DoD settles on cost index for Tricare fee hikes - Navy News | News from Afghanistan & Iraq - Navy Times

DoD settles on cost index for Tricare fee hikes

The Defense Department would link future Tricare fee increases to a medical care cost index that has increased by an average of 6.4 percent a year over the past 25 years, but rose just 3.1 percent last year, according to a briefing provided to military associations.

The National Health Expenditure index, produced by the Centers for Medicare and Medicaid Services, would be used beginning in 2013 to determine annual enrollment fee increases in Tricare Prime for working-age military retirees and their families, under a pending Pentagon plan that requires congressional approval.

The idea of linking Tricare fees to annual increases in average health care costs is not new. Pentagon officials had announced in January that they planned to do this, but until now had not indicated what medical cost index they would use.

George Taylor Jr., DoD’s acting principal deputy assistant secretary for health affairs, told representatives of military associations in a Wednesday conference call that several health care indexes were reviewed before officials settled on the National Health Expenditure index.

Details of the briefing were made public Friday in the newsletter of the National Association for Uniformed Services.

The Centers for Medicare and Medicaid Services are part of the Department of Health and Human Services, and are responsible mainly for maintaining standards for the two federal health programs.

Taylor said the NHE index increased by an average of 4.6 percent a year over the past five years, and is expected to rise by 4.1 percent a year over the next five years, which would be less than the 6.2 percent increase DoD officials have warned retirees to expect.

However, a fact sheet on the NHE index provided to associations includes an estimate for a 6.1 percent increase through 2019. The Centers for Medicare and Medicaid Services website has different projections for health costs, estimating an average annual increase of 6.3 percent, and describes this as higher than previous estimates because of new costs related to national health care reform.

No Tricare increases will take effect unless Congress goes along, and it remains unclear if lawmakers will support the proposal. The Pentagon proposal is contained in its fiscal 2012 budget request. The House Armed Services Committee is expected to make initial decisions about the 2012 defense budget next week. The Senate Armed Services Committee may not tackle the issue until June.

For fiscal 2012, DoD is asking to increase Tricare Prime enrollment fees by $30 for individuals and $60 for families, a 13 percent hike from current fees. In 2013 and beyond, DoD would link increases to the rise in the health cost index.