Officials Aim to Manage TRICARE Costs, Preserve Future Benefits

Modest increases to certain aspects of military health care will help to responsibly manage costs and ensure benefits for future service members, the assistant secretary of defense for health affairs said today.

“The truth of the matter is the spiraling cost of health care requires us to adjust some fees and co-pays -- fees and co-pays that really have not been adjusted since the TRICARE program was put into place in 1994,” Dr. Jonathan Woodson said. “This allows us to responsibly manage our costs while providing access to high-quality care and ensuring the benefit is there for those that might serve in the future.”

Effective Oct. 1, military retirees enrolling in the TRICARE Prime health plan began paying slightly higher annual fees, Woodson said. “The [TRICARE Prime] fee increases for an individual has only gone up, essentially, $2.50 a month,” he explained. “And for a family, $5 a month. [The] total cost is really modest in terms of the overall cost of the entire year.”

Those enrolled before Oct. 1, however, won’t see an increase in cost until fiscal 2013, he added.

Woodson said two groups of TRICARE beneficiaries would not experience any increases: people who are medically retired and survivors of deceased active duty sponsors.

Defense Department officials recognize the potential concerns regarding fee increases during tough economic times, he said.

“We understand, particularly in the current economy and set of fiscal realities, any increase in [out-of-pocket] costs would cause some concern,” he said. “But I would remind everyone there have been no fee increases since 1994.” Woodson also noted that not all co-payments and fees have risen.

“There have been some adjustments in co-pays,” he said. “In one category, actually, the fees have gone down, so [for] those individuals who have mail-order pharmacy benefits [and] previously paid $3 for generic drugs, … that fee will go away.”

Beneficiaries will see modest increases in other co-payments for brand-name drugs, particularly at the retail level, which will go from $3 to $5, he explained. Nonformulary drugs will rise from $22 to $25 for both retail and mail-order pharmacies. For brand-name drugs, the cost will remain the same -- $9 for the mail order pharmacy.

Another potential concern Woodson addressed was staff reduction.

“It will not affect the care, and it’s important to note that while we’ve been talking about adjustments in fees and co-pays, that is really part of a real comprehensive strategy to manage our cost,” he said. “We’ve taken a look at the administrative costs of TRICARE and reduced the numbers of so-called full-time employees and contractors to reduce the cost before getting to the point of increasing the fees.

“But none of this will decrease the service or the quality of care that beneficiaries will expect and receive,” he added.

The health affairs chief also said the department has taken a very “modest posture on the current recommendation and rollout of fee increases.” Woodson said no decisions have been made on future increases, and he re-emphasized that this is the first increase since TRICARE’s inception.

“I would like everyone to understand that because of the … cost of health care, TRICARE is trying to responsibly manage its cost and ensure that this benefit is available for the future for those that who will serve,” he said. “This does require some adjustment in fees, but we’ve taken a position to really only modestly increase these fees, understanding that those men and women who have committed to service in the nation’s military should have a more generous benefit than those in the civilian sector.”

By Army Sgt. 1st Class Tyrone C. Marshall Jr.
American Forces Press Service