Update on TRICARE and Congress

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Six months ago in the Tricare debate between the Department of Defense and Congress, a task force had recommended gradually raising the Tricare Prime annual family fee from $460/year to $1260-$2460/year over the next five years. It’s been nearly 16 years since the last Tricare fee increase, and many veteran’s organizations are increasingly nervous that fee increases can’t be put off indefinitely. Their concern is that the longer it takes to raise fees, the harsher the jump will be. Military families are also worried that doctors will start refusing to treat Tricare patients due to low reimbursement rates.

So what’s new?

Last month the House Armed Services Committee voted to raise Tricare Prime family fees from $460/year to $520/year. This is much smaller than the bipartisan task force (and DoD) had initially proposed. Even if this 13% increase was repeated for four more years, the resulting annual fee would still be under $850.

In addition to the fee hike, the HASC proposed limiting future increases to the rate of inflation applied to retiree pensions. Retiree healthcare expenses would rise at no more than the COLA rate at which their pensions rise. This is substantially less than the DoD recommendation of tying fee increases to the National Health Expenditure Index.  The NHEI has been rising at more than 6% per year while the last 25 years of COLAs have averaged less than 3%/year.

Most importantly of all, the bill also would include wording expressing “the sense of Congress” that veterans make sacrifices which “… constitute pre-payment for health care during retirement.” Veteran’s organizations have affirmed for decades that recruiters and the chain of command have verbally promised lifelong healthcare (perhaps even free lifelong healthcare), and have lost the lawsuit at the Supreme Court.  (It wasn’t a total loss– one result was the Tricare For Life program for Medicare-eligible military retirees.)  The committee’s language doesn’t carry the force of law, but it’s expected to provide a policy precedent that would keep future Congressional sessions from abruptly hiking Tricare fees.

The HASC’s policy appears to have the support of the Senate Armed Services Committee, which two weeks ago approved similar legislation.  There would also be minor changes to Tricare copays for medications to make mail-order refills more attractive than pharmacy pickup.

Will these recommendations become law? It’s impossible to predict what could derail these proposals, but they’ve been hammered out by a number of veteran’s organizations and agreed to by the committees of both parties in both houses of Congress. In the past, this type of consensus has been passed into law by Congress and approved by the President. I think all the participants are happy to have put some numbers on the problems and, more importantly, to have created a policy designed to control future increases. Retirees are no longer locked into a healthcare war of attrition that they can only lose once.

Surprisingly, over the last few years, doctors have still been accepting Tricare patients. In fact, the number of Tricare providers in several states has risen.  Although this was expected to decline if Tricare fees and reimbursement rates didn’t go up, now the rising trend may continue.

In other news, retired Reserve/National Guard can now purchase Tricare Retired Reserve health insurance online.  It requires a visit to a Tricare Service Center or a VA office to get an account, but once that’s been achieved then the rest of the application can be completed online.

Related articles:
Reserves and National Guard: Tricare Reserve Select and Tricare Retired Reserve health insurance

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.

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