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Tricare fees must increase, DoD panel says

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 http://www.dodfuturehealthcare.net/images/Task_Force_Interim_Report_053107.pdf.