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Every drilling reservist and National Guard member would have access to a military health plan for a reasonable monthly premium under an initiative endorsed May 3 by the House Armed Services Committee.

The improved Tricare Reserve Select benefit, which senior Defense officials oppose as too expensive, would take effect in 2008 and cost an estimated $3.4 billion over its first five years. It’s in the committee’s version of the fiscal 2007 defense authorization bill, along with language to derail the Department of Defense’s own plan to raise Tricare fees and deductibles for retirees under age 65 and their families.

The committee also embraced its personnel subcommittee’s plan to boost next January’s military pay raise to 2.7 percent, a half percentage point higher than the Bush administration had proposed.

The cloud in an otherwise sunny bill for Tricare beneficiaries hovers over the retail pharmacy program. The committee said it could not find enough offsets from other accounts to avoid DOD’s call to raise co-payments on generic and brand-name prescription drugs at Tricare retail outlets.

Indeed, it even tacked on an extra dollar to each charge. Co- pays in the retail program would jump from $9 to $16 for a 30-day supply of a brand-name drug and from $3 to $6 for generic.

To encourage greater use of the Tricare mail order program, which is far more cost-effective than retail, the committee voted to end all co-pays on formulary drugs obtained by mail. Currently, patients pay $9 for a three-month supply of brand- name medicine on the formulary, and $3 for generic.

Co-pays for nonformulary drugs, whether retail and mail order, would remain at $22.

The Senate Armed Services Committee was to complete its own version of the 2007 defense authorization bill by May 5.

Only last December, Congress ordered three tiers of premiums for the Tricare Reserve Select benefits, which are similar to Tricare Standard fee-for-service coverage. The first tier, which the House committee wants all drilling reservists to have by 2008, would set premiums at 28 percent of the health plan’s costs. It’s the same cost-sharing formula used for federal civilians.

Currently, only reserve component members who complete post-9/11 deployments qualify for the 28 percent premiums. Rate amounts for 2006 are $81 a month for individual and $253 for family coverage. TRS participants also pay usual Tricare Standard deductibles and cost-shares.

Eligible for the second tier are reservists and Guard members who lack health insurance because they are unemployed or self-employed, or because their employers have no health plan. Their premiums, under current law, are to equal 50 percent of program costs. That’s $145 for individuals and $452 for family coverage. Third-tier premiums are for reservists who have alternative health insurance but choose not to use it. They must pay 85 percent of TRS costs, roughly $245 a month for individuals and $768 for family.

Because Tricare officials haven’t been able yet to implement the three-tier offering yet, the House committee delayed its planned shift to the 28 percent premium formula for all reservists until 2008.

“That’s a big step forward,” said Rep. John McHugh, R-N.Y., chairman of the military personnel subcommittee.

McHugh said he and colleagues stopped the “most onerous part” of the DOD plan to raise Tricare beneficiary cost-shares by voting to block plans for raising enrollment fees and deductibles for working-age retirees at least until December 2007. In the interim, the committee wants a special task force to study costs and fee structures for the Tricare.

Because more than $700 million in Tricare savings were “embedded” in the administration’s 2007 defense budget request, the decision to block the increases meant trimming other programs. No more reductions or “offsets” could be found to prevent higher pharmacy co-payments, McHugh said. He called new co-payment plan for retail drugs a “tough compromise.”

Missouri Rep. Ike Skelton, ranking committee Democrat, couldn’t find the necessary cuts in so-called “mandatory spending” either. So he offered an unorthodox amendment to allow retail pharmacy co-pays to stay at current levels if retail users were willing to fill out some paperwork. His amendment would have earmarked $290 million in “discretionary” spending for the retail drug program from the next $50 billion wartime supplemental budget sent to Congress to fund operations in Iraq and Afghanistan.

Defense officials then could use that $290 million to make refunds to retail pharmacy users equal to the difference between current co-pays and the new co-pays planned.

Higher drug co-pays would impact any beneficiary who uses the retail network except active duty servicemembers. Skelton urged colleagues to consider how the higher fees could strap families, particularly those with have several children at a time on prescription medicines.

“A real concern here is the potential for adding to reasons for people not to re-enlist,” said Skelton.

McHugh said Skelton’s amendment, if approved, likely would give Tricare retail pharmacy users false hope that the higher co-payments have been avoided. After all, it would be up to Defense Secretary Donald Rumsfeld whether to pay the refunds.

“We all know that the secretary would never, ever do this,” said McHugh.

The committee rejected Skelton’s amendment 30-to-28, the vote dividing largely along party lines. One Democrat, Jim Cooper (Tenn.), voted against it. Three Republicans — Walter B. Jones Jr. (N.C.), Jo Ann Davis (Va.) and Jeb Bradley (N.H.) — voted for it.

To comment, e-mail milupdate@aol.com, write to Military Update, P.O. Box 231111, Centreville, VA 20120-1111 or visit: www.militaryupdate.com.

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