A biennial report from the Congressional Budget Office (CBO) takes aim at TRICARE For Life (TFL), offering two proposals among its options to cut the deficit that would significantly increase costs for seniors using the TFL benefit.
Both TFL options would reduce the federal government's mandatory spending via unacceptable plans to shift health care costs from DoD to uniformed services retirees. Similar concepts have been presented in past CBO reports, which are issued every two years to provide information to lawmakers confronting budgetary challenges.
While these are not legislative proposals, MOAA believes we must address them as serious threats given recent cuts to the TRICARE pharmacy program and the series of TRICARE fee increases associated with military health system reforms.
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Here’s a look at each proposal.
TFL Enrollment Fee
TFL beneficiaries pay Medicare Part B premiums, but TFL enrollment is automatic, and there is no enrollment fee or monthly premium for TFL coverage. A CBO proposal would require Medicare-eligible beneficiaries who choose to enroll in TFL to pay an annual enrollment fee of $575 for individual coverage or $1,150 for family coverage.
The enrollment fees would be indexed to grow at the same rate as average Medicare costs in later years.
[FROM MOAA’S TRICARE GUIDE: Understanding Medicare and TRICARE For Life]
The other CBO measure would introduce minimum out-of-pocket requirements in TFL, including an $850 deductible – TFL would not cover any of the first $850 of a beneficiary’s Medicare cost-sharing. After the deductible was satisfied, TFL would cover only 50% of the next $7,650 in Medicare cost-sharing.
This means TFL beneficiaries could face up to $4,675 in cost-sharing per year. Similar to the enrollment fee proposal, cost-sharing requirements would increase annually at the rate of Medicare cost increases.
The cost-sharing option would also require TFL beneficiaries seeking care from military treatment facilities (MTFs) to make payments roughly comparable to the charges they would face at civilian facilities; this would reduce their incentive to avoid out-of-pocket costs by switching to MTFs.
Effects of These Proposals
CBO acknowledges these plans would discourage retirees from using their earned health care benefit. An enrollment fee would result in some beneficiaries foregoing TFL and switching to other Medicare supplemental plans.
CBO notes the out-of-pocket cost plan would reduce Medicare spending because higher costs would lead beneficiaries to use fewer medical services – even though seniors in the military health system already have slightly lower health care utilization than their civilian counterparts, according to DoD’s Evaluation of the TRICARE Program FY 2022 Report to Congress.
[RELATED: MOAA’s TRICARE Toolkit]
MOAA appreciates the importance of addressing the deficit, but our nation must fulfill its obligations to those who served a full career in uniform. We will fight any proposal that increases costs to seniors who rely on TFL for their health care. Most of these beneficiaries are on fixed incomes and cannot absorb hundreds or thousands in additional health care costs.
Equally important is protecting the future of TFL for current working-age retirees and career servicemembers. The TFL benefit was a key component of the compensation and benefits package that sustained the all-volunteer force throughout two decades of war – it must not be slashed just as the cohort that served their entire career during wartime is transitioning to retirement.
MOAA will fight any attempts to reduce the TFL benefit for retirees. Join us by telling your lawmakers to reject the CBO’s TFL proposals.
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