Tricare and health reform: What it could mean in the long run - Getting out, military health issues - Navy Times

Tricare and health reform: What it could mean in the long run

Defense officials insist that the new national health care reform law has no direct effect on Tricare — but some analysts say indirect effects eventually may surface.

“Tricare benefits will not be affected at all by the passage of reform,” Charles Rice, acting assistant secretary of defense for health affairs, said at a March 24 congressional hearing — the day after President Obama signed the bill into law.

But while that assertion seems fairly sound for the near term, military advocacy groups say the law’s potential interaction with the complex family of Tricare plans over the longer term is vague, and could lead to future cost or coverage encroachment on the valuable benefit that serves 9.6 million beneficiaries.

Some lawmakers agree. A House bill already has been unanimously approved to certify that Tricare meets the new law’s definition of “adequate” coverage, so beneficiaries will not be penalized or forced to seek other coverage. Similar legislation is pending in the Senate.

But many aspects of reform don’t kick in for months or even years — the mandate to provide coverage to 32 million uninsured Americans, for example, doesn’t begin until 2014.

That creates uncertainty about whether additional unintended consequences could emerge to affect Tricare down the line.

On its Web site, Tricare acknowledged as much, saying it had “not received official notification” about the impact that the new law could have on beneficiaries. But in a subsequent news release, it said the law “will have no adverse effects on our program” and notes the reform law leaves Tricare operating under its existing separate law, under Pentagon authority.

Immediate policy concerns aside, some health care analysts say Tricare eventually could end up competing for already-scarce providers with the new state-based health care exchanges that will be created under the reform law for the uninsured and self-employed.

To further muddy the picture, Tricare could be changing two of its three primary contractors in 2011 — meaning new contracts would have to be renegotiated with 66 percent of current Tricare doctors and other providers.

Tricare could be facing “the perfect storm,” said Barbara Cohoon, the National Military Family Association’s deputy director for government relations.

Tricare Management Activity officials declined multiple requests from Military Times to discuss these and other issues related to health care reform.

Worries about rising fees

One particular concern is rising fees. Tricare’s reimbursement rates to private caregivers generally are tied to those of Medicare, and many doctors say Medicare’s reimbursement rates already are too low.

That raises concerns that the Pentagon may one day have to shore up Tricare’s reimbursement rates by increasing its already considerable funding support for the program or raising patients’ fees and co-pays — or both — to keep private-sector doctors from dropping Tricare-eligible patients if they think they can make more money treating the influx of private-sector patients that will be generated by the reform law.

If reimbursement rates for care are higher in the health care exchanges, for example, more providers might gravitate toward that population, Cohoon said.

“We won’t really know until we see how the [health care] exchanges shake out,” she said.

Tricare fees have not increased since the program’s inception in the mid-1990s. The Pentagon, concerned about skyrocketing health care costs, has pressed for increases but has been repeatedly rebuffed by Congress.

One area that could become a particular concern in the health care reform era, Cohoon said, is family practice providers, who are already in short supply, both in Tricare and nationwide.

Americans lacking health care coverage have tended to use emergency rooms more than those with insurance. Now, these new health care recipients will enter the health care system at a central point — and family practice providers are a main entry point.

“There aren’t enough family practice doctors to go around as it is,” Cohoon said. “Coverage does not equal access to care. Providers can only take a certain number of patients.”

For now, however, the bottom line for Tricare beneficiaries is that nothing will change.

Cohoon said Tricare officials have told her that they continue to study the new law, but see no immediate need to alter their program.

Your questions answered

Q. Will Tricare fees increase under health care reform?

A. Not as a direct result of the new law — but that does not mean fees will never change.

The Defense Department has been trying for years to increase out-of-pocket Tricare fees paid by beneficiaries, which have not changed since the program’s inception in the mid-1990s. So some increase seems inevitable even if health reform had never happened.

Also, Tricare’s reimbursement rates are tied to those of Medicare, and many doctors think Medicare reimbursement rates already are too low. If those rates drop further and doctors balk at treating patients at those low rates, Tricare might have to boost its reimbursement rates — which it has authority to do — to keep a sufficient number of doctors in its regional networks.

The Defense Department, already carrying a medical budget that has exploded from $19 billion in 2001 to an expected $51 billion next year, may seek to pass some of those new costs onto beneficiaries.

Q. Will health care reform make it harder for Tricare beneficiaries to see a doctor?

A. Nothing in the new law limits Tricare acceptance by private-sector doctors, but side effects could emerge when 32 million more people acquire private health benefits — especially if there is no increase in the number of physicians in the work force.

Keeping Tricare reimbursement rates competitive with private-sector plans could become important to ensure health care providers still have an incentive to serve people covered by the military health plan.

Q. Will the new law transfer Tricare into another government health care program?

A. No. Tricare is governed by its own set of statutes and remains under the sole operational authority of the Defense Department.

Q. The reform law allows children to stay on their parents’ health care plan until age 26. Will Tricare follow suit?

A. The new law’s provision about older children does not automatically apply to Tricare. It would take a change in the law governing Tricare for military families to have this option.

A bill has been introduced in the House to bring Tricare in line with the health care reform law on this issue. It would allow unmarried dependents up to age 26 who still live at home and do not have employer-sponsored health care coverage of their own to remain on their military parent’s Tricare plan.

But Tricare coverage for older children would not be free; the bill would require families to pay an undetermined monthly premium. Private-sector insurers also have talked about charging premiums for this type of expanded coverage when it begins in about six months.

Unless the Tricare law is changed, coverage remains limited to dependent children up to age 23 if they are enrolled in college and rely upon their sponsor for more than 50 percent of their financial support, and to age 21 if they are not.

Q. Will Tricare benefits be considered a ‘Cadillac’ health plan and be subject to a new tax?

A. No. Tricare insurance is not subject to a provision of the reform law that, starting in 2018, would tax high-value health care plans, excluding dental and vision benefits.

Q. Will Tricare beneficiaries be forced to buy private health coverage or face a $750 penalty?

A. No. Mandatory health coverage is a key part of health reform; the law sets requirements for what is considered “adequate” coverage, and people will be penalized if they lack such coverage.

But lawmakers have rushed to certify that Tricare, and the Veterans Affairs Department health care system, meet the definition of minimal essential coverage under the reform law, so no one using those systems will have to seek other coverage to avoid being penalized.

Tricare for Life is specifically included by name as meeting the minimum standard.

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Staff writers Karen Jowers and Rick Maze contributed to this report.