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Release No: 014-99
January 14, 1999


The Department of Defense announced today the selection of eight sites for a Congressionally enacted test of the Federal Employees Health Benefits Program (FEHBP) to provide medical care for up to 66,000 retired Service members and their dependents.

The sites selected at a Pentagon ceremony yesterday afternoon are: Dover Air Force Base, Del.; Commonwealth of Puerto Rico; Fort Knox, Ky.; Greensboro/Winston-Salem/High Point, N.C.; Dallas, Texas; Humboldt County, California area; Naval Hospital, Camp Pendleton, Calif.; and New Orleans, La.

In accordance with the 1999 National Defense Authorization Act, the Department of

Defense (DoD) and the Office of Personnel Management (OPM) are developing a demonstration project that would allow some Military Health System (MHS) beneficiaries to enroll with the Federal Employees Health Benefits Program (FEHBP) to receive their military retirement medical care.

The selection of sites for the demonstration follows congressionally mandated requirements. Sites include: one Medicare subvention site, one catchment area site and one noncatchment site, with no more than one site per TRICARE region.

"The Military Health System stands firm in our commitment to providing quality health care to all our beneficiaries," said Assistant Secretary of Defense for Health Affairs Dr. Sue Bailey. "This demonstration project, along with several other test programs, such as the TRICARE Senior Prime demonstration, and planned demonstrations to test an expanded pharmacy benefit and a TRICARE supplemental benefit for Medicare-eligible beneficiaries over the age of 65, will provide the Department with valuable information about the cost and feasibility of several alternative approaches to providing increased health care access for our over-65 population." In addition, Janice R. Lachance, director of OPM, said, "We are pleased to be able to bring the same health care coverage enjoyed by federal civilian employees and retirees to military retirees and their dependents."

Under this new test, MHS beneficiaries can join the FEHBP during the fall 1999 open season. Those beneficiaries include over-65 retirees who are Medicare eligible and their dependents, unremarried former spouses of military members, and dependents of deceased members or former members. For the retirees' dependents and the last two groups, Medicare eligibility is not required. Coverage will start in January 2000 and end December 2002.

Beneficiaries must enroll in an FEHBP plan and pay any applicable premiums to receive benefits. During the test, enrollees may not use Military Treatment Facilities (MTFs) for any services. Premiums will be based on a separate risk pool for MHS beneficiaries. The government's contribution will be computed the same as it is currently computed under the FEHBP.

OPM and DoD will jointly evaluate the program and submit reports for Congress in May 2001 and December 2002.

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