40 miles for Tricare Prime — or maybe Tricare Standard

A reader asks:

What do you know about the 40 mile rule for Tricare Prime? Does it look like that circle will continue to shrink? Since a main reason we moved to our retirement location was for health care, I am concerned that the circle will force all of us to Tricare Standard. What is the word?

Great question. This 40-mile issue is just a symptom of a much bigger problem, and healthcare is a big part of every plan for financial independence.

Here’s the “bad” news: starting this October, Tricare Prime will start implementing their new standards of service– a goal that’s been delayed for nearly six years. DoD will no longer pay healthcare contractors to create Tricare Prime networks outside the 40-mile “vicinity” of military treatment facilities or base closure sites. The decision to implement these changes comes after the final resolution of years of contract disputes and litigation appeals. It also gives Tricare more time to notify affected beneficiaries.

30 minutes

To some extent, Tricare is getting back to where it should have been in 2007: helping beneficiaries access timely care without a long delay. The standard is that a primary care manager at a military hospital/clinic should be within a 30-minute drive of the beneficiary, and implementation has been under discussion for several years. Now enforcement is finally starting– sort of.

For some Tricare Prime customers, the “really bad news” is that they may be asked to switch to Tricare Standard. This switch could affect military retirees, family members, and survivors who are more than 40 miles from a military treatment facility or a base closure site. It’s estimated that this will include nearly 100,000 beneficiaries in the South Region, 37,000 in the North Region, and another 36,000 in the West Region.

The reason for this move is that DoD spends more money to set up Tricare Prime areas away from military bases than it would cost for Tricare Standard. Annual savings of cutting these networks is estimated at $55 million. There’s some question whether DoD is also taking this move to call attention to their opinion that Tricare Prime premiums are too low and restricted to rise at the rate of inflation. Part of the controversy is that some private sector healthcare systems are more cost-effective than Tricare Prime, but that discussion is far beyond the scope of this post.

Having said that, here’s some good news:

  • This change does not apply to active-duty servicemembers and their families.
  • Retirees and beneficiaries using Medicare and Tricare For Life are not affected.
  • Tricare is supposed to notify you personally if you’re affected.
  • Alaska residents may not be affected, but please verify this– that link is over three years old.
  • You’re able to request a waiver– or you may be asked to sign a waiver.
  • Tricare Standard might be a better deal than Tricare Prime.

40 miles and 100 miles

Those numbers are based on the 30-minute time limit for access to care.

For example, I live three miles from my clinic. I could walk there, but if I’m sick then it’s only a 10-minute drive. I can get a standby appointment or a last-minute cancellation and be there with very little notice. If I had to drive 40 miles then it might take me an hour each way. It’s a major logistics challenge when you’re feeling bad or when one of your kids is suffering. It gets old real fast if you have to go there every week for followup testing or therapy.

Here are the waiver rules for those outside the 40-mile limit:

  • If you’re outside the 40-mile limit then you can request a waiver from the Tricare regional office. They’re basing their limit on the 30-minute standard, so your waiver is more likely to be approved if your drive is actually under 30 minutes. You may have to show that the estimates on Google Maps or Mapquest are incorrect.
  • If you’re within 100 miles of any other Tricare Prime network then you can waive your rights to the driving-distance standard. However, this might mean that you’ll be joining a new Tricare Prime network with new doctors, which means that you may prefer to go to Tricare Standard.
  • If you’re more than 100 miles from any Tricare Prime network then you’ll probably have to change to Standard.

A couple more issues may apply to only a few Tricare beneficiaries:

Children covered under Tricare Young Adult will no longer be eligible for Tricare Prime if they’re more than 40 miles from a military facility. If they’re living away from you then they’ll need to check their own proximity and drive times.

Tricare’s West Region changes its contractor from TriWest to UnitedHealthCare on 1 April. If you’re more than 40 miles from one of the military bases in the West Region, there’s some skepticism that UHC will be able to set up a quality Prime network for just six months.

The 40-mile limit is actually determined by ZIP code, so you may end up getting a notification even if you’re “just” 39.9 miles from your base.

The expenses

If you’re affected by the change and want to stay with Prime, there’s the cost of the extra mileage on the car and the gas (admittedly only a few bucks per trip).

Then there’s the medical expense. The vast majority of Tricare Prime families pay nearly $540/year (plus a $12 copay) for coverage, whether or not they even set foot in the clinic. You’re paying for a network that promises to serve you in accordance with negotiated standards. In exchange, you agree to let them choose the doctor network.

Meanwhile, Tricare Standard lets beneficiaries choose their own doctors. (As long as the doctors accept Tricare Standard– and doctors know that Standard pays more than Prime.) Whether the doc is 10 minutes or 50 miles away, it’s your choice. You don’t have to seek Tricare’s referral for a specialist– you’re choosing whatever doctor you want to see. There are no annual fees or copays but there’s an annual deductible of $300 per family. You pay 25% of the allowable charge (some preventive care and immunizations are free) and you may do more paperwork than Tricare Prime. Both programs have the same $3000 annual out-of-pocket “catastrophic” cost cap.

The bottom line

Tricare surveys claim that patients are actually happier with Tricare Standard than with Tricare Prime.

You could consult a Tricare Standard doctor’s payments spreadsheet and do some math, but the decision boils down to a couple of factors: Are you a generally healthy family with only one or two doctor visits per year? Or does your local clinic see you so often that they’ve given you a personalized coffee mug in their break room? Is your doctor so good that they’re worth the long drive, or would you prefer more flexibility closer to home?

If you’re healthy then I’d go for flexibility and close to home, while hoping that Standard will cost less than the annual Prime enrollment fee. If you’re expecting to need chronic care then Prime is still a better choice, as long as the transportation logistics are bearable.

