USA — Health Plan to Remain Free for Troops, Officials Emphasize

WASHINGTON, Jan. 7, 2011 — Though Defense Sec­re­tary Robert M. Gates seeks mod­est pre­mi­um increas­es for work­ing-age mil­i­tary retirees who use the TRICARE Prime health plan, the ben­e­fit will remain free to ser­vice mem­bers, defense offi­cials empha­sized today.
Gates unveiled sweep­ing cost-cut­ting ini­tia­tives yes­ter­day, includ­ing a rec­om­men­da­tion to increase TRICARE Prime pre­mi­ums for work­ing-age retirees in fis­cal 2012, the first increase in the plan’s 15-year his­to­ry.

“For some time, I’ve spo­ken about the department’s unaf­ford­able health costs, and in par­tic­u­lar the ben­e­fits pro­vid­ed to work­ing-age retirees under the TRICARE pro­gram,” the sec­re­tary told reporters.

“Many of these ben­e­fi­cia­ries are employed full-time while receiv­ing their full pen­sions, and often forego their employ­ers’ health plan to remain with TRICARE,” he said. “This should not come as a sur­prise, giv­en that the cur­rent TRICARE enroll­ment fee was set in 1995 at $460 a year for the basic fam­i­ly plan, and has not been raised since.”

Gates not­ed the dra­mat­ic increase in insur­ance pre­mi­ums dur­ing that peri­od for pri­vate-sec­tor and oth­er gov­ern­ment employ­ees. Fed­er­al work­ers pay rough­ly $5,000 a year for a com­pa­ra­ble health insur­ance pro­gram, he said.

“Accord­ing­ly, with the fis­cal year 2012 bud­get, we will pro­pose reforms in the area of mil­i­tary health care to bet­ter man­age med­ical cost growth and bet­ter align the depart­ment with the rest of the coun­try,” Gates said. “These will include ini­tia­tives to become more effi­cient, as well as mod­est increas­es to TRICARE fees for … work­ing-age retirees, with fees indexed to adjust for med­ical infla­tion.”

These ini­tia­tives could save the depart­ment as much as $7 bil­lion over the next five years, he said.

Mil­i­tary retirees auto­mat­i­cal­ly are enrolled in one of two TRICARE plans, pro­gram spokesman Austin Cama­cho explained. Retirees who join TRICARE Prime, the system’s man­aged-care option that cov­ers active-duty mem­bers, pay an annu­al enroll­ment fee of $230 per year for an indi­vid­ual or $460 for a fam­i­ly. Those in TRICARE Stan­dard, a fee-for-ser­vice plan, pay no enroll­ment fee or pre­mi­um. Instead, they pay a year­ly deductible of $150 per per­son or $300 per fam­i­ly, as well as co-pay­ments or cost shares for inpa­tient and out­pa­tient care and med­ica­tions, up to a $3,000 annu­al cap on out-of-pock­et expens­es.

Mil­i­tary retirees aren’t required to report whether they have jobs that offer insur­ance plans, Cama­cho said, not­ing that hav­ing oth­er insur­ance does not take them off the TRICARE rolls. Rather, he explained, TRICARE becomes the “sec­ond pay­er” for health care, pick­ing up co-pay­ments and deductibles from the pri­ma­ry insur­ance plan.

Mean­while, the senior TRICARE offi­cer told Amer­i­can Forces Press Ser­vice the sys­tem is poised to sup­port Gates’ new effi­cien­cy mea­sures and already is mak­ing progress as it strives to pro­vide the best health care at the best cost.

“All of these things help us work togeth­er to help us achieve the secretary’s goals, and we are already start­ing to make progress,” Navy Rear Adm. (Dr.) Chris­tine S. Hunter said. “We need to be very aware that there is a pres­sure [to improve effi­cien­cy and con­trol costs] and the resources are not infi­nite. But we are all part of the solu­tion.”

U.S. Depart­ment of Defense
Office of the Assis­tant Sec­re­tary of Defense (Pub­lic Affairs)

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