Senate committee proposes Tricare reforms, balks at new fees for active-duty families

The House and Senate concur that the military health system should be overhauled starting in fiscal 2017; they just disagree on how to reach their similar vision for a system that serves more than 9 million beneficiaries.

The draft defense policy bill rolled out last week by the Senate calls for consolidating Tricare into two plans — the current Tricare Prime and Tricare Choice, a meld of Tricare Extra and Standard — and adds a Tricare supplement for beneficiaries with other health insurance.

The proposal is similar to the House’s draft bill, but the two bodies disagree on who should pay for revised benefits, with the House proposing to charge new beneficiaries, including active-duty families, an enrollment fee for all plans after Jan. 1, 2018.

The Senate version does not include any enrollment fees for active-duty personnel, and it phases in Tricare Choice fees more slowly than requested by the Pentagon in its proposed budget.

“We came to similar conclusions, but we didn’t go about it in similar ways,” a Senate Armed Services staff member said Monday. “[The House version] would implement for the first time ever enrollment fees for active-duty family members. This is not a place our senators wanted to go.”

Under both the Senate and House proposals, military retirees not eligible for Medicare will pay more for health care, regardless of which plan they choose.

New Tricare fees delayed, military health system would be reorganized under bill


The Senate has proposed that enrollment fees for Tricare Prime increase for these retirees by $68 per year for an individual and $135 for families starting in 2018 and increase each year by the same formula now used.

Retirees electing Tricare Choice would pay $150 for an individual and $300 for a family, increasing over five years to $450 per year for an individual and $900 per year for a family.

The idea, Senate staffers said, is to make “modest increases” to ensure that the Pentagon can sustain its health budget while improving quality.

“We get input ... every year, and their biggest issue was if we are going to tinker with the system, we had to increase the quality of care,” a staff member said.

The House bill also reorganizes Tricare, into the existing Tricare Prime and Tricare Preferred, similar to the Senate's "Choice." The House version has the same fee structure for those enrolled before 2018 until 2020, if the Defense Department meets certain standards for patient access and care.

After that, if DoD has proven it has met standards, retirees using Tricare Preferred would start paying an annual enrollment fee: $100 for an individual and $200 for a family.

And anyone enlisting after Jan. 1, 2018, would pay an annual fee, including the active-duty family members, of either $180 for an individual and $360 for a family for Tricare Prime, or $300 for an individual or $600 for a family for Tricare Preferred, under the House version.

Both legislative proposals also make changes to the military health system to "ensure medical readiness and streamline administrative structure," staff said.

The House would place oversight of the military medical facilities under the Defense Health Agency. The Senate has not released its specifics on the structural overhaul but hinted at creating a unified medical command, eliminating the service medical “stove pipes” and “realigning the DoD medical command structure” while shrinking headquarters staff.

For the first time, the Senate Armed Services Committee is proposing to fine beneficiaries who miss medical appointments. According to staff members, military beneficiaries missed 1.7 million appointments last year, including 700,000 active-duty or active-duty family member appointments.

Staff members did not say how much DoD would charge for the missed appointments; the bill language is expected to be released this week.

Health care hikes for retirees in Pentagon budget proposal


Pharmacy fees also would rise, under the Senate plan, mainly at retail pharmacies and for brand-names ordered by mail. The Senate supports the DoD’s nine-year cost table, which has prescription co-pays for brand-name medications rising incrementally to more than $45 per 30-day prescription by 2026.

But, staff pointed out, prescriptions would remain available at no cost through the military treatment facility, and generics also would be available at no cost through mail.

“Ninety-two percent of active duty live within a service area of a military hospital and clinic. ... What does that tell you? They can get free health care,” the staff said.

Agreeing with a Pentagon budget proposal to raise the catastrophic cap, the Senate version would increase the cap for active-duty families to $1,500 for network care, up from $1,000, and for retiree families, from from $3,000 to $4,000. Participation fees would not count toward the caps.

Both drafts must be approved by their respective legislative bodies and reconciled before becoming law.

Congressional reporter Leo Shane III contributed to this report.