An Air Force medical lab technician draws blood from an active-duty spouse at the Shaw Air Force Base, S.C., hospital. Under a new Pentagon proposal, care for active-duty family members would remain free, but they would pay new fees when obtaining care from civilian Tricare providers. (Airman 1st Class Daniel Phelps/Air Force)
Tricare Prime, Standard and Extra would go the way of the dodo, replaced by a single Tricare plan with a fee structure adjusted to where beneficiaries get medical care, under the Pentagon’s proposed fiscal 2015 budget.
The proposed $47.4 billion health care budget would consolidate the three major Tricare programs into a single program starting in January 2016.
It would introduce fees for retirees who use military treatment facilities, add enrollment fees for future Tricare for Life beneficiaries and increase prescription drug co-pays for nearly everyone who uses Tricare’s retail or mail order pharmacy benefits.
Pentagon officials say the biggest change, to consolidate Tricare, is aimed at encouraging beneficiaries to seek care from military facilities or network providers — or pay more out of pocket.
“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,” Defense Secretary Chuck Hagel said in unveiling the broad outline of the defense budget in late February.
The plan calls for increased “participation fees” — currently called enrollment fees — for retirees and their family members, higher catastrophic caps and cost-shares determined by where the care is received.
Active-duty service members would continue to get care from military physicians or facilities at no charge. Their families also would see no change in their costs as long as they go to a military clinic or hospital for treatment.
But co-payments for primary care would rise for active-duty family members who get care from network providers, from zero now to $10 for family members of sponsors in paygrades E-4 and below, and to $15 for family members of sponsors in grades E-5 and above.
Fees also would be created or increased for specialty care, urgent care and emergency room visits, ranging from $20 to $50 depending on the sponsor’s rank and the type of visit.
The cost of out-of-network visits for active-duty family members would rise to 20 percent of the Tricare allowable charge, up from the current 15 percent.
Retirees also would see changes, starting with enrollment fees: Beginning Jan. 1, 2016, annual enrollment fees would rise to $286 for an individual, up from $269, and to $572 for a family, up from $539.
Retirees also would begin making co-payments for services at military treatment facilities, ranging from $10 for a primary care visit to between $20 and $50 for specialty care, urgent care, emergency room and ambulatory surgery.
Visits to a network provider for retirees and family members would range from a $20 co-payment for primary care to $100 for a network ambulatory surgery visit.
For all out-of-network care, retiree cost-shares would remain at 25 percent of the Tricare allowable amount.
Deductibles for out-of-network care would rise for E-4 and below, to $100 for an individual from $50, and to $300 for a family from $150. For all others, the deductibles would rise to $300 for an individual from $150, and to $600 for a family from $300.
Catastrophic caps for active-duty families would rise to $1,500 for network or $2,500 for combined network and non-network visits, and for all others, to $3,000 for network and $5,000 combined.
And, reprising an idea it unsuccessfully floated last year, the Pentagon also wants to create new annual enrollment fees for Tricare for Life retirees. Current TFL beneficiaries would not have to pay the fee, but new beneficiaries would pay enrollment fees based on a percentage of gross retired pay — 0.5 percent in 2015 — capped at $150 a year for a family and $200 for retired flag and general officers.
By 2019, TFL enrollees would pay a fee amounting to 2 percent of gross retired pay, up to a maximum of $614. Flag officers would pay up to $818 by 2019.
Retirees in TFL also pay monthly Medicare Part B premiums.
Pharmacy costs would rise
One proposal that would touch all Tricare users would be future hikes in co-pays for generic prescriptions purchased through retail pharmacies and increases in brand name drugs, both at retail pharmacies and by mail.
Prescriptions would continue to be filled free for everyone at military treatment facilities and generic drugs also would be available at no charge through Tricare’s mail order system. Generics would continue to cost $5 at a retail pharmacy in 2015 but would rise to $6 in 2016.
Brand names would jump in 2015 to $26 per prescription, up from the current $17. Medications not on the Tricare formulary also would be tightly restricted; they currently cost $44 but would be available only on a limited basis starting in 2015.
Costs for mail order prescriptions would rise, to $16 from $13 for brand name medications. Unlike retail pharmacy prescriptions, medications filled by mail are for 90 days. Nonformulary medications would still be available by mail, with co-pays rising to $54 from the current $43.
According to Pentagon estimates, the average active-duty family of three accrues $11,459 in medical costs per year, with the military bearing $11,301 of the expense while the family picks up $158, or about 1.4 percent.
Under the new plan, families would bear 3.3 percent of the overall cost, which would drop to $10,952, accounting for flat health care costs and savings under consolidation.
A working-age retiree’s family of three accrues $14,813 in medical costs per year, according to DoD, and pays $1,378, or 9.3 percent of the cost. Under the plan, they would pay $1,526, or 10.8 percent, of the estimated $12,626 cost.
Pentagon comptroller Robert Hale said Tuesday if Congress does not approve the changes to compensation proposed in the budget plan — not only the Tricare changes, but also changes to housing allowances, basic pay raises, the commissary benefit and more — the Defense Department would see a $2.1 billion budget shortfall in fiscal 2015 that could grow to as much as $30 billion by 2024.
When asked what reception he thought the budget would receive on Capitol Hill, Hale demurred.
“I don’t want to get inside their heads. ... I think that they realized there needs to be a balanced package here,” he said.