TRICARE Fee Indices Matter

August 23, 2017

As always, before you sign anything, read the small print. This saying applies all too well to DoD budget submissions of the past few years - and now to the Senate Armed Services Committee's (SASC) 2018 defense authorization bill. 

TRICARE fee increases in the SASC bill are the same, if not worse, than those proposed in DoD's 2018 budget submission. If they are included in the final FY18 National Defense Authorization Act (NDAA), they will directly affect what you and your family will pay for health care.

In June, we wrote TRICARE Fees to get a Big Raise , outlining the DoD budget proposal. In July, Senate Proposal Cuts Your TRICARE Benefit to Pay for Readiness covered the SASC proposals. However, we would be remiss not to address the impact buried in the small print.

What's in the small print, you ask? Some not-so-small changes. According to DoD's own language, “Increases in premiums, co-pays, deductibles and catastrophic caps would increase annually based on the increases in health care costs as measured by the growth in the National Health Expenditures (NHE) per capita.”

Currently, TRICARE fees and applicable cost shares are tied to the annual rise in the COLA. Swapping this index out for an arbitrarily selected index, the NHE, will result in beneficiaries paying substantially more for health care over time - as shown in this chart:

National Health Expenditures

The compounding effects from this index, if applied, will gradually erode every category of TRICARE beneficiaries' earned health care benefits. MOAA strongly believes beneficiaries' TRICARE fees and cost shares should not rise faster than the annual COLA. The rate of inflation resulting from the NHE index is unacceptable.

 

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