DoD's Proposed Health Benefit Reform
The President's 2015 defense budget seeks to overhaul the current TRICARE system and create a new "Consolidated" system – essentially eliminating the three current programs (Prime, Extra and Standard), replacing them with a single system which would more closely resemble the Standard POS offering, but with some additional fees and premiums. According to the DoD's budget overview, the system would "leverage proven utilization management controls by building a shared commitment to health care while offering beneficiaries more flexibility and choices." A Simpler System that would provide beneficiaries with "open access to providers and less complexity in their health plan."
The DoD's proposed TRICARE overhaul includes the following key elements:
- No Change for Active Duty – There would be no change for active duty service members. They would maintain priority access to health care without any cost sharing and would still require authorization for civilian care.
- New Cost Shares – New cost shares will depend on beneficiary category (excluding active duty) and care venue and are designed to "minimize overutilization" of costly care venues, such as emergency departments. Cost shares would be the lowest in MTFs, higher in the network, and highest out of network. The new cost shares for in-network care will range from $0 for a clinical preventive care visit to $75 for a trip to the emergency room.
- New Enrollment Fee – Retirees (not medically retired), their families, and survivors of retirees (except survivors of those who died on active duty would pay an annual participation fee ($286 individual/ $572 family) or "forfeit coverage" for the plan year.
- Open Season Enrollment – Under a new open season enrollment, similar to most commercial plans, participants must enroll for a 1-year period of coverage or lose the opportunity.
- New Higher Catastrophic Caps – Catastrophic Caps would increase slightly but remain "sufficiently low" to protect beneficiaries from financial hardship. The participation fee would no longer count towards the cap. The new cap for a family will be $3,000 per person or $5,000 for the family.
- Fee Waivers for Medically Retired and Survivors – Medically retired members and their families and survivors of those who died on active duty would be treated the same as Active Duty Family Members with no participation and lower cost shares.
The 2015 defense budget proposal also includes the following changes:
- Increased Co-pays for Pharmaceuticals (excludes active duty service members). Designed to increase the use of mail order to refill maintenance medications. The co-pays for brand name medications will cost $26 in 2015 and increase annually, reaching $45 by 2024. Generics will hit $14 by 2024.
- Enrollment Fees for TRICARE for Life – Implements "modest annual fees" for TFL coverage, but the proposal will grandfather TFL beneficiaries in the program prior to enactment. The TFL enrollment fees will be phased in over a 4-year period and will be based on a percentage of the beneficiary's military gross retired pay up to an annual fee ceiling with indexing to retiree COLA after FY 2018. TFL fees will increase each fiscal year, capping out at $818 for flag officer retirees in 2019.
The new complicated charts for co-pays, cost shares, and new TFL enrollment fees can be found on pages 5-12 through 5-14 of the DoD's 2015 Budget Overview (PDF).
