BRYAN WHITMAN ( Deputy Assistant Secretary of Defense for Public Affairs): Good morning, and thank you for joining us today. We're here to discuss a rather narrow but a very important topic, the new health care plans that the department is implementing for eligible National Guard and Reserve members in accordance with the Authorization Act of 2005.
We have a number of people that most of you probably know, but let me introduce them briefly: Mr. Charles Abell, who is the deputy undersecretary of Defense for Personnel and Readiness, Dr. Bill Winkenwerder, the assistant secretary of Defense for Health Affairs, and Mr. Tom Hall, who is the assistant secretary of Defense for Reserve Affairs. Each of them have a few comments to make and then they'll be glad to take your questions on this topic.
MR. ABELL: Good morning. We're here to talk about a new health care benefit for our Reserve component personnel, called TRICARE Reserve Select. We here at the department are committed to the proper combination of compensation and benefits that allows us to attract and to retain the world's best military fighting force. As you know, it's an all-volunteer military, and we have been very successful in this pursuit over the 30-year history of the all-volunteer force.
In recent years, in response to President Bush's leadership, we have been improving the compensation package, the benefit package, housing, certain benefits for military members and their families, at the same time we face the challenges of the global war and terror. The department and the Congress have worked closely together to develop and implement a number of important improvements in military pay, in bonuses, in eliminating the housing gap -- the pay gap in housing, and on health care.
We recognize how important health care is to many of our members, both active and reserve, and their families. And although the large majority of the Guard and Reserve members have health care through their employers, we understand the importance of maintaining this continuity as they transition from their employers to serve with us and then back, and the need for some of them who may be self-employed or work for small businesses to have coverage. And that's what we're going to talk about today, as to how we are going to implement that.
As Bryan said, we've received some congressional authorization. It's the result of a couple of years of consultation between us and the Congress to get this authorization. And now we're prepared to implement the benefit. We'll have it in place by -- up and running by the end of April. And we're confident that we will have a program that our Reserve component members will find attractive, that will serve the needs of the department and the individuals and help the nation, again, as we look to recruit and retain the very best.
I'm going to invite up Dr. Bill Winkenwerder, the assistant secretary of Defense for Health Affairs, and following him, Admiral Tom Hall, the assistant secretary for Reserve Affairs, to give you some words from their perspective on this important benefit. And then we'll try to answer a few questions. So, Dr. Winkenwerder.
DR. WINKENWERDER: Thanks, Charlie.
And good morning, everybody. As you know well, members of the Guard and Reserve components have shouldered a tremendous share of this global war on terrorism in which we're deeply engaged, and they've performed exceptionally well. They mobilize and deploy side by side with active-duty forces, many serving in Iraq and Afghanistan. Their service is with pride and loyalty.
And while we have in the past, with respect to health care, offered full health care benefits during all periods of active duty for these service members and for their families, we, with this change that we've just discussed, will shortly offer a more comprehensive benefit for transition back to private life and, importantly, the opportunity, for those who have served in contingency operations, the option for obtaining TRICARE coverage on a longer-term basis at very attractive premium rates. And we'll talk about that in a few moments.
Secretary Hall will address the specifics of eligibility for the new TRICARE Reserve Select program. What I'd like to do is briefly outline the benefits included in this comprehensive health plan.
The coverage reflects that that is found in TRICARE Standard and TRICARE Extra. Medical procedures, office visits, hospitalizations contained in other health plans are included in this program. TRICARE Reserve Select is a premium-based health plan -- that is, you have to pay a premium every month -- with the costs that will be based on those of the Blue Cross and Blue Shield standard federal employee health benefit plan, with some adjustments. And we'll describe those.
We believe the plan compares very favorably with any health benefit option that could be available to Guardsmen and Reservists and their families in the private sector.
As Guardsmen and Reservists prepare to return to their civilian lives, we hope they'll consider carefully the value of this benefit for themselves and their families, as well as the commitment of continued service to our nation's defense.
For more details on the program, we have a fact sheet to give you on the way out and also recommend that you consult or go to the TRICARE website. It's updated frequently. It's www.tricare.osd.mil/reserve/reserveselect/.
So with that, let me turn it over to Secretary Hall, and then, I guess, we'll answer questions.
ADM. HALL: Thank you, Bill.
My remarks will be very short, because I have two areas to cover: the eligibility and then what our Guardsmen and Reservists think about this program.
The eligibility is very simple. I'm glad the bill included that, and we've tried to make it very simple.
And what it says is if you have served in this contingency, in which the president may call up to a million people for no more than two years, since 9/11, and if your set of orders are for more than 30 days, you're eligible for this program. So very simple: once you reach the 90-day point and you have served, you have accrued one year of eligibility. So under the current provision, if you've served for the two years, you could have up to eight years of eligibility. This is for you and your family, and it's a very simple eligibility.
