Retirees In New TRICARE Fight

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Retirees In New TRICARE Fight


By Tom Philpott

Older retirees, like Air Force Master Sgt. Floyd Sears, 81, stand shoulder to shoulder with younger retirees in opposing the higher fees being proposed for TRICARE benefits.

But Sears also agrees with many retirees that there's something especially wrong with the Obama administration's plan to impose a first-ever enrollment fee on 900,000 retirees age 65 and older and their surviving spouses.

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The oldest among them entered service in World War II or during the Korean War. This older generation of retirees truly was promised free health care for life if they would serve at least 20-year careers.

That promise of "free care" is why these retirees fought in federal court and in Congress, aggressively in the 1990s, to have the government acknowledge it and keep it. Even as the court fight was being lost, Congress by 2001 had approved TRICARE for Life (TFL), designed to be a cost-free insurance supplement to Medicare for older retirees if they agreed to pay – or in most cases, to continue to pay – their Medicare Part B premiums.

Given that history, Sears and other elderly retirees were surprised to see a new TFL enrollment fee proposed in February as part of multi-prong initiative to slow the growth of health costs.

"It's just a slap in the face," said Sears who retired in 1971 and receives $1,789 a month in military retirement.

The TFL fee, if Congress agrees to it, would be "tiered" based on level of retired pay. Retirees who draw less than $22,590 a year in military retired pay would pay $35 to enroll in TFL for the fiscal year beginning Oct. 1. The fee would climb to reach $150 by 2016. Thereafter it would be adjusted yearly.

Tier 2 retirees, with retired pay from $22,590 to $45,178 a year, would see an initial fee of $75, rising to $300 by 2016. Tier 3 retirees, those with retired pay in excess of $45,178, would pay $115 next October and $450 a year by 2016.

Fee increases are proposed for working-age retirees using TRICARE Prime, the managed care network, or Standard, the fee-for-service insurance option. The budget proposes saving billions of dollars by raising co-payments on drugs.

But last week Sen. James Webb (D-Va.), chairman the Senate armed services subcommittee on military personnel, appeared most concerned about what TRICARE for Life users already pay in Medicare Part B premiums.

Webb presented a bar chart showing that a retiree and spouse age 65 and older can pay together almost $7,700 a year in Part B premiums.

Dr. Jonathan Woodson, assistant secretary of defense for health affairs, said Medicare Part B premiums are means tested, and only couples with combined incomes of at least $428,000 a year would pay the highest premiums.

Most TFL beneficiaries, Woodson said, pay $1,200 a year individually, $2400 per couple, for Part B.

Webb said he wanted to look deeper into Woodson's argument that retirees contributed 27 percent of their total health care costs out-of-pocket when TRICARE began in 1996, and that their share has fallen to 10 percent today.

The fee increases proposed, Woodson added, would return retiree cost shares only to 14 percent of medical costs when fully implemented by 2017.

TRICARE officials later clarified that the 27 percent share of total costs paid in 1996 referred to average costs for a retiree under 65 with two dependents and receiving private sector care through TRICARE Prime or Standard.

Defense Comptroller Robert Hale made a separate argument for TFL fees. When the fees are fully phased in, Hale said, a Medicare-eligible retiree and spouse would pay an additional $300 a year if their retired pay fell under Tier 1, and $900 more a year for retired couples under Tier 3. He urged Webb to compare that cost to $4,000 a year that the same couple would pay to buy a Medigap insurance plan to replace TFL. Webb seemed unimpressed.

"We are talking about an obligation we made to people to provide them medical care for the rest of their life, based on a compensation package that begins the day that they enlist…," Webb said.

Hale urged Webb to "keep this in the context that we owe them not only good medical care, but we've got to provide training and equipment" to the force, "a balanced package."

"I totally agree with that," Webb said. "But what I am saying to you is you can't renegotiate the front end once the back end is done."

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