United States Department of Defense United States Department of Defense

DoD News

Bookmark and Share

 News Article

Officials Aim to Manage TRICARE Costs, Preserve Future Benefits

By Army Sgt. 1st Class Tyrone C. Marshall Jr.
American Forces Press Service

WASHINGTON, Oct. 3, 2011 – Modest increases to certain aspects of military health care will help to responsibly manage costs and ensure benefits for future service members, the assistant secretary of defense for health affairs said today.

“The truth of the matter is the spiraling cost of health care requires us to adjust some fees and co-pays -- fees and co-pays that really have not been adjusted since the TRICARE program was put into place in 1994,” Dr. Jonathan Woodson said. “This allows us to responsibly manage our costs while providing access to high-quality care and ensuring the benefit is there for those that might serve in the future.”

Effective Oct. 1, military retirees enrolling in the TRICARE Prime health plan began paying slightly higher annual fees, Woodson said. “The [TRICARE Prime] fee increases for an individual has only gone up, essentially, $2.50 a month,” he explained. “And for a family, $5 a month. [The] total cost is really modest in terms of the overall cost of the entire year.”

Those enrolled before Oct. 1, however, won’t see an increase in cost until fiscal 2013, he added.

Woodson said two groups of TRICARE beneficiaries would not experience any increases: people who are medically retired and survivors of deceased active duty sponsors.

Defense Department officials recognize the potential concerns regarding fee increases during tough economic times, he said.

“We understand, particularly in the current economy and set of fiscal realities, any increase in [out-of-pocket] costs would cause some concern,” he said. “But I would remind everyone there have been no fee increases since 1994.” Woodson also noted that not all co-payments and fees have risen.

“There have been some adjustments in co-pays,” he said. “In one category, actually, the fees have gone down, so [for] those individuals who have mail-order pharmacy benefits [and] previously paid $3 for generic drugs, … that fee will go away.”

Beneficiaries will see modest increases in other co-payments for brand-name drugs, particularly at the retail level, which will go from $3 to $5, he explained. Nonformulary drugs will rise from $22 to $25 for both retail and mail-order pharmacies. For brand-name drugs, the cost will remain the same -- $9 for the mail order pharmacy.

Another potential concern Woodson addressed was staff reduction.

“It will not affect the care, and it’s important to note that while we’ve been talking about adjustments in fees and co-pays, that is really part of a real comprehensive strategy to manage our cost,” he said. “We’ve taken a look at the administrative costs of TRICARE and reduced the numbers of so-called full-time employees and contractors to reduce the cost before getting to the point of increasing the fees.

“But none of this will decrease the service or the quality of care that beneficiaries will expect and receive,” he added.

The health affairs chief also said the department has taken a very “modest posture on the current recommendation and rollout of fee increases.” Woodson said no decisions have been made on future increases, and he re-emphasized that this is the first increase since TRICARE’s inception.

“I would like everyone to understand that because of the … cost of health care, TRICARE is trying to responsibly manage its cost and ensure that this benefit is available for the future for those that who will serve,” he said. “This does require some adjustment in fees, but we’ve taken a position to really only modestly increase these fees, understanding that those men and women who have committed to service in the nation’s military should have a more generous benefit than those in the civilian sector.”


Contact Author

Dr. Jonathan Woodson

Related Sites:
Information About TRICARE Prime Enrollment Fees

Related Articles:
New TRICARE Prime Enrollees Pay Adjusted Annual Fees


Article is closed to new comments.

The opinions expressed in the following comments do not necessarily reflect those of the U.S. Department of Defense.

10/23/2011 10:51:15 AM
The resounding theme of previous comments is the promises made to all service members regarding "free health care for life"...a promise made during recruiting and retention briefings. It' s a shame how quickly promises are broken. During current economic times a hike in premiums hurts...I retired in 2010 and even with a masters degree it took me a year to find employment...employment that does not pay nearly what I am worth. I believe individuals retiring on or before October of this year should have been grandfathered...just like with the retiree pay changes. I feel like the foundation upon which I based my decision to join the military and ultimately serve 30 years is being whittled away slowly...piece by piece...do I dare question what's next.
- Inez W., Jamestown NC

10/5/2011 7:28:39 PM
- Elmer Colon, Puerto Rico

10/4/2011 7:23:17 PM
Dear Congressman XXXXX, I have written you several times about the erosion of Military Retirees' Healthcare Benefits with no luck. According to the Defense Department, Tricare fee increases will take effect immediately. Prior to Tricare starting in1994, military retirees were promised FREE healthcare for life. This helped me decide to make the Army a career. Tricare was a "take it or leave it" deal. It was either accept Tricare or lose all your military healthcare benefits. This broke the government's promise. Retiree healthcare was no longer free. It introduced premiums, co-pays, and the like. Despite this, many retirees had no choice but to accept it. MILITARY RETIREES WHO RETIRED PRIOR TO 1994 SHOULD BE GRANDFATHERED FROM TRICARE FEE INCREASES, BECAUSE OF PROMISES MADE BY THE U.S. GOVERNMENT. Respectfully, Charles A. Gilbert, 1SG U.S. Army, Ret.
- Charles Gilbert, Burlington, KY

10/4/2011 12:12:04 AM
How can you increase something that we do not have. I was promised FREE, did you get that FREE health care for myself and family for 20 or more years of service to my country. That was in 1964 not 1994. $0.00 dollars is just that, so any % X $0.00 = $0.00 increase. What part of FREE does my government not understand? Remember when a mans word was a legal contract? When did that change? I guess those folks we elect to run our country have no morals when it comes to keeping their word or the contracts of those who set those policies in place many years ago. I kept my promise to serve and protect this Country, I thought I could trust my country to keep its promises to me and my family and to all that have served. What are the men and women in the senate and congress giving up in benifits? You All ned to remember we vote and that could mean your out of a job.
- Robert Keefe, NH

Additional Links

Stay Connected