MOAA Concerned About Large Proposed TRICARE Fee Hikes

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The president released a FY 2017 budget request on Tuesday that includes $48.8 billion for the DoD Military Health System but would shift more of the cost burden to military beneficiaries.

...the TRICARE-reform plan laid out in the defense budget includes limited quantifiable benefit fixes mixed with numerous beneficiary fee hikes.

The president released a FY 2017 budget request on Tuesday that includes $48.8 billion for the DoD Military Health System but would shift more of the cost burden to military beneficiaries.

MOAA’s president, retired Air Force Lt. Gen. Dana Atkins, described the TRICARE-reform plan laid out in the defense budget as including limited quantifiable benefit fixes mixed with numerous beneficiary fee hikes.

“We were hoping to see some specific proposals to address well-documented problems with access, continuity of care, referrals, National Guard and Reserve programs and other documented health care issues, but so far, we’re left asking, ‘Where’s the substance?’ ” said Atkins.

He expressed concern that the proposed budget envisions a broad array of fee hikes, mostly affecting retired servicemembers and their families and survivors.

“We’ve been heartened by our discussions with leaders and staff members of the House and Senate that they’re focused on improving the health care benefit and the reform focus isn’t just about raising fees for beneficiaries,” Atkins said. “But the budget proposal seems to be mostly about the fees, with only a few sentences on possible program improvements.”

On the plus side, MOAA expressed support for the proposal to reduce the retiree cost-share for in-patient care, as well as initiatives to change copays to flat fees rather than a percentage of the bill.

“However, a number of proposals concern us,” Atkins cautioned. “Our initial assessment is that the full array of fee changes would mean about a $500 to $600 annual increase for retired families under 65 who use in-network providers and an increase of more than $1,000 a year for those using out-of-network providers. One obvious concern is how robust the network will be. One of the main access problems is that many doctors don’t want to be in the current network. We’d like some assurance that will be fixed.”

Atkins also cited MOAA’s concerns about proposals to:

  •     impose a new enrollment fee for beneficiaries now using TRICARE Standard and TRICARE For Life (which covers beneficiaries age 65 and older). MOAA believes enrollment fees should be reserved for programs like TRICARE Prime that provide guaranteed access standards, which the other programs do not;
  •     establish a new $600 family deductible for out-of-network care;
  •     means-test fees for TRICARE For Life beneficiaries, which MOAA calls unprecedented and inappropriate for service-earned health coverage, as it imposes escalating financial penalties for longer and more successful service on a population that already is paying the highest fees of any military beneficiaries;
  •     establish a multiyear schedule to double most pharmacy copays, which MOAA says already have been doubled or tripled in the past five years; and
  •     adjust fees with a medical inflation index that is projected to grow at more than 6 percent per year. MOAA says fees should be indexed to the same inflation measure used to increase military retired pay, as Congress already has done.

On the administration’s proposed 1.6-percent pay raise for 2017, Atkins said, “We’re disappointed this will be the fourth consecutive year of capping military pay raises below the average American’s. Congress spent a decade restoring military-pay comparability following the retention problems of the late 1990s, so we’re concerned about an evolving military pay gap. While the proposed 1.6-percent raise is slightly higher than the 1.3-percent raise for 2016, we need to put that in the context that each of the last seven military pay raises has been lower than any in the preceding 50 years.”

Another area of concern is the budget proposal to reduce funding for military commissaries by $221 million for FY 2017. “That’s perplexing,” said Atkins. “Last year, the administration proposed cutting $300 million for the budget as the first step toward privatizing commissaries. After Congress restored the funding, administration officials agreed that the benefit needs to be preserved, and they’d accept whatever level of savings might be realized by business efficiencies without reducing the benefit. To us, that’s inconsistent with proposing a $221 million cut. Without context, that seems considerably more than any efficiencies could be expected to generate in one year.”

MOAA’s thoughts on the military retirement proposals in the budget are closer to the Pentagon’s. Atkins said MOAA would be reluctant to delay the start of government matching of troops’ Thrift Savings Plan deposits until four years of service but strongly supports the proposal to continue the matching as long as the member is currently serving. “The current law that ends the military match after 26 years of service is inconsistent with any 401(k)-type plan we know of. For those who argue military careers should be longer, stopping the match at 26 years sends a contrary message.”

“It’s important to appreciate the budget submission is just the first step in a long process,” said Atkins. “MOAA and our partners in The Military Coalition will be working with leaders and staffs of the House and Senate Armed Services committees in the coming months in our ongoing efforts to improve access and other problem areas while doing our best to protect against imposing disproportional fee increases on those who earned their military health care coverage through decades of service and sacrifice.”

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About MOAA:
Military Officers Association of America (MOAA) is the nation’s largest and most influential association of military officers. With more than 390,000 members — active duty, former, retired, and National Guard and Reserve officers from all seven uniformed services and their spouses and surviving spouses — it is a powerful force speaking for a strong national defense and represents the interests of military officers and their families at every stage of their careers. For those who are not eligible to join MOAA, Voices for America’s Troops is a nonprofit MOAA affiliate that supports a strong national defense. For more information, visit http://www.moaa.org.

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