Defense Secretary Chuck Hagel, left, testifies Aprill 11 before the House Armed Services Committee hearing on the Defense Department's fiscal 2014 National Defense Authorization Budget Request. At right is Defense Undersecretary Comptroller Robert F. Hale. (Carolyn Kaster / AP)
Defense Secretary Chuck Hagel defended dramatic Tricare fee hikes included in the Obama administration's proposed 2014 budget on Thursday, telling Congress the changes “were among the most carefully considered and difficult choices” in the entire plan.
The budget calls for creating new enrollment fees for Tricare for Life, Tricare Standard and Tricare Extra health programs, and increasing deductibles and co-pays for prescription drugs, with the changes falling most heavily on working-age retirees under 65 and their families.
However, survivors of service members who die on active-duty and medically retired veterans would be exempt from the fee hikes, Hagel said.
“Even after the proposed changes in fees, Tricare will remain a substantial benefit,” he said.
The changes, which require congressional approval, are needed to hold down rising health care costs and were approved by senior military leaders, he said.
“They were made with the strong support of the Joint Chiefs of Staff and senior enlisted leadership, in recognition that in order 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,” Hagel said.
He described the changes as a return to the beneficiary cost-sharing ratio that existed when Tricare was created in 1993. For years after its creation, the Tricare fee structure did not change, and even the small changes approved by Congress in the past two years are minimal and fall far short of what the Pentagon has sought.
“Today, military retirees contribute less than 11 percent of their total health care costs, compared to an average of 27 percent when Tricare was first fully implemented in 1996,” he said.