over-65 retirees who retain private health care coverage and do not use Tricare for Life.

The task force’s interim report can be found online at www.dodfuturehealthcare.n...53107.pdf.