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Tricare Military Retiree Costs Would Jump in Budget Plan

11:02 AM, Feb 28, 2012   |    comments
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By Patricia Kime/Navy Times

Pentagon officials will continue pressing in 2013 for significantly higher Tricare fees for military retirees, including older retirees covered by Tricare for Life, as well as higher drug co-pays for all Tricare beneficiaries.

The Defense Department's proposed 2013 budget calls for annual enrollment fees for retirees in Tricare Prime to rise next year by 30 percent to 78 percent, from the current $460 or $520 for families to between $600 and $820, depending on military retirement income.

"Working-age retirees" - those younger than 65 - also would pay annual enrollment fees for Tricare Standard and Extra: $70 for an individual and $140 for a family. These would be the first enrollment fees for Standard and Extra in Tricare history.

Deductibles for Standard and Extra also would rise by $10 for individuals and $20 for families.

Proposed changes

Medicare-eligible retirees also would contribute more to their care: The budget calls for annual Tricare for Life enrollment fees of $35 to $115 per individual, depending on retirement income. A retiree and a spouse covered under TFL would each have to pay the enrollment fee.

Tricare for Life beneficiaries currently pay no enrollment fees but are required to enroll in Medicare Part B, which carries premiums of $99.90 a month.

Military advocacy groups said they understand the budget constraints facing DoD but feel this proposal "passes the buck" to beneficiaries.

"We take issue with the Pentagon's decision to raise fees for beneficiaries, relying on them to pay for the budget when it's the department's responsibility to increase efficiencies and cut their own costs," said Kathy Beasley, health care committee co-chairwoman for the Military Coalition, an umbrella group of more than 30 national military associations.

The groups also are concerned about the Pentagon's call to link fee hikes to retirement income and index future increases to the medical inflation rate, which tends to rise faster than overall inflation or the annual cost-of-living adjustment in military retired pay.

When lawmakers last year approved the first fee increases since Tricare was created in the mid-1990s, they limited future hikes to the retiree COLA. The most recent COLA increase was 3.6 percent; medical inflation typically rises by 6 percent or 7 percent a year.

"These new increases, coming on top of last year's changes, are a classic 'bait and switch' that would raise beneficiary fees by as much as $1,500 a year or more," said retired Vice Adm. Norb Ryan, president of the Military Officers Association of America.

Another proposed change would boost pharmacy co-pays on brand-name drugs, a move designed to encourage patients to buy generic versions or fill their prescriptions at military treatment facilities.

Under the plan:

• Co-pays at retail outlets would remain $5 for generics but would more than double next year to $26 for brand names, then go up $2 per year through 2017. Co-pays for drugs not listed on Tricare's formulary would be decided on a case-by-case basis.

• Generic drugs obtained by mail would remain free for a 90-day supply, but brand names would increase next year to $26 from $9 and rise by $2 a year through 2017. Nonformulary drugs would cost $51, up from $25.

Pentagon Comptroller Robert Hale said the proposals reflect DoD's commitment to military families. He added that the tiered approach directs those with greater means to pay more for their health care.

Tricare "will still be quite generous compared to the private-sector plans, Aetna or Blue Cross Blue Shield. We still think it's generous, as it should be, but we feel we need to move in that direction," Hale said.

The enrollment fee hikes would not apply to survivors of military members who died on active duty or medically retired troops.

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