NCPA - National Center for Policy Analysis

HEALTH CARE: THE THING THAT ATE THE PENTAGON

April 20, 2009

Health care is eating the Defense Department alive, says Defense Secretary Robert Gates.  His prescription for what ails the military health care system: replacing aging hospitals and raising Tricare (the Dept. of Defense health care program which provides civilian health benefits for military personnel, military retirees, and their dependents, including some members of the Reserve Component) fees for working-age retirees, which Congress has kept frozen since 1995.

Doing so, he claims, might persuade more retirees to come back to base if the care is again what people expect and want.  But part of the problem is that we cannot get any relief from Congress in terms of increasing either Tricare co-pays or premiums, says Gates:

  • Tricare is now 12 years old and there has not been a single premium increase allowed since the program was founded.
  • The Department doesn't seek fee increases for the active duty force or their families or retiree beneficiaries old enough for Medicare; fees are targeted toward younger retirees.
  • Some retiree associations have said they wouldn't protest some fee increases as long as they didn't exceed the annual percentage increase in retiree cost-of-living adjustments, and that Defense officials first exhausted all other reasonable ways of curbing health care costs.
  • But the department also has learned a lesson: for 2010, the defense health budget will not assume again $1.2 billion in savings from Congress approving Tricare fee increases.

However, Congress's main objection is that the Department hasn't done any thoughtful analysis of what fees should be.  Instead, most of the projected savings from fee increases were based on assumptions that many thousands of younger retirees would stop using Tricare, or would be discouraged from using their earned benefits and remain under civilian employer health insurance.

Source: Tom Philpott, "Military Update: Health care: The thing that ate the Pentagon," Stars and Stripes, April 18, 2009.

For text:

http://www.stripes.com/article.asp?section=104&article=62099

 

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