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Budget Request Preserves Troop Health Benefits, Official Says

By Karen Parrish
American Forces Press Service

WASHINGTON, Feb. 14, 2012 – The $48.7 billion in medical spending contained in the 2013 defense budget request follows Defense Secretary Leon E. Panetta’s often-stated priority of keeping faith with military members, a senior Defense Department official said yesterday.

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Proposed increases in pharmacy co-pays and retiree TRICARE Prime enrollment fees and deductibles, shown here, are among medical cost-saving measures included in the fiscal 2013 defense budget request. DOD graphic by Paul Sherman
  

(Click photo for screen-resolution image);high-resolution image available.

Though the request would establish or increase TRICARE enrollment fees and deductibles for most retirees and raise retail and mail-order pharmacy co-pays, fees will not increase for active-duty service members, survivors of military members who died on active duty, or medically retired service members, Dr. Jonathan Woodson told Pentagon Channel and American Forces Press Service reporters.

Woodson, a vascular surgeon, is the department’s assistant secretary for health affairs and director of the TRICARE Management Activity.

"Active duty family members will be affected by increases in co-pays when they obtain prescriptions from retail or mail order pharmacies,” he said. “Prescriptions will continue to be filled at no cost to beneficiaries at military treatment facilities."

Defense Secretary Panetta has taken a balanced approach to required spending cuts, Woodson said.

“There’s a global fiscal crisis, there’s a national fiscal crisis, and of course, we’re conducting business under the Budget Control Act,” he said. The Defense Department has a $487 billion dollar “bill to pay” under that act, Woodson added.

“All things needed to be considered,” he said, “but I think there’s been a real fair approach in making sure that we honor the service of our men and women who commit to defending this nation.”

Department leaders have protected personnel benefits, particularly health care, as much as possible, he said.

“The health care will remain superb,” he pledged. “The access to health care will be preserved, and it will be quality care.”

Proposed changes include:

-- Increasing enrollment fees for retirees under age 65 in the TRICARE Prime health plan, using a tiered approach based on retired pay that requires senior-grade retirees with higher retired pay to pay more and junior-grade retirees less;

-- Establishing a new enrollment fee and increasing deductibles for the TRICARE Standard and TRICARE Extra plans;

-- Establishing a new, tiered enrollment fee for the TRICARE-for-Life program for retirees 65 and older;

-- Increasing pharmacy co-pays while offering incentive costs for use of mail order delivery and generic medicines;

-- Indexing fees, deductibles, pharmacy co-pays, and catastrophic caps to reflect the growth in national health care costs.

Proposed pharmacy co-pay costs for a one-month supply of retail drugstore prescriptions are set at $5 for generic drugs and $12 for brand-name medicines in fiscal 2012, and will rise over time to $9 and $34, respectively, in fiscal 2017.

For mail-order three-month prescriptions, those costs begin at being free for generic drugs and $9 for brand-name medicines, and rise in fiscal 2017 to $9 and $34. Defense officials noted that nonformulary drugs -- those not on the department’s list of standard medicines -- often are not available in retail pharmacies and have higher mail-order co-pays, ranging from $25 in fiscal 2012 to $66 in fiscal 2017.

Under the tiered system, retirees younger than 65 enrolled in TRICARE Prime will pay a minimum enrollment fee of $460 this fiscal year, rising to $893 in fiscal 2017 for those receiving less than $22,589 in annual retirement income. Maximum TRICARE Prime enrollment fees, charged to retirees receiving more than $45,179 in annual retirement pay, are set at $460 to $520 this year and $2,048 in fiscal 2017.

In his prepared testimony today before the Senate Armed Services Committee, Panetta said service members and their families will see no increases in health care fees or deductibles.

Military retirees younger than 65 will be most affected, and their costs will remain, “as they should be,” below those of most private-sector plans, Panetta said.

 

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Biographies:
Leon E. Panetta
Dr. Jonathan Woodson

Related Sites:
Special Report: Fiscal 2013 Defense Budget Proposal
Fiscal 2013 Defense Budget Request Overview
Defense Strategic Guidance
Defense Budget Priorities and Choices
Defense Budget Fact Sheet



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