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Higher Tricare fees among cost-cutting ideas

A Senate committee wrestling with ways to get the federal deficit under control is weighing recommendations from a nonpartisan arm of Congress that include increases in health care fees for retirees and their families, as well as limits on veterans’ health care benefits.

At a Senate Budget Committee hearing Tuesday, Sen. Kent Conrad, D-N.D., committee chairman, said the $11.6 trillion national debt is expected to more than double by 2019, with federal health care costs a key factor.

Conrad said he thinks even that forecast is “overly optimistic” and that the debt will be larger.

The Congressional Budget Office, a nonpartisan arm of Congress, has compiled a list of 115 options for changes in medical care programs, mostly ways to cut federal funding, that Conrad’s committee is considering as it tries to prepare a 2010 federal spending guide.

The options include raising enrollment fees, copayments and deductibles for military retirees younger than age 65 and their families using the Tricare health benefits program; requiring some veterans to pay copayments when being treated for medical issues not related to military service; and a novel idea of allowing active-duty families to pocket money — up to $500 each year — if they don’t use health benefits.

Also included is a cost-sharing idea for Medicare-eligible military retirees under which the government would not cover the first $525 of health care costs each year and provide limited reimbursement of the next $4,725 in costs, all in an effort to discourage unnecessary medical treatment.

That aim also is the basis for the CBO proposal to give $500 to active-duty families in a tax-free allowance that would be used to cover new out-of-pocket expenses for Tricare. It could be used to pay for insurance from other sources, such as a spouse’s employer-provided health care plan, or it could be pocketed if the family doesn’t spend it.

It was clear from the hearing that the costs of military and veterans health care programs are not the primary focus of lawmakers, who are more worried about spiraling costs for the Medicare and Medicaid programs.

However, the fact that Tricare fees have not increased since that program was created in the mid-1990s — despite constant calls by the Defense Department to raise deductibles, copayments and enrollment fees to cut military health care costs — is likely to get attention because other Americans are paying more for their health care.

Sen. Jeff Sessions, R-Ala., noted that between 2001 and 2007, health care premiums for average Americans increased by 78 percent, which he called an “unsustainable” and “unhealthy” trend.

The budget committee does not have the power to increase Tricare fees or change veterans’ health care benefits. Instead, its influence is in making recommendations on federal spending by preparing an annual revenue and spending plan that, if approved by Congress, sets limits for various programs.

A recommendation in the budget guide to cap military or veterans health care funding could force lawmakers on other committees to devise ways to reduce spending.