U.S. Military (Ret.): Congress has resisted linking Tricare fees to paygrade - Military Retirement - Navy Times

U.S. Military (Ret.): Congress has resisted linking Tricare fees to paygrade

Q: In all the discussion about Tricare fees, I don’t recall seeing a suggestion that fees be indexed to the paygrade of the retiree sponsor. It’s not a radical idea — rates charged at some morale, welfare and recreation activities, for example, are based on paygrade. As a retired O-4, I can afford to pay a bit more for the superior coverage of Tricare Prime. What do you think?

A: That has, in fact, been proposed in the past.

In early 2006, for example, the Defense Department’s budget request for fiscal 2007 included a proposal aimed at working-age retirees that would have linked not only the annual Tricare Prime enrollment fee, but also the Tricare Standard annual deductible, to paygrade.

The plan also would have created a new annual enrollment fee for Tricare Standard, also linked to paygrade.

Younger retirees would have been split into three groups based on paygrade at retirement: officers; E-7s and above; E-6s and below.

That proposal was shot down by Congress. But resistance to raising Tricare fees has eroded since then as DoD’s medical costs have continued to soar.

The recently approved Defense Authorization Act for 2012 raised the Tricare Prime annual enrollment fee for retirees under age 65 to $260 from $230 for individuals and to $520 from $460 for families, a hike of 13 percent. That’s the first Tricare fee increase since the program was created in 1995.

However, Congress mandated the higher fees only for working-age retirees who newly enroll in Prime from Oct. 1, 2011, to Sept. 30, 2012. Those enrolled prior to Oct. 1, 2011, still pay the lower fees — at least for a while.

The new law also authorizes, but doesn’t order, DoD to raise the Prime fee each fiscal year for working-age retirees by the same percentage as the annual cost-of-living adjustment in military retired pay, starting in fiscal 2013.

The law also says the baseline for increases in fiscal 2013 and beyond for working-age retirees will be the fees paid by new enrollees in Prime this fiscal year ($260 for individuals and $520 for families).

The most recent retiree COLA was 3.6 percent. So on Oct. 1 — the start of fiscal 2013 — DoD could bump the Prime annual enrollment fee for working-age retirees to $269 for individuals and $539 for families.

That would be an increase of 3.6 percent for retirees who newly enrolled in fiscal 2012 — but 16.6 percent for those already enrolled before Oct. 1, 2011, who had their fees frozen for a year.

DoD has not yet said what it plans to do; that will probably become clear when the fiscal 2013 defense budget request is sent to Congress in early February.

To get back to your point, I think the idea of asking those with higher retirement pay to contribute more out of pocket toward their Tricare costs is not necessarily out of bounds.

Of course, many retirees remain adamantly opposed to any hikes in Tricare fees — or any health care fees at all, for that matter.

I understand where they’re coming from. But that train has left the station for good.