Retirees under 65 should pay more for Tricare, QRMC says - Military Retirement - Navy Times

Retirees under 65 should pay more for Tricare, QRMC says

The idea that military retirees under age 65 should pay more for their Tricare benefits has become a familiar Pentagon refrain, voiced in a 2006 report on military compensation and by the 2007 Task Force on the Future of Military Health Care.

The Pentagon has tried for three years running to convince Congress to boost those rates, without success.

Critics say the hardships and sacrifices that go hand in hand with a career in the military represent a form of in-kind premium payments, and argue that any increases should be proportional to increases in retired pay.

Now another study — the Pentagon’s 10th Quadrennial Review of Military Compensation — has added its voice to the calls for a boost in payments.

The QRMC recommended that “working-age” retirees — those under age 65 — pay more for Tricare Prime, “reflecting their ability to do so,” the study said.

Such a move would make their premiums more equitable with those paid by older retirees, who must pay Medicare Part B premiums in order to qualify for Tricare for Life coverage.

“There needs to be some parity between our older and our younger retirees,” said retired Air Force Brig. Gen. Denny Eakle, QRMC executive director. “It’s not fair to ask the oldest retirees, who make the least, to pay far more for a benefit that is just somewhat more generous.”

The concerns of those urging a fee hike stem from the Pentagon’s rapidly growing health care costs, which stood at $19 billion in 2001 and are projected to reach $42.9 billion next year.

But because Tricare fees have not changed since that program’s inception in the mid-1990s, the share of the military’s overall health care costs that are borne by beneficiaries declined from 27 percent in 1995 to just 12 percent in 2006, the QRMC said — which has turned Tricare into one of the lowest-cost health insurance plans in the nation.

Annual premiums for Tricare Prime have never changed from $230 for single retirees and $460 for families. Tricare Standard and Tricare Extra have never charged annual premiums.

Meanwhile, retirees over 65 who want to enroll in Tricare for Life are required by law to carry Medicare Part B, which this year charges annual premiums that start at $1,157 and rise for beneficiaries with higher income.

The QRMC suggested four-year phased increases in premiums for Tricare Prime, Standard and Extra for under-65 retirees.

After the four-year phase-in, premiums for single retirees under age 65 would be set at 40 percent of Medicare Part B premiums. That means a single under-65 retiree on the lowest rung of Medicare Part B’s income scale — annual income of $82,000 or less — would pay annual premiums of $462.70 for Tricare Prime, double the current rate.

On the upper end of the scale, a single under-65 retiree with gross income of more than $205,000 would pay $1,485.10 per year — almost 6½ times the current premiums for Tricare Prime.

In all cases, Tricare Prime premiums for married couples would be double the rates for singles, regardless of family size. Couples on the first income step, earning $164,000 or less per year, would pay $925.40. At the top step, $410,000 or more, annual premiums would be $2,970.20.

Premiums for Tricare Standard and Extra would be set at 15 percent of the annual Medicare Part B premiums for single retirees under 65, with the family rate again set at twice that.

While younger retirees might object to having their Tricare premiums tied to Medicare when they are not yet enrolled in that program, Eakle said, defense officials see it as “a matter of proportionality to the older retiree[s], who have to pay it in order to have Tricare.”

The largest coalition of veterans groups rejects Tricare premiums being based on Medicare rates.

“I don’t like tying premiums to the Part B plan,” said Steve Strobridge, director of government relations for the Military Officers Association of America, one of the 35 groups that make up the Military Coalition.

Medicare Part B costs are “based on care for the elderly and disabled,” he said. “That’s much different than the under-65 population.”

He said the proportionality argument doesn’t wash, either.

“I guess it depends on your perspective,” said Strobridge, a retired Air Force colonel. “People under 65 are paying Medicare premiums for their future coverage.”

His biggest objection, however, is that the QRMC’s proposal does not take into account the sacrifices of military life. “We’re getting no credit for paying premiums up front. Most of the premiums paid for Tricare are paid in-kind,” through the years of service given to the military by retirees, he said.

Any Tricare fee increases, he said, should be proportional to increases in retired pay. “If the cost-of-living allowance goes up 3 percent, the ceiling should be a 3 percent increase in fees,” Strobridge said.