TRICARE Fees to get a Big Raise

June 2, 2017

Last week, DoD released its 2018 budget proposal. Unsurprisingly, the document included large increases in TRICARE fees across the board. Several groups escaped the proposed changes, including TRICARE For Life beneficiaries (no changes), active duty service personnel, medically retired servicemembers, their families, and survivors of those who died on active duty. This week, MOAA takes a deeper dive into what those fee hikes will mean for affected beneficiaries. 

The proposed fee increases will fall squarely on all other categories of beneficiaries not mentioned above. Retirees under the age of 65 and their families are hit hard; to a lesser extent, so are active duty family members who choose not to enroll in TRICARE Prime (for instance, many active duty troops with special needs family members). These fee increases are a direct result of the repeal of the 2017 National Defense Authorization Act's grandfathering clause. The intention of the grandfathering was to keep fees where they currently are for beneficiaries in the service prior to Jan. 1, 2018. (We highlighted this issue in last week's article, Back to the Future for TRICARE Fees .)

Where MOAA Stands

MOAA believes these fee increases are disproportional and do not reflect the service and sacrifice of the beneficiaries who have earned the health care benefit. These fee increases serve no purpose other than either funding DoD's readiness accounts or underwriting some other earned benefit - a recurring strategy we've seen in the past. For example, remember when pharmacy fee increases for beneficiaries were used to fund retirement reform for future entrants two years ago? 

DoD's healthcare costs continue to decrease, as evidenced by data in the below chart. The decrease can be seen in both purchased care and TRICARE For Life. MOAA's analysis is consistent with DoD's findings. We will continue to leverage cost stability as a positive, as opposed to an avenue for redistributing funds for other purposes.

Dod health costs decling

 

In addition to DoD's decreasing health care costs, MOAA believes Congress should maintain the grandfathered fee structures it put into law last year as part of the Military Health System reform, and that it should consider the following key concerns:

  • DoD has long set the precedent for grandfathering. The current change to the blended retirement system is one such example.
  • The new TRICARE Select network arrangement has not been proven to be just as robust as the current Standard option.
  • Making beneficiaries pay much higher fees for the same level of mediocre access is wrong. The focus is on driving more care into the military treatment facilities through higher cost incentives, before most promised access to care initiatives have been implemented or tested.
  • Tying all health care fees, including premiums and copays, to the National Health Expenditure (NHE) index, which is projected to grow at close to 6 percent a year. MOAA continues to believe fee adjustments should be capped at the annual COLA percentage.
  • The continued effort to escalate pharmacy copays, which have already doubled - and in some cases, tripled - over the past five years. These arbitrary increases already are more than double what people with no health insurance pay at Walmart for many generic medicines.  

What This Means to You

The tables that follow take a deeper dive into what these large fee increases will mean to beneficiaries. The projected increases, based on the cumulative effect of the NHE index, would result in the doubling and tripling of many fees and vastly outpace beneficiary COLAs.

With regard to the new TRICARE Select option, an established set copayment structure is favorable. However, beneficiaries should not be expected to pay any participation fee, let alone one three times higher than what Congress put into law, especially because access to care under the new TRICARE Select network has not been established yet.

FY 18 AD tricare fees

FY 18 Prime retired fees

FY 18 Prime retired with family fees

 

MOAA believes these fee increases are disproportional and do not reflect the service and sacrifice of beneficiaries who have earned this health care benefit. 

“We were happy with the Military Health System reform provisions Congress put into law last year. We hope they see fit to hold the line on those reforms, to include the grandfathering clause, before they allow any fee increases,” says MOAA President and CEO Lt. Gen. Dana T. Atkins, USAF (Ret). 

Please send your legislators a MOAA-suggested message to prevent these hefty fee increases from negatively affecting servicemembers and their families. 

 

 

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