The congressional commission has recommended a complete overhaul of the military health system — one that does away with Tricare, changes the medical command structure and seeks to improve Defense Department coordination with Veterans Affairs.
The goal of the Military Compensation and Retirement Modernization Commission's recommendations, according to its final report released Thursday, is to preserve the quality of combat care that saved many troops' lives in Iraq and Afghanistan but also improve access to health treatment for those who use the system.
Read the report: Military Compensation and Retirement Modernization Commission
Under the recommendations, active-duty members and mobilized reserve component members still would receive medical care from the U.S. military, with easier access to specialty care in the civilian sector if they need it.
But their family members, and retirees under 65 and their family members, would receive health care through commercial insurers, similar to the plans run under the Federal Employee Health Benefits Program.
Active-duty families would receive an allowance to cover the cost of their insurance premiums, called the Basic Allowance for Health Care.
Retirees below Medicare-eligible age would pay their premiums out of pocket, although at a lower cost than civilian plans as "recognition" of their service, commission members said, .
The program would be run from the Office of Personnel Management, just as the FEHBP is, negating the need for the massive Tricare contract management and oversight structure that now exists within the Pentagon, according to the report.
But this would not be FEHBP, commission members stressed, because that program does not provide options appropriate for military beneficiaries with their unique requirements, including the availability of military treatment facilities and readiness demands, the commission wrote.
"By moving toward private insurance, beneficiaries of the plan would have improved access to health care. … It also solves some of the issues with mobilization and demobilization of reservists," said Bob Daigle, the commission's executive director.
The move to commercial insurance would save active-duty families money, according to data provided by the commission. A family with no members currently qualifying for Tricare Young Adult could save, in 2014 dollars, $457 a year if they decide to enroll in a health maintenance organization, $493 a year if they opt for a preferred provider network plan and $464 a year for a flexible fee-for-service plan.
The savings would be even larger for families with adult children, because they would not have to pay premiums for Tricare Young Adult, since the Affordable Care Act mandates that insurers allow dependents to stay on their parents' plan until age 26 if the insured has no access to employer-provided care.
For families who experience a catastrophic illness or injury, the commission recommended that DoD consider creating a program to help with those costs.
To preserve the viability of military hospitals and clinics and preserve the skills of military physicians, Tricare Prime service areas — those regions within 40 miles of a military hospital or clinic — would be disbanded, and military family members, retirees and veterans with civilian insurance would be allowed to use military treatment facilities on a discounted basis to attract patients, including those with challenging medical conditions.
"Allowing beneficiaries to choose from a selection of commercial plans … would improve the health benefits for military beneficiaries … [and also] create new tools with which DoD could attract patients to military hospitals," according to the report.
Tricare for Life beneficiaries would continue to have the same access to care they now have, under the plan.
The commission also recommended that DoD create a four-star Joint Readiness Command led by a four-star flag or general officer that would lead much of the portion of the Joint Staff responsible for readiness, including a subordinate joint medical function run by a three-star.
This structure, commissioners said, would improve coordination across the services in treatment, transportation and care for injured and ill troops.
"Joint readiness today is at a high level because we've just been through more than a decade of war. This seeks to preserve that function," Daigle said.
The recommendations also include changes to programs for beneficiaries with special needs, to more closely align them with state Medicaid programs — a codicil that advocates have pressed for in the past several years.
The commission also called for improving coordination between DoD and VA health services, to include creating a uniform drug formulary for smooth transition and monitoring of prescriptions, establishing standard reimbursement and complete the effort to create a joint electronic health record system.
Members estimate that the changes to the health programs could reduce the Pentagon budget by $26.5 billion from fiscal 2016 to fiscal 2020 and $6.7 billion a year in savings by 2033.
Commissioners said the savings would come from decreases in costs of providing health care benefits, decreased cost shares for some beneficiaries and increased cost shares for other beneficiaries, namely working-age retirees.
Unlike the retirement portion of the report, which would apply to new recruits if approved by Congress, the health care portion of the recommendations would affect all family members, retirees and their families — except for those on Tricare For Life — once they were signed into law.
Joyce Raezer, executive director of the National Military Family Association, said she polled 20 military spouses shortly after the report's release and said most were "intrigued" by the recommendations, adding that the military system is in dire need of an overhaul, and in the absence of that occurring, the prospect of choice is appealing.
"Generally, the option for choice in this arrangement ... they like that. The Tricare bureaucracy is cumbersome," Raezer said.
But the spouses added they would need help understanding their options and choosing plans — the kind of information that cannot be provided only to the active-duty service member.
They also wondered how such a system would work across state lines and overseas.
"The biggest concern is about education," Raezer said. "We have been educating the whole country about health care with the Affordable Care Act right now. This means we'd need to educate retirees and family members."