Senate Proposal Cuts Your TRICARE Benefit To Pay For Readiness

July 14, 2017

In a tale between two legislative marks, the gulf widens.

The Senate's mark for the 2018 defense authorization bill was revealed this week. The Senate aligned itself with DoD's budget request to increase pharmacy copayments and to repeal a grandfathered TRICARE fee structure, under the guise that it is too confusing and costly.  

This legislative proposal goes even further and aims to raise pharmacy cost shares even higher. By contrast, the House voted to maintain the current grandfathered TRICARE fee structure and pharmacy cost shares and maintain fee increases tied to COLAs. MOAA strongly supports the House proposal to stick with the current TRICARE fee structure, which prevents disproportional fee increases foisted onto military beneficiaries.

The fee increases proposed by the Senate are nothing short of an assault on beneficiaries' hard-earned benefits. Beneficiaries are being asked, again, to fund readiness accounts and other DoD projects with money out of their own pockets, rather than asking the broader base of American taxpayers for their support.  Sadly, this regrettable practice has become almost routine.  

The chart below compares TRICARE proposals from the administration, the House, and the Senate. 

TRICARE proposals fy18

Other provisions included in the legislation and supported by MOAA include:

  • A five-year demonstration project to examine the feasibility of offering Medicare Advantage customized for TRICARE For Life (TFL) beneficiaries. Medicare Advantage plans are offered by private companies that contract with Medicare to provide Part A and Part B benefits. Medicare Advantage plan options include health maintenance organizations (HMOs), preferred provider organizations (PPOs), and others. DoD will select certain markets and contractors for the demo. TFL beneficiaries will be either enrolled or may choose to opt out of participation.
  • An expedited process for evaluation and treatment of TRICARE beneficiaries requiring prenatal surgery.
  • Establishing specific TRICARE policy which states hospice care can be provided to beneficiaries under age 21. This is a provision MOAA has advocated for strongly.
  • Allows for the lower-cost TRICARE Reserve Select (TRS) health insurance for drilling Reserve and Guard members who are full-time federal employees.
  • Proposes DoD, the VA, and the Department of Health and Human Services create a pilot program to establish an integrated health care delivery system between the military health system and other federal and private-sector health systems.  

Steep Pharmacy Cost Share Increases

Regarding pharmacy cost shares, the Senate proposal goes much further than even DoD's proposed fee hikes. The intent is to raise fees to encourage beneficiaries to fill their prescriptions for free on base. This logic presumes most retirees -- who are, incidentally, the ones who use mail order the most -- live near a base; the large majority do not. These proposed fee hikes will hit TRICARE For Life beneficiaries and members of the reserve components the hardest.

A common example would be a retired beneficiary using TRICARE home delivery who is on three generic medications and uses one brand-name medication. Their current out-of-pocket cost share for a 90-day supply is $0 for the generic medications and $20 for the brand-name. Under the new proposal, their annual costs would increase, starting next year, from $80 annually to $232. Annual COLA increases would not even come close to covering these new costs.

The chart below demonstrates the rise in beneficiary costs over time that would result from this proposal:

TRICARE payments rise

Another rationale of their proposal is to bring mail-order generic medications to parity with retail generics by adding a $10 copayment for mail-order generics, which will rise to $14 by 2026. The current cost is $0. The end result: a military beneficiary's TRICARE pharmacy benefit becomes no better than going to Wal-Mart, as the display below illustrates. 

Senate Rx Fees

MOAA believes increasing these fees to pay for readiness improvements, fund other military personnel benefits, and fix the Widow's Tax (the Survivor Benefit Plan-Dependency and Indemnity Compensation offset) is a breach of Congress' inherent obligation to preserve and care for those who serve and have served. 


Don't bring back military pay caps

The administration's proposed budget calls for a 2.1 percent active duty pay raise. This falls short of the 2.4 percent pay raise projected by the Bureau of Labor and Statistics. Send your elected officials a message urging them to provide a full pay raise.

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