Raise TRICARE Fees Or Deepen Force Cuts, Top Doc Warns

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Raise TRICARE Fees Or Deepen Force Cuts, Top Doc Warns


By Tom Philpott

If Congress blocks Defense Department plans to raise TRICARE fees for military retirees and beneficiary co-pays on drug prescriptions filled off base, the services will have to make even deeper cuts in force strength than now planned, the military's top health official told lawmakers Tuesday.

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"Given the constraints of the Budget Control Act, if no adjustments are made in TRICARE fees, and we don't achieve $12 billion-plus dollars in savings over the (five-year defense plan), additional force structure cuts will need to be made," Dr. Jonathan Woodson, assistant secretary of defense for health affairs, told the House subcommittee on military personnel. That's the reality "everyone needs to understand in these very difficult times," he said.

Woodson and his boss, Jo Ann Rooney, acting under-secretary of defense for personnel and readiness, defended the proposed 2013 personnel budget, including TRICARE fee increases, during a brief hearing that included bursts of criticism from Republicans on the subcommittee.

Republicans react

Rep. Joe Wilson, R-S.C., subcommittee chairman, challenged the mantra of military leaders in recent weeks, including Defense Secretary Leon Panetta and Army Gen. Martin Dempsey, chairman of the Joint Chiefs, that the 2013 budget "keeps faith" with service members and their families.

Wilson said, "the most disturbing budget proposals are the increases in health care premiums. And the increases are up to 340 percent" for some, he said — a reference to phased increases over five years targeting retirees who draw more than $45,178 a year in retired pay.

Rep. Austin Scott, R-Ga., a freshman House member, called the fee increases eyed for TRICARE Prime, the managed care option, "draconian." And then he struck a theme being adopted by several Republicans, that federal civilian employees too should shoulder higher health fees.

This administration, Scott said, holds "a general belief "» that health care should be free for everybody other than the people in the military."

Top doc's rebuttal

In fact, federal civilians pay substantial monthly premiums for health insurance, and the premiums increase yearly with health care costs. In answering Scott, however, Rooney simply noted that most TRICARE fees have been frozen since at least 1996. Last October, Prime enrollment fees for working-age retirees were raised by $60 a year and also indexed to inflation.

Rooney said that military leaders were involved in shaping the proposed fee increases and strongly support them.

Military endorsement

In a Jan. 25 letter to the armed services committees, every member of the Joint Chiefs as well as seven senior enlisted advisers endorsed the compensation "reforms" in the 2013 budget request. The letter called the proposed TRICARE fees and deductibles "comparatively moderate" and the higher pharmacy co-pays as trending "toward market rates." And beneficiary costs will "remain substantially less than those in the private sector."

In explaining the need for TRICARE fee increases, Rooney and Woodson echoed Panetta and other senior officials who point critics to the deal reached last year between Democrats and Republicans to cut defense spending by $487 billion over 10 years, and more than half of that in just five years. That deal became law in the Budget Control Act.

Robert Hale, Defense Department comptroller, said steps to control personnel costs, including a plan to trim active duty raises for three years starting in January 2015, must be judged "in the context of a congressional requirement that we take $259 billion out" of defense by 2017.

New governance

Last week, for internal media, Woodson outlined a new health care governance scheme but canceled plans to do so for military trade press and armed services committee staffers. The plan involves establishing a new Defense Health Agency that would streamline supply purchases and other common support functions across the Army, Navy and Air Force medical commands. But those commands would continue to operate separately.

Language in last year's defense bill places a hold on any major reorganization of military health care until the plan is presented to the U.S. comptroller general and its projected cost savings verified.

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