[HEALTH.MIL] 'Consolidated' Tricare: Higher User Fees, More Freedom

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  • Date: Fri, 14 Mar 2014 22:53:53 -0500

'Consolidated' Tricare: Higher User Fees, More Freedom

By Tom Philpott 


Published: March 13, 2014


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Tricare Prime, the military's managed care option for 5.5 million beneficiaries
who enroll for a modest fee to be guaranteed timely access to primary care,
would cease to exist within a few years under the "Consolidated Tricare" plan
proposed in the fiscal 2015 defense budget.

Networks of care providers, built for Prime, would not go away and neither would
their military patients, say architects of the plan.  Instead, patients and
providers would see Tricare transformed into a preferred provider network with
higher fees and more choice.

Patients could stay with current providers or exercise the freedom of a
preferred provider system to choose their own physicians.  Those who opt to find
new physicians would receive discounts on fees if they select doctors who remain
in the Tricare network.

Families whose care is managed by military providers under a "medical home"
concept could stay empanelled there, but would not be "enrolled," as under Prime
where every referral to a specialist needs pre-authorization.

The end of Prime, consolidation of Tricare as a preferred provider plan, plus
charts of higher fees and co-pays, are highlights of the plan to transform the
military health benefit, as delivered to Congress last week.

Fee increases would be more broad than deep, with some surprising exceptions.
For example, current Tricare for Life beneficiaries would be exempt from the
first-ever TFL enrollment.  Only retirees and family members who age into TFL
after the fee takes effect would be impacted, protecting the generation most
often promised free health care for life.

By fiscal 2016, new TFL users would be charged one percent of gross retired pay
but no more than $300 a year ($400 for flag officers).  The fee would rise to
two percent of retired pay by 2018, capped at $600 ($800 for flag officers).
Caps thereafter would be raised yearly to match inflation.

Also exempt from most fee increases would be medically retired service members
and survivors of members who die while on active duty.

One controversial change would be an annual "participation fee" for most
retirees under 65 to stay eligible for military health care.  As of Jan. 1,
2016, when consolidated Tricare is to take effect, the participation fee would
be set at $286 per individual, $572 for a family.  Those amounts simply would
match enrollment fees under Prime if had continued.

The participation fee and size inspired one critic to describe consolidated
Tricare as "Tricare Standard with an enrollment fee."

That description is off mark, said Army Maj. Gen. Richard W. Thomas, director of
healthcare operations for the Defense Health Agency, because it ignores the
"robust, high quality Tricare network of providers" that DHA vows to sustain,
and wouldn't have to do so under Tricare Standard.

"Beneficiaries will have access to tools we have brought online over the last
decade or so, to include Tricare Online which allows them to make appointments,
email military providers over a secure system, and obtain prescription drugs.
And importantly, beneficiaries who use military treatment facilities or network
care will have no deductible and substantially lower costs than those who select
the non-network, civilian only care [of] Tricare Standard today," Thomas said.

With Consolidated Tricare, beneficiaries could keep their providers and see
"slightly increased copayments for care, but these remain below Standard and
below most private health insurance cost-sharing levels."

Over the past eight years, every Pentagon plan to corral health care costs
focused exclusively on raising fees, co-pays and deductibles, with the biggest
pops aimed at working-age military retirees.  The Bush and Obama administrations
even used the same arguments, telling Congress its refusal to lift a freeze
beneficiary cost-shares from 1996 had made the triple option of Tricare Prime
(managed care), Extra (preferred provider discounts) and Tricare Standard
(traditional fee-for-service insurance) unsustainable.

 Despite such pleas, lawmakers still blocked substantial fee increases, allowing
only modest enrollment fee hikes for retirees enrolled in Prime and higher
co-pays on prescription drugs, particularly at retail outlets.

This year Defense leaders adopted a new playbook for Tricare reform, desperate
to find immediate health care savings because of budget sequestration and to
support the Military Compensation and Retirement Modernization Commission.  The
Joint Chiefs have joined in backing fee increases that are less severe than DoD
sought earlier, but are accompanied by profound changes to the Tricare benefit.

Total projected savings are $9.3 billion over the first five years, with almost
$4 billion of that from benefit consolidation rather than fee hikes.

Active duty members would continue to receive priority access to care at no
cost.  Other beneficiaries still would see their lowest costs on base, followed
by preferred provider care, and then care from outside the network.

A look at co-pays planned for outpatient visits touches on several
controversies.  Most retirees under age 65 and their dependents would face
co-pays for the first time at base clinics or hospitals: $10 for a primary care
visit; $20 for specialty care, $30 for urgent care and $50 for an emergency room
visit, a move intended to curb abuse of ERs to receive routine care.

The same working-age retirees and family members would face co-pays $10 to $25
higher using preferred providers.  To use out-of-network providers, active duty
family members would pay 20 percent of allowable costs and working-age retirees
and families 25 percent, as under Standard.

Working-age retirees would pay the annual Tricare participation fee even if they
use employer health insurance as first payer.  "But we may make exceptions to
that," said a senior DHA official. Higher prescription drug co-pays are the same
as proposed by the Defense Department last year.

Advocates for active duty families worry about a disparity in out-of-pocket
costs between those who would have access to military facilities at no charge
and those assigned far from base, or who can't gain access to military care, and
would face higher co-pays or even pay Standard-like cost shares.

A DHA official said some co-pay relief is planned, at least for members in
remote assignments with families.  They would have pay only network co-pays even
if they had to use out-of-network providers.  To do more for them, he said,
would be unfair to other families also facing higher co-pays.

Send comments to Military Update, P.O. Box 231111, Centreville, VA, 20120, email
<mailto:milupdate@xxxxxxx> milupdate@xxxxxxx or tweet Tom Philpott
<http://twitter.com/Military_Update> @Military_Update



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