Health Care

Tricare consolidation, new fees on DoD wish list

The Pentagon's 2016 budget request revisits a proposal pitched last year — unsuccessfully — to consolidate Tricare into a single system, while also suggesting new fees designed to steer families away from using emergency rooms for routine care.

The $47.8 billion health budget request would do away with Tricare's current structure and replace it with a single system designed to encourage beneficiaries to seek care from military facilities or network providers — or pay more.

Like the plan introduced last year, the latest proposal calls for consolidating Tricare Prime, Tricare Standard and Tricare Extra into one Tricare program.

But unlike the plan floated last year, the new version would not increase co-payments or cost-shares for active-duty families seen at military hospitals and clinics or in the network.

But they would pay between $10 and $20, depending on sponsor's rank, for care they seek without a referral to a network physician — similar to the Tricare Extra option offered now, which gives a discount to family members who are not enrolled in Prime but choose to see a network physician.

Under the new plan, cost-shares for visits to out-of-network providers for family members would remain at 20 percent of the Tricare allowable charge.

But active-duty family members would pay new fees for using emergency rooms at military treatment facilities or civilian hospitals for non-emergent care, ranging from $30 to $70 depending on the rank of the sponsor.

When military families cannot get an appointment at their primary care physician for urgent care — either because appointments are full or they need care outside office hours — they often turn to military or civilian emergency rooms for primary care visits.

According to the budget documents, planners felt that the new fee structure provides options for active-duty families to get care at no cost when appointments are not available at their military treatment facility or through their primary care physician, minimizing the need for non-emergency visits to the ER.

For other beneficiaries, the fiscal 2016 budget proposal is strikingly similar to the plan floated in the 2015 budget, which made very little headway in Congress last year.

Retirees below age 65 and their family members would pay annual "participation fees," (currently called enrollment fees). Starting in 2017, annual fees would rise to $289 for an individual, up from $277.92, and to $578 for a family, up from $555.84.

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 services 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.

Future beneficiaries using Tricare For Life also would begin paying an enrollment fee for the program based on a percentage of gross retired pay — 0.5 percent in 2016 — and 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.

The budget also proposes increases to catastrophic caps. Active-duty families would see theirs rise to $1,500 for network or $2,500 for combined network and non-network visits, while all others would see an increase to $3,000 for network and $5,000 combined.

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 cost $8 at a retail pharmacy in 2016 and would remain at that level through fiscal 2018.

Brand names would rise to $28 per prescription, up from the current $17. Medications not on the Tricare formulary now are tightly restricted. While they cost $44 in 2014, they are available only on a limited basis now at retail pharmacies.

Costs for mail order prescriptions also would rise, to $28 from $16 for brand name medications in 2016. 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 $46.

Medications would continue to be dispensed free of charge at military pharmacies.

While Congress approved a small increase to Tricare pharmacy fees in the fiscal 2015 defense budget, Pentagon officials said the additional measures are needed to encourage more patients to use mail order and generic brands.

According to Pentagon estimates, the average active-duty family of three averages $13,615 in medical costs per year, with the military bearing $13,448 of the expense while the family picks up $166, or about 1.2 percent.

Under the new plan, families would bear 1.4 percent of the overall cost, which would drop to $13,584, accounting for flat health care costs and savings under consolidation.

A working-age retiree's family of three accrues $16,715 in medical costs per year, according to DoD, and pays $1,337, or 8.2 percent of the cost. Under the plan, they would pay $1,666, or 10.2 percent, of the estimated $16,302 cost.

Pentagon officials estimate that the initial changeover to a single Tricare plan would cost the department money — $100 million in fiscal 2016. But it would save $3.1 billion from 2017 through 2020, according to budget documents.

The fiscal 2016 defense health budget request is $108 million lower than the fiscal 2015 budget enacted by Congress. But when funds to support medical care for overseas contingency operations are included, the proposal represents an increase of less than 1 percent increase over the 2015 budget.

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