Military Update: Military groups divided over bump in Tricare fees
Stars and Stripes February 24, 2011
Lawmakers seeking guidance from military associations on whether to support the new Defense Department plan to raise Tricare Prime enrollment fees modestly for working-age retirees next year, and then to adjust them annually for inflation, will get mixed signals this time around.
Joyce Wessel Raezer, national director of the National Military Family Association, is not alone in calling the fee hikes of $60 a year for under-age-65 retiree families and $30 for individual coverage “amazingly reasonable.”
She noted that the higher fees would affect only the managed care program and the “most vulnerable” users -- those medically retired and surviving spouses – still would see no increase. No hikes are sought for the Tricare Standard, the traditional fee-for-service benefit, or for Tricare for Life, the prized supplement to Medicare available for elderly retirees.
Tricare fees haven’t been raised since 1995. Assuming increases are inevitable at some point, Raezer said, accepting these “surprisingly small” increases now, when the military is so deeply appreciated, is better than waiting until lawmakers come “looking for a peace dividend.”
But other associations remain committed to blocking any Tricare fee increase. Retired Army Major Gen. William M. Matz, Jr., president of the National Association for Uniformed Services, argues that the proposed hikes will the first of many. He said Robert Hale, under secretary of Defense, hinted as much last week when asked why the proposed fees are so small.
Congress, Hale said, has turned down “flat” more ambitious increases. “We are hopeful that, by starting slowly and [with] modest proposals, we will get their agreement,” Hale explained.
“I will admit, sir, it is a modest increase,” said Matz. “But you must look through it, around it, above and into it. This is a nose under the tent.”
Major veterans service organizations, including American Legion and Veterans of Foreign Wars, also oppose any fee increase. National Commander Jimmie Foster said the Legion is “proud of the fact that Tricare fees have never been raised in the 15-year history of the program.”
But some of the most popular organizations representing military retirees, all of which lobbied hard against past Tricare fee hikes, say they are “encouraged” by the new proposal and by what they perceive as a changed tone from senior Defense officials.
“Our belief is that if you keep putting your head in the sand and say ‘No fee increases ever,’ you take yourself out of the equation. People stop listening to you and eventually, given the deficit tide the country is facing, the budget change washes over you,” said Steve Strobridge, director of government relations for Military Officers Association of America.
MOAA, he said, “has never taken the position that there should never be a single dollar increase in health care fees. What we have always said is there needs to be a reasonable process” for setting and adjusting fees.
Absent such a process, Strobridge said, DoD went “for more than a decade not proposing any fee increases, which makes people believe there is never going to be any. And then, all of a sudden, a new defense secretary comes in and proposes tripling or quadrupling them. To us that was unacceptable.”
Defense officials, he said, finally seem to embrace arguments that their earlier plans for Tricare fees were unreasonable and failed to take into account that retirees have paid much of their cost for a promised lifetime health care benefit “up front” through unique hardships of military careers.
Under the new plan, working-age retirees would see Tricare Prime enrollment fees climb by 13 percent -- from $460 to $520 for families and from $230 to $260 for individual coverage. After 15 years, and with surviving spouses and medically retired members unaffected, Strobridge said, “it is hard to make the argument that that’s unaffordable.”
Raezer with NMFA said if Prime enrollment fees had been adjusted for inflation since 1995, using cost-of-living adjustments given to military retirees, the family fee today would be $652 and individual enrollees would pay $327 a year – or 25 percent more than DoD now proposes.
One feature of the plan that every military association seems ready to challenge is indexing Prime fees for retirees to “medical inflation.”
Joe Barnes, national executive director of the Fleet Reserve Association, noted that Defense officials, in briefing their plans, identified up to eight different indices that purport to track medical inflation. But the department hasn’t decided yet which one to use to adjust enrollment fees.
That doesn’t build confidence that any of them are right for tracking medical costs for this population of under-65 retirees, Barnes said.MOAA argues that annual adjustments to Prime fees for working age retirees should be set no higher than COLAs used to adjust retired pay.
On Capitol Hill, lawmakers have begun to choose sides. Matz said NAUS takes comfort in a vow from Sen. Jim Webb (D-Va.), military personnel subcommittee chairman, to oppose any Tricare fee hike.But in the House, Tea Party freshmen are looking to make cuts.
“They are primed to do everything about everything,” said one seasoned committee staffer. “I don’t know why this wouldn’t be on the list.”
FRA, like many associations, still is studying the proposed changes to Tricare, including adjustments to pharmacy co-payments. Barnes suggested FRA might support the Prime fee increase and indexing to retiree COLAs. But in return FRA could urge Congress to remove from the defense secretary his independent authority to raise Tricare fees when needed.
Congress granted that authority when it established Tricare in 1995. As a result, lawmakers on several occasions, all since 2006, have had to step in and block planned fee increases that most associations had opposed.To comment, send e-mail to firstname.lastname@example.org or write to Military Update, P.O. Box 231111, Centreville, VA, 20120-1111