[HEALTH.MIL] Beneficiary Rx Co-Pays Would Climb for a Decade

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Beneficiary Rx Co-Pays Would Climb for a Decade

Apr 19, 2013

Tom Philpott



Rahm Emanuel, while serving as President Obama's first chief of staff, once
advised not to let a "crisis go to waste" because that's when politicians will
do things they otherwise wouldn't.

Defense officials seem to have taken that advice to heart amid the current debt
crisis with their plan to boost co-payments on military family members and
retirees who use TRICARE retail and mail order pharmacies.

For starters, the current $17 co-pay collected at retail outlets for 30-day
prescriptions of brand name drugs found on the military formulary would jump to
$26 on Oct. 1, start of the new fiscal year.  The retail co-pay then would be
increased by $2 every October through 2017 and possibly for five years longer
because budget document refers to a 10-year phase-in plan.

Also on Oct. 1, if Congress allows, brand name drugs not on the
military-approved formulary would become unavailable using TRICARE at
neighborhood drug outlets except on a very limited basis.

Since last year beneficiaries have faced a co-pay of $44 to get a non-formulary
drug at retail. Under the administration's new plan, non-formulary drugs would
have to be obtained by mail order.  And that co-pay, for a three-month supply of
pills, would be raised from $43 to $51 this fall and would see annual increases
thereafter to reach $66 by fall 2017.

Meanwhile, the co-pay for formulary brand drugs via mail order would double from
$13 to $26 this October and increase by $2 to $4 annually to reach $34 by fall
2017.  Again, budget documents suggest five more years of phased-in increases
beyond 2017 though specific co-pays aren't shown.

Beneficiaries could continue to have prescriptions filled for free at base
pharmacies, and generic drugs would be filled at no charge by mail until 2017
when co-pays would begin at $9 per 90-day supply.  The current $5 co-pay for
generic drugs at retail outlets would be increased by $1 a year starting in
October 2014.

Last year's defense authorization bill had allowed some increases in drug
co-pays at retail and mail order.  Congress also authorized the department to
begin a pilot program that will require TRICARE for Life beneficiaries --
retirees and family members 65 or older -- to obtain all of their maintenance
drugs by mail order for at least one year starting this fall.

The new plan would shelve the pilot and require all retirees and family members,
regardless of age, to use mail order or base pharmacies for drugs to control
chronic conditions like high blood pressure and cholesterol. 


Congress can block these proposals, support them all or reach a compromise. They
are part of a larger TRICARE reform package that, as described here last week,
also calls for higher out-of-pocket costs to beneficiaries using TRICARE Prime,
Extra, Standard or TRICARE for Life.

Defense Secretary Chuck Hagel and Army Gen. Martin Dempsey, chairman of the
joint chiefs, defended the TRICARE increases during hearings over the past week
on the fiscal 2014 defense budget request held by the House and Senate armed
services and appropriations committees.

Hagel noted that survivors of service members who die on active duty and
medically retired members would be spared any TRICARE increases.  Also, if
Congress adopts these changes, said Hagel, a former enlisted combat veteran of
the Vietnam War, TRICARE "will still remain a very substantial benefit.  These
adjustments to pay and benefits were among the most carefully considered and
most difficult choices in the budget."

Hagel noted that raising TRICARE fees has the "strong support" of the joint
chiefs and senior enlisted leaders because they know that "to sustain these
benefits over the long term, without dramatically reducing the size or readiness
of the force, these rising costs need to be brought under control."

Earlier efforts to hike beneficiary health costs or take other controversial
cost-saving actions "met fierce political resistance and were not implemented,"
Hagel said.  "We are now in a completely different fiscal environment, dealing
with new realities that will force us to more fully confront these tough and
painful choices, and to make the reforms we need to put this department on the
path to sustain.military strength for the 21st Century."

Rep. Joe Wilson (R-S.C.), chairman of the House armed services subcommittee on
military personnel, has been part of the fierce resistance.  Last week, with
Hagel and Dempsey, he sounded like he would be again.

Wilson challenged their arguments that the $49 billion-a-year military health
care account is unsustainable, pointing to a $500 million surplus reported in
2011 and $709 million last year.  And Defense health costs grew by less than one
percent in fiscal 2013, Wilson said.

"My concern is that we know this is a great program.  TRICARE people are very
satisfied.  Military families appreciate this benefit.  Commitments have been
made to our veterans and to military families," Wilson said. "Why would we be
increasing fees when, in fact, the program is working well?"

Hagel responded that despite recent surpluses, the health care benefit over the
long term is unaffordable unless beneficiaries pay more.

Robert Hale, the Defense Department comptroller, warned Wilson that if Congress
again rejects higher TRICARE fees and co-pays, the projected savings of $1
billion in fiscal 2014 would have to come "out of readiness or modernization"
accounts.  Hagel, Dempsey and the service chiefs, Hale said, "feel strongly
[that] the right thing to do is a balanced approach to meeting our defense needs
with some modest increases in [TRICARE] fees."

Dempsey added later that he speaks often to service members and families who ask
why pay raises have to slow or tuition assistance might be cut or TRICARE fees
need to be raised in this tight budget environment.

"The answer is unless we look across the board at all the levers we have to
pull, whether its infrastructure, healthcare, pay and compensation, tuition
assistance, we'll have an extraordinarily well-compensated force that will be
sitting at Fort Hood, Texas, or at Camp Lejeune, [N.C.] unable to train" for
lack of funds.  "And therefore we will be putting them at risk."

To comment, write Military Update, P.O. Box 231111, Centreville, VA, or email
milupdate@xxxxxxx or twitter: Tom Philpott@Military_Update.




SOURCE:  Military.com article at




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