Tricare expects to start sending out the notification letters to affected beneficiaries before the end of February.

Is this the beginning of the end of Tricare Prime?

Getting back to the reader’s original question, is this 40-mile limit just the beginning of a collapsing circle? Will we all end up on Tricare Standard?

I think so. DoD is very unhappy with Tricare Prime premiums (and doctors are unhappy with the Prime fee schedule) but these geographic limits on care are time-consuming and expensive to negotiate. DoD wants more money to run Prime, but Congress (and beneficiaries) think that DoD could do a better job at managing the care and reducing fraud.

I suspect that over the next decade DoD will attempt to radically change the Prime management procedures or make more severe cuts. Instead of someday collapsing the circle to 35 miles or 28.73 miles, it’s more likely that DoD will work on other contractor incentives to reduce Prime costs. It’s even possible that DoD will try to scrap the Prime system altogether and revert to Tricare Standard. Hopefully, that will include online claims filing and payment– just like Medicare and civilian Medicare supplemental insurance companies.

Retirees and beneficiaries, in good health and below Medicare/TFL age, may prefer Standard. Instead of guaranteed annual fees they’ll face a lower annual deductible. They’re faced with the possibility of paying more if they need care, but they have the same cap as Prime. In the meantime they have far more flexibility to choose their doctors and they don’t need to deal with Tricare’s referral system.

Those needing routine care (below Medicare/TFL age) would likely pay more under Standard. Instead of a low annual fee they’d probably have almost $2500 of additional annual expenses. They’re probably already far away from a military treatment facility or a VA clinic, so it would be difficult to reduce their costs that way. The only alternative would be Tricare supplemental insurance that would hopefully cost less than the potential $2500 exposure.

Personally, I think that DoD has chosen to provide the absolute minimum level of retiree medical care that Congress (and we voters) will approve. 20 years ago DoD thought Prime was a good idea, and now they’re stuck with the bills. Even though Prime may seem like a cheaper option for us beneficiaries, the medical professionals are facing ever-lower reimbursement rates and unattractive incentives. If I have to choose between a Prime network that no doctor is willing to join, or a Standard network that makes both the doctor and me a little happier, then I’ll choose Standard.

As a military retiree, I won’t complain about “hard-earned benefits” and “broken promises” around civilians– not even around Reserve/Guard servicemembers. I’ve spent a lot of time reading about financial independence, and it’s common for civilian health insurance to cost hundreds of dollars per MONTH. Tricare fees seem ridiculously cheap compared to the civilian equivalent. We retirees have paid for Tricare Prime (some with much greater sacrifices) and we’ve earned it, but all that some people see is the price tag.

Whether you earn a military retirement or not, your financial independence is tied to affordable health insurance. If it comes from Tricare Prime or Tricare Standard, it’s still eminently affordable. I’d rather receive my care from doctors who feel adequately compensated for their time and expertise.

Related articles:
Tricare fee increases (October 2012)
Military Times: Tricare Prime to be eliminated in some areas
Medicare, Tricare For Life, Medigap insurance, and Congress
Book review: The Complete Idiot’s Guide to Social Security and Medicare

WHAT I DO: I help you reach financial independence. For free. I retired in 2002 after 20 years in the Navy's submarine force. I wrote "The Military Guide to Financial Independence and Retirement" to share the stories of over 50 other financially independent servicemembers, veterans, and families. All of my writing revenue is donated to military-friendly charities.

  1. You should look into this now that many, many military hospitals are closing. Also reconsider the “surveys” that are quoted. For my family (4 young kids) Prime is tons more cost effective compared to standard.

  2. Just came across this article after we received our letter in the mail about the Prime Service Area change. Trying to decide if Standard will be adequate care for our family with two little ones (age 3 and 2). Honestly, cost was the very first thing to come to mind. However, you make some great points in this article. Taking into consideration the relationship we’ve established with our Dr., I don’t want to drive 30minutes to receive less quality care from another provider simply because they may be affordable. Your other point about comparing Tricare coss to civilian healthcare cost is so accurate. My sister pays several hundred dollars a month for healthcare and a co-pay! I too see the handwriting on the wall, with the ever rising cost of healthcare, this current Prime system will be a hard sell. I recently read an article in Time Magazine called Bitter Pill: Why Medical Cost are Killing Us, and it asks the ever important question; Why are medical costs so high to begin with? Instead of fighting Tricare, beneficiaries and insurance companies need to team up and require hospitals and some providers to stop charging astronomical rates. (just my two cents…sorry if I went a little off topic.)

  3. We moved close to a military hospital because the doctors in our area would not accept TriCare Standard. At the military hospital we do not pay co pays.
    As my husband migrates to Medicare/Tri Care for Life, we are finding the same problem again- few doctors who will take him on.
    It is a mess.

    • I’ve always been treated well at our local military hospitals & clinics, but I’ve always felt as if I was taking up valuable time that could have been devoted to servicemembers and their families. I sure hope our local (civilian) clinic stays happy with Prime reimbursement rates, but something has to change.

      • If you were a service member, then you have EARNED the ability to use the military hospitals and clinics. No need to feel as if you are taking away from active duty. It is worth noting, that priority IS given to active duty whether you are aware of it or not. :-)

  4. Doug makes valid, though somewhat painful points. My husband and I have used Prime all our lives and changing to another health care option is daunting. I sure hope that TRICARE really is able to help everyone who is affected by this. Mostly that help must come from the managed care contractor call centers. They have to answer complex questions and help map beneficiaries to available providers. I think we need to revisit the success of this huge customer service issue after all affected people get the letters.

  5. Doug I heard about it last week. If a retiree is 40 mile from a military treatment facility they will be TRICARE standard vice Tricare Prime.

    Comment? Question? What's on your mind?