About 173,000 military retirees and family members would have the option to remain in Tricare Prime in areas where the Pentagon wants to discontinue the program Oct. 1, under House legislation taking shape this week.
The version of the 2013 defense authorization bill that will be considered by the House Armed Services Committee on Wednesday would allow those beneficiaries a one-time chance to stay in Prime as long as they continue residing in the same ZIP code where they opted into Prime.
The provision, introduced today by committee chairman Rep. Buck McKeon, R-Calif., is a response to a Pentagon announcement earlier this year that it will reduce its Tricare Prime managed-care program to locations within 40 miles of an active or former military base.
The announcement would force 173,000 retirees and family members to switch to Tricare Standard, a traditional fee-for-service health care program with higher out-of-pocket costs than Prime.
Late last month, Reps. Mac Thornberry, R-Texas, and John Kline, R-Minn., proposed legislation that would mandate the one-time opt-in.
Kline on Monday expressed enthusiasm for his proposal’s inclusion in the prospective defense bill.
“Promises made should be promises kept, and the Pentagon should not break faith with our nation’s heroes. ... I look forward to working with my House and Senate colleagues from both sides of the aisle to help those affected by the Pentagon’s misguided Tricare policy change,” said Kline, a retired Marine colonel.
The Pentagon says shrinking Prime will save the government $45 million to $65 million a year, based on estimates that DoD pays an average of $600 more per year to provide Prime to a beneficiary than Standard.
A family of three using Tricare Standard averaged $2,075 in out-of-pocket costs for health care in fiscal 2009, while a similar family in Prime paid about $1,375, according to figures provided by the Defense Department.
Nearly 100,000 Tricare Prime beneficiaries live in the Tricare South region; the remaining 73,000 are split equally between the North and West regions.
The Tricare system originally was designed to maximize use of military and civilian facilities, with an eye toward making optimum use of military hospitals and clinics.
In the 1990s, however, contract managers for the Tricare regions expanded Prime into areas not located near military bases at a time when managed care networks were thought to be a model for health care cost savings and health maintenance.
But that is no longer the case, according to DoD.
“We basically have found that Prime is not a cost savings and not ... cost-neutral. When we first proposed doing this, we thought it would be cost-neutral at worst,” Dian Lawhon, Tricare’s beneficiary education and support division director, said in a teleconference with reporters in January.
Active-duty members and their families are not affected by the impending changes or proposed legislation.