Military members who use Tricare would see out-of-pocket costs rise by $27 billion over the next decade under the administration’s plan to address the massive debt.
The plan would raise pharmacy co-payments at retail drug outlets and also apply the first-ever annual fee for Tricare for Life c
overage. It would protect existing members from retirement changes but would form a powerful commission to modernize military retirement for future generations.
Like base-closing commissions, the final recommendations would have to be wholly rejected or accepted. The president and the Congress could not make select changes.
The White House debt cutting plan, delivered to the Joint Select Committee on Deficit Reduction, confirms what advocates for Tricare beneficiaries had feared: They will be expected to share in the fiscal sacrifices to be asked of millions of Americans drawing federal entitlements.
Military associations sound equally alarmed by the rhetoric in the White House recommendations suggesting that key military benefits are just too generous and must be brought nearer to what civilians receive.
“Military service is unlike any other occupations, whether in government or the civilian sector,” said Joe Barnes, national executive director of the Fleet Reserve Association. Yet the White House now puts “a tremendous focus on trying to benchmark benefits associated with that service to what’s going on in the corporate world.”
“We were shocked at the tone of it,” said Steve Strobridge, director of government relations for Military Officers Association of America. “It talks about, basically, civilianizing the military benefits package. I mean it expresses that as a goal, which to us is absolutely anathema. The whole point of the benefit package is to provide an offset for unique conditions of military service.”
Two Tricare features are targeted.
Users of Tricare for Life the prized supplement to Medicare for beneficiaries 65 and older, would pay an annual fee, starting at $200 in 2013, with adjustments for inflation.
The White House notes that users now pay only the Medicare Part B premium, $110 a month for most, and pharmacy co-pays. Otherwise they face no out-of-pocket health costs. By contrast, private sector elderly, in 2009, paid on average $2,100 a year for their Medigap policy.
The annual fee would save $6.7 billion over 10 years.
The plan would save another $20 billion across a decade by raising pharmacy co-pays in the Tricare retail network, sparing only active duty members. Current co-pays “have lagged” behind other plans, it says.
Family and retiree drug costs at retail outlets would move “closer to parity with the most popular federal employee health plan, BlueCross BlueShield Standard, and closer to the health plans that most Americans have from their employers,” the White House report explains.
Federal civilians now pay about $45 to get a brand name drug at retail. Military beneficiaries pay $9 and it rises next month to $12. Obama also wants military drug co-pays to rise automatically with costs to the government, thus shifting from a set dollar co-pay to a percentage formula. So co-pays for generic drugs at retail would be set at 10 percent of the Defense Department’s cost for the medicine. Sometime after 2013 this would climb to 20 percent. Co-pays for brand names would start at 15 percent of cost and be raised to 30 percent over some yet unspecified period.
To comment, e-mail milupdate@aol.com, write to Military Update, P.O. Box 231111, Centreville, VA, 20120-1111 or go to: www.militaryupdate.com
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