The Pentagon’s proposed 2015 budget, unveiled Monday, includes a surprise proposal to raise health care fees for active-duty family members which, if approved, would mark the first increases in health care costs for those beneficiaries since Tricare was established nearly 20 years ago.
Under the plan, the proposed fee increases — expected to come in the form of higher deductibles and co-payments — would affect both active-duty family members and retirees and their families.
Defense Secretary Chuck Hagel did not provide details on the proposals, but said they are designed to encourage Tricare beneficiaries to get health care from facilities and doctors who operate at lower cost to the government, such as military treatment facilities and preferred network providers.
“We will ask retirees and some active-duty family members to pay a little more in their deductibles and co-pays, but their benefits will remain affordable and generous … as they should be,” Hagel said.
In addition to adjusting deductibles and co-pays for nearly all beneficiaries except active-duty members, Tricare beneficiaries also would see their Tricare options “consolidated” and their prescription co-payments increased.
Defense officials have said that when Tricare was established, beneficiaries paid for roughly 27 percent of their medical costs out of pocket, with DoD paying the rest.
But because no mechanism was built into the program to account for inflation, the steady rise of health care costs and the frozen enrollment fees and co-payment structure have led to beneficiaries today shouldering only about 11 percent of health care costs.
In an interview with Military Times, Defense Health Agency acting deputy director Al Middleton said the time might be right for Congress to approve “minimal” fee increases, given that the Pentagon has asked for increases each y ear since at least 2007.
“Maybe, there is little more appetite for something a little bit more to take place,” Middleton said.
Even medically retired service members and their families as well as survivors whose military sponsors died on active duty would see slight increases. While they would be exempt from the proposed annual enrollment fees and would pay a “smaller share of the proposed co-payment increases,” they still would see increases, according to Hagel.
Active-duty family members currently pay no enrollment fees for Tricare Prime, the DoD’s managed health care program or Tricare Standard, a traditional fee-for-service program.
Under Prime, they must use either a military treatment facility or a network provider for primary care and get referrals for all specialty care.
Under Tricare Standard and Extra, active-duty family members in paygrades E-4 and below pay a $50 deductible for an individual or $100 for a family, while those in grades E-5 and above pay $150 for an individual and $300 for family.
When using a network provider, they also pay 15 percent of the negotiated fee after meeting their deductible; if they go to a non-network provider, they pay 20 percent of the allowable charge after meeting the deductible.
Military retirees pay annual enrollment fees for Tricare Prime of $273.84 for an individual and $547.68 for a family. They have a deductible of $300 for an individual and $600 for a family if they use the point of service option under Tricare Prime.
Under standard, they have a $150 deductible for an individual and $300 for a family, and pay 20 percent of the negotiated fee at network providers after meeting the deductible and 25 percent of the allowable charges at a non-network provider after meeting their deductible.