Deputy Secretary of Defense Ashton B. Carter (Colin Kelly / Staff)
Tricare could face a $2 billion to $3 billion shortfall if the across-the-board budget cuts known as sequestration take effect March 1 leaving medical bills for many family members and retirees unpaid, officials told Congress on Feb. 12.
Deputy Defense Secretary Ashton Carter told the Senate Armed Services Committee that the Pentagon will "protect operations of military treatment facilities in order to maintain readiness of active-duty forces," but Tricare providers could feel the impact at the end of the fiscal year.
"Under the scenario that we all fear so much, by the time we get to the end of the year, we're out of money," Carter said.
Pentagon officials provided few hard details about potential plans to trim expenses and avoid the cash crunch.
"It's very hard to cut back health care the way you can cut back depot maintenance or training because you can't just tell people they can't be sick," Carter said.
He added that Tricare may postpone some payments to health care providers until fiscal 2014.
The Defense Health System accounts for roughly 10 percent of the Defense Department budget. In fiscal 2012, it was $53 billion, up more than 200 percent since 2001.
Sequestration would trim 9.8 percent off Tricare's budget, about $5 billion.
Tricare provides health care to 9.6 million beneficiaries, including nearly 1.5 million active-duty service members and 1.75 million family members. The rest are activated National Guard and reserve members and their families, retirees and their families and survivors of those who have died on active duty.
Under sequestration, most defense agencies will implement a civilian hiring freeze, lay off temporary and term employees and furlough civilian employees one day a week for up to 22 weeks, Carter said.
During congressional hearings the week of Feb. 11, Pentagon Comptroller Robert Hale, one of the officials responsible for sequestration planning, said the way to deal with the problem is to keep it from happening.
"The best way by far would be to de-trigger this. You heard it repeatedly, but let me just add my voice to that. We need not to do this," Hale said.
Many lawmakers agree, and several proposals have been floated to stop the cuts. But some lawmakers also chide the Defense Department for failing to plan.
"We've been after the Pentagon for well over a year to give us the specificity of what this would actually mean and we were constantly told, ‘We can't get that information, because we haven't done the planning,'" said Rep. J. Randy Forbes, R-Va. "It would have been a lot easier for us to persuade Congress to [avoid sequestration] had we had that specificity months ago."