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DoD health care money could run out in August

May. 15, 2013 - 02:36PM   |  
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The Defense Department could run out of health care money in August, with a risk of disruption in Tricare coverage, according to a new congressional report that looks at the governmentwide impact of sequestration.

The report, issued Wednesday by Democrats on the House Appropriations Committee, comes one day after DoD officials announced that 82 percent of the defense civilian workforce will be furloughed as a result of the $40 billion cut in spending required under sequestration.

“All military services indicated they will significantly reduce equipment and facilities maintenance,” the report says. “This will curtail the reset of equipment returned from Iraq and Afghanistan, and may create equipment shortfalls if forces have to respond to emerging contingencies.”

And, it warns, recovering from cuts will not be quick. “Longer-term effects will further degrade readiness, the morale of personnel and have macroeconomic effects,” the Democrats’ report says.

Effects of cuts on health care funding are unclear, the report says, but defense and service officials project a $2.6 billion reduction in the defensewide health care budget, with funding “likely to be exhausted” by August 2013.

Health care officials told the committee that to continue providing health care to service members, their dependents and eligible retirees, “priority will be placed on maintaining operations at the military treatment facilities,” the report says. However, civilian health care workers are among those facing furloughs.

The “main burden” of defense health care cuts “is likely to fall on Tricare contracts,” the report warns.

“To date, DoD has not provided specific plans on when or how Tricare contract payments may be deferred or whether Tricare network health providers will continue to provide care if payments are suspended,” the report says.

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