TRICARE shifts to new drug co-pay formula

Medicare-eligible beneficiaries won’t be the only segment of the military to see changes in mail-order and retail prescription drug plans on April 1.

Active duty families, under-65 retirees and their dependents are in line for a new co-payment plan for prescriptions filled off-base, under a Defense Department initiative to simplify the benefit and encourage greater use of generic drugs.

Military elderly will get an even better deal than they anticipated under the TRICARE Senior Pharmacy Program. Other beneficiaries will see their co-pays for off-base pharmacy options adjusted to match what seniors pay. That will mean lower costs for those able to use generic drugs. Some active duty family members will see drug costs rise modestly.

The full impact of pharmacy reforms won’t be known until sometime later when Defense officials are to unveil a "uniform formulary" of drugs that will be used throughout the military.

For now, the reforms are breaking in favor of beneficiaries. Prescription drugs for active duty members will remain free, and beneficiaries still will not be charged for drugs available through base pharmacies.

But on April 1, the Defense Department plans to adopt a new tiered co-pay arrangement for beneficiaries who can’t have their prescriptions filled on-base. Here’s how it the will work:

? All military beneficiaries using the National Mail Order Pharmacy — regardless of age, beneficiary category or TRICARE enrollment status — will pay $3 for a 90-day supply of a generic drug or $9 for a brand-name drug. Active duty family members now pay $4. So, under the new plan, they will save $1 if they buy generic by mail but will pay $5 more than they do now for a brand-name drug. Mail order is the best solution for maintenance medications.

? For short-term illness or when medicines are needed fast, beneficiaries will be able to use the TRICARE retail network. Again, the co-payment will be $3 for generic, $9 for brand medicines, but only for a 30-day supply. The mail order plan then, officials say, will deliver triple the value for patients with time to use it.

? Active duty family members who are enrolled in TRICARE Prime, the managed care network, now pay $5 per prescription filled by the retail network. Retirees and their families pay $9. Both stand to save on generic drugs under the April 1 co-payment plan, but active duty families will pay $4 more than they do now on name brands.

? Users of the TRICARE retail network who are not enrolled in Prime now have a co-pay on each prescription of 15 or 20 percent of the cost, depending on whether they are an active duty dependent or a retiree. They, too, will pay only $3 or $9 for 30 days worth of medicine.

? Any beneficiaries who must rely on a non-network pharmacy will pay $9, or 20 percent of the cost for a 30-day supply, which ever is greater. This option also has an annual deductible of $150 per person or $300 a family.

Two separate laws are behind the planned April 1 changes.

In the 2000 defense authorization act, passed last year, Congress directed the Department of Defense to streamline the pharmacy benefit through greater use of generic drugs, a simplified set of co-pays and a uniform formulary — a single, approved inventory of medicines — for use in base pharmacies, the mail-order program and the retail network.

Before officials could implement these changes, Congress this fall approved TRICARE Senior Pharmacy Program. Effective April 1, Medicare-eligible beneficiaries gain the same off-base pharmacy options available to under-65 retirees.

Medicare-eligible beneficiaries had been told that, starting April 1, 2001, they can use mail order to buy a 90-day supply of drugs for $8 or have prescriptions filled in the TRICARE retail network for a 20 percent co-payment. Instead, all National Mail Order Pharmacy users, including the elderly, will begin paying only $3 for generic drugs and $9 for brand names. The 20 percent co-payment for the retail network will, it seems, disappear for a time.

What’s the hitch?

If there is one, it could show up in that portion of the pharmacy reform law that officials won’t unveil until later — the uniform formulary. A shift to a tighter formulary would be significant because the modest co-pays, of $3 on generic or $9 on branded drugs, will not apply to "non-formulary" medicines, according to Defense Department documents.

For now, all drugs available through the National Mail Order Pharmacy and TRICARE retail are viewed as on the formulary. When that changes, and it will, prescriptions for non-formulary drugs, whether filled by mail or through the retail network, will carry a hefty co-payment, likely 20 percent of the drugs’ cost.

Moving to a Uniform Formulary is expected to reduce the number of medicines available by mail order and TRICARE retail, but expand the selection on-base. Officials have concluded that base pharmacies are the most efficient way to deliver the benefit, even though no co-pay is collected.

Medicare-eligible beneficiaries will be mailed information packets on the TRICARE Senior Pharmacy Program too, but only if their addresses are up to date in DEERS, the Defense Enrollment Eligibility Reporting System.