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The House Armed Services Committee has voted to raise drug co-payments for Tricare beneficiaries who have brand-name prescriptions filled at retail pharmacies or through the Tricare mail order program.

The committee also voted to help control Department of Defense drug costs by requiring beneficiaries who are eligible for Tricare for Life (TFL), most of them elderly, to reorder all maintenance drugs through the Tricare mail order plan for at least a year, after which they could opt out.

The committee’s defense bill also would cap annual increases for retail and mail order drug co-payments to the percentage increase in cost-of-living adjustments for military retirees, thus ignoring the Obama administration’s plan to adjust Tricare fees and co-pays to keep pace with medical inflation.

As expected, the House committee declined to embrace most of the hefty Tricare fee increases proposed by the administration. Panel members weren’t keen even to debate the Tricare changes they were compelled to approve under lowered defense ceilings set by last year’s Budget Control Act.

The committee marked up its fiscal 2013 defense authorization bill (HR 4310) from 10 a.m. Wednesday to 2:30 a.m. Thursday, debating and voting on amendment after amendment. But no committee member, Republican or Democrat, challenged the planned increases in pharmacy co-pays or the provision to force elderly beneficiaries to get drugs for chronic conditions refilled by mail order.

This is an election year and those are sensitive matters. They weren’t even part of the military personnel subcommittee’s mark last week. They were unveiled Monday in the “chairman’s mark” with details present in a fact sheet that criticized the “dramatic” Tricare increases proposed by the administration and the committee’s “a different approach” for “ensuring fiscal responsibility while protecting the benefits earned by those who risk their lives to defend our nation.”

In his opening statement on final mark-up, Rep. Howard P. "Buck" McKeon (R-Calif.), committee chairman, said the $554 billion national defense bill for next year, plus another $88 billion for ongoing contingencies operations, was almost $4 billion more than the president’ requested.

He also conceded the House plan took “only an incremental step to address the military’s $46 billion decrease when considering where the President estimated national defense [spending] would be for fiscal year 2013 in last year’s budget.”

But, McKeon added, it will “protect the sacred covenant between our government and our all-volunteer military, keeping the promises we made to provide for the health and well being of our troops and their families.”

The full House will vote on the bill soon. The Senate Armed Services Committee will mark up its version of the defense bill in late May, and is expected to back more of the administration’s Tricare fee increases. Differences between the House and Senate bills then would have to be negotiated by a House-Senate conference committee later this year.

Prescriptions filled at base pharmacies are free for beneficiaries, but not all brand name drugs are kept in stock or included on the military’s drug formulary. At retail pharmacies in the Tricare network, beneficiaries now pay $5 for a month’s supply of generic medicine, $12 for brand name drugs on the formulary and $25 for brand names not on the formulary.

Both the House bill and the administration’s plan would leave the retail generic co-pay at $5. Starting in October, however, the administration would raise the co-pay at retail to $26 per brand drug on the formulary and would stop dispensing non-formulary drugs at retail outlets. The House committee proposes bumping the co-pay for formulary brand names at retail only to $17 and raising the non-formulary co-pay to $44.

Mail order would remain the better deal. A three-month supply of generic drug would continue to be dispensed at no charge under both the administration’s and the House committee plan. The current $9 co-pay for 90 days of brand name drug on the formulary would be raised to $26 under the administration’s plan but to only $13 under the House plan. The current $25 co-pay for non-formulary drugs filled by mail would jump to $51 under the president’s plan but to only $43 under the House plan.

The committee’s co-pay increases would take effect by Oct. 15 this year. Starting Oct. 1, 2013, co-pays would be adjusted annually by the percentage increase in retired pay, rather than be linked, as the administration proposes, to a medical inflation index which climbs faster.

The House committee ignores most other parts of the administration’s plan to raise out-of-pocket medical costs for military retirees including an annual enrollment fee for TFL and for Tricare Standard and Extra beneficiaries, higher enrollment fees for Tricare Prime, the managed care option, and higher deductibles for Standard and Extra. The size of the administration’s Prime fee increases would vary based on level of retired pay.

A committee fact sheet said the administration’s package of Tricare increases “went too far.” The committee decided to use the surprise plan to force TFL beneficiaries to use the mail order program to avoid steeper pharmacy co-pays and annual inflation adjustments called for under the administration’s Tricare reform package. The government enjoys deep discounts for drugs dispensed by mail.

The mail order requirement is described as a “five-year pilot program.” Impacted beneficiaries could opt out after one year if they don’t like home delivery. Also, the Secretary of Defense could waive the mail order requirement on individual beneficiaries as appropriate.

The House committee also calls for a three-year pilot program, at two or more military bases, that would attempt to use more modern processes to improve collection of reimbursements from “third-party” insurance plans for any care of covered clients who use military treatment facilities.

The bill also expresses the “sense of Congress” that retirees pre-paid for their generous healthcare benefits through years of service and sacrifice.

To comment, email, write to Military Update, P.O. Box 231111, Centreville, VA, 20120-1111 or visit:

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