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Lawmaker seeks to prevent retirees from being forced off Tricare Prime

May. 15, 2013 - 02:29PM   |  
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Two Republican lawmakers introduced a bill Tuesday that would require the Defense Department to offer the Tricare Prime managed health care option in places where the department plans to discontinue the program on Oct 1.

The “Keep Faith with Tricare Prime Act,” sponsored by Rep. John Kline of Minnesota and Texas Rep. Mac Thornberry would provide a one-time choice for affected military retirees and their families to stay on Prime or choose Tricare Standard.

In a release, Kline said the bill “ensures our veterans are given the choice they earned.”

“Promises made should be promises kept and the Pentagon should not break faith with our nation’s heroes,” said Kline, a retired Marine colonel.

The Pentagon announced earlier this year it will shrink Tricare Prime areas to within 40 miles of active or former military bases, a move that will force 173,000 retirees and family members to switch to Tricare Standard.

According to the Defense Department, the cuts will save the government $45 million to $65 million a year, based on estimates that DoD pays an average of $600 more per year to provide Prime to a beneficiary compared to Standard.

Military retirees in Prime pay annual enrollment fees of $269.26 for an individual and $538.56 for families, and their co-pays for outpatient care are $12. Prime requires no deductibles.

Tricare Standard has no enrollment fees but carries greater out-of-pocket costs, including cost shares of 25 percent for retirees and annual deductibles for outpatient care of $150 for an individual and $300 for a family for retirees.

According to DoD data, a family of three using Tricare Standard averaged $2,075 in out-of-pocket costs for health care in fiscal 2009, while a similar family in Prime paid about $1,375.

Kline said his proposed bill, H.R. 1971, would help Tricare Prime beneficiaries on a fixed income who might not be able to afford the extra cost.

The legislation would “reduce the immediate impact imposed by the new policy by allowing military retirees to make informed decisions on how to best utilize their military retirement health care benefits while they consider future life decisions,” according to a statement released by Kline’s office.

“My legislation keeps faith with nearly 4,000 veterans in Minnesota and more than 170,000 nationwide,” said Kline, a House Armed Services Committee member.

The decision will affect retirees and their dependents in Prime, as well as those using Tricare Young Adult Prime. That totals 98,771 people in the Tricare South region, 37,404 in the North and 36,706 in the West.

The Tricare system was designed to maximize use of both military and civilian facilities, with an eye toward making optimum use of military hospitals and clinics.

In the 1990s, however, contract managers for the Tricare regions expanded Prime into areas not located near military bases at a time when managed care networks were thought to be a model for health care cost savings and health maintenance. In recent years, the entire Tricare South region has been considered a Prime service area.

Defense Department officials say things have changed.

“We basically have found that Prime is not a cost savings and not ... cost-neutral. When we first proposed doing this, we thought it would be cost-neutral at worst,” Dian Lawhon, Tricare’s beneficiary education and support division director, said in a teleconference with reporters in January.

Active-duty members and their families will not be affected by the impending reduction of Prime service areas; they can use Standard or enroll in Tricare Prime Remote, a program for those living in rural areas.

DoD has introduced a number of measures designed to rein in ballooning health care costs, including the reduction of Prime service areas and proposals in the 2014 budget to increase Tricare fees on all retired beneficiaries except those medically retired for service-related injuries.

The Congressional Budget Office, which does budgetary analysis of legislation, has not determined the estimated cost of Kline’s proposed bill.

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