Obama plan calls for new Tricare fee hikes - Army News | News from Afghanistan & Iraq - Army Times

Obama plan calls for new Tricare fee hikes

President Obama’s $4.4 trillion deficit-reduction plan proposes additional increases in Tricare pharmacy co-pays for military beneficiaries and would begin charging an enrollment fee for older retirees using Tricare for Life health benefits.

But the plan postpones any fundamental changes in military retired pay until yet another commission studies the issue.

A White House statement says the current 20-year military retirement system is outdated and needs an overhaul, but it pledges that any change should not apply to those already retired or currently serving.

Unveiled Monday amid bitter partisan fighting over economic policy, Obama’s deficit reduction proposal calls for a modest but a symbolically significant $200 annual enrollment fee for retirees aged 65 and older to receive military health care benefits.

The first-ever enrollment fee for Tricare for Life would take effect in fiscal 2013, which means no sooner than Oct. 1, 2012. The fee would generate $6.7 billion in revenue over 10 years, according to White House estimates.

Tricare pharmacy co-payments would increase to more closely match federal employee benefits under the Obama plan. A White House fact sheet says the changes would not apply to active-duty members, but would apply to all active-duty family members and all retirees, regardless of age.

Effective Oct. 1, Tricare beneficiaries having prescriptions filled at a retail pharmacy will pay $5 for generic drugs and $12 for a brand-name prescription, and $25 for brand-name drugs not on the preferred list. For mail-order prescriptions, the cost of a 90-day supply is free for generics, $9 for brand names and $25 for brand names not on the preferred drug list. Prescriptions are filled free at military pharmacies.

Obama’s proposal would raise fees to match the BlueCross BlueShield Standard plan for federal employees. At retail pharmacies, the beneficiary co-pay for a 30-day supply of drugs would be 20 percent of the plan’s allowable cost of generics and 30 percent of the plan’s allowable cost of brand name drugs, regardless of whether they are on the preferred list.

For mail-order prescriptions, there would be no co-pay for generics under the Obama proposal, although the federal plan charges $10 for a 90-day supply. For preferred brand-name drugs, a beneficiary would pay $70 for the first 30 prescriptions filled and $50 for any additional brand-name prescriptions, regardless of whether they are on the preferred drug list. In cases where the co-pay is higher than the actual cost of the drug, a beneficiary would only pay the actual cost.

The pharmacy changes would cut federal spending by about $20.6 billion over 10 years.

The White House fact sheet says the administration “supports a generous health care benefit” but says co-payments for military beneficiaries “have lagged behind other federal and private plans.”

Similarly, the fact sheet says an annual fee for Tricare for Life benefits is warranted because this program now has no premium, “unlike comparable services in the private sector.”

There has been much recent discussion about overhauling military retired pay as a cost-cutting measure, but the Obama plan includes no specific change. Instead, it calls for a bipartisan commission — similar to the one used to recommend base closings and realignments — to study retired pay and make recommendations for changes. Like the base closing commissions, the retired pay recommendations could be passed or defeated under expedited rules for consideration but could not be altered.

The White House statement supports some form of change, saying the 20-year military retired pay model “has served the military well in past years” but was “designed for a different era of work, and is now out of line with most other government or private retirement plans.”

It calls retirement after 20 years of service “generous benefits to the relatively few members who stay for 20 years,” which is the same position taken by government and independent commissions advocating a variety of changes.

To get the ball rolling, the Defense Department would have to send the commission a formal recommendation for altering retired pay, which the commission would use at the basis for its discussions.