On the second part, I wanted to step back just a minute to tell you what this really provides. Previous to this, there had been some changes in the eligibility for health care for Guardsmen and Reservists to allow a wider bridge. And as you might know, 90 days prior to mobilization, our Guardsmen and Reservists and their families come under TRICARE.
After mobilization, prior to this, they had either a 60-day or a 120-day eligibility, but that was also changed last year to 180 days. This is even beyond that. So what it provides is the bridge for the young men and women for 90 days prior to, 180 days and then up to eight years.
And what I did on this -- and I think it's important because many times inside the Beltway and Washington, we always talk about what we think about it. I try to analyze what our young men and women think about it, because they're the recipients.
And I just traveled to the AOR, to Qatar and to Kuwait, and talked to over 2,000 of our young men and women, some of them just going into Iraq, some of them just coming out. And I asked them, the recipients, "What do you think about this?" And universally, what they told me was, first of all, it targets the young men and women bearing the brunt today. And that's what we've tried to make all of our benefits -- focus on them; they're fighting the war on terror.
And the second thing which came across universally is, this is a bridge, and this is a bridge we need to our civilian health care. So if they wish to go into the civilian health care at one year or two years or three years, they can go back into that program. And as I say, the maximum eligibility is eight years.
So I think they think that they have the flexibility that they need in the program. They have welcomed the program. We thank Congress for the bill. And as you've heard, we're enacting it, and I would be happy to answer any questions from you in my area. Thank you.
MR. WHITMAN: Okay. Are there any questions that we can answer? Yes, sir?
Q How much would service members be paying per month? And how much is the total cost of the program to the government?
MR. WHITMAN: Okay. I'll let Bill answer that.
DR. WINKENWERDER: Yeah. For an individual, it's about $75 a month, which is -- as you know, health insurance is typically more expensive than that. So that's a very good -- it's about 30 percent lower than one would pay under the federal employees health benefit plan as an individual.
For a family, it's about 233 (dollars), I think, is the exact number of dollars per month.
Q Is that an average, or does --
DR. WINKENWERDER: No, it'll be a fixed amount. There will be two rates: one for individuals and one for families.
Q Will that be adjusted for inflation yearly?
DR. WINKENWERDER: We'll adjust it, and over time, as the federal employees -- as the cost of care goes up, that premium will be adjusted.
Q Why are the premiums so low? Is it an actuarial grounding? Is it a --
DR. WINKENWERDER: Well, it's actuarially grounded, and it is based on the federal employees health benefit standard option. And our actuaries worked and also consulted, I might add, with the Congressional Budget Office. And they're supportive of the methodology. And so we think it's solid.
You know, as we go forward, we'll -- certainly open to change, but we don't anticipate, you know --
Q The premiums are low because the -- lower because this tends to be a fit group of people
DR. WINKENWERDER: Part of it is the population. That's just the point. We didn't think it would be fair to charge individuals and families who are typically a little bit younger than the federal employee population the same rate.
DR. WINKENWERDER: So it's been adjusted downward to reflect that.
Q My other question, on the total cost of the program to the government?
DR. WINKENWERDER: I don't have a quick back-of-the-envelope estimate for you. We'll try to get that for you. It will be several hundreds of millions of dollars in this first year. It'll depend on the uptake rate over time, but it's certainly a major commitment in terms of dollars. (Answered after the briefing. Total costs to the government for this program: FY05 estimated costs are $70 million; FY06 estimated costs are $394 million. Deductibles: They are the same as the annual (calculated on a FY basis) deductibles for TRICARE Standard and Extra. For those with a rank of E-4 and below: $50/individual or $100/family. For those with a rank of E-5 and above: $150/individual or $300/family. Also there are co-payments or cost-shares. The cost-share is the percentage of the TRICARE allowable amount for which the TRS member is responsible. After the annual deductible has been met, the member will pay 15 percent for care received from a TRICARE network provider; or 20 percent for care received from any non-network TRICARE authorized provider.)
Q Do you have an estimate for the number of people who would be expected to sign up?
DR. WINKENWERDER (?): Yeah.
ADM. HALL: I think the best metric is to look at the potential population. And since 9/11 we have mobilized a bit over 400,000 people. Now that would be the top end, and how many of those people would elect to sign up?
One thing that I didn't mention. The individuals need to remain in the drilling reserve as part of -- and continuing serving, to maintain their eligibility. If they wish to terminate their affiliation, go to the IRR, stop drilling, get out of the Reserve, well, then they do that willingly and can elect to not have it. So the top end would be that 400,000. I would not expect that all of those people would want to go into the program.
DR. WINKENWERDER: Plus their family members.
ADM. HALL: Plus their family members. But those are the amounts of people we've mobilized since 9/11.
Q Everybody who's been mobilized since the beginning would be
ADM. HALL: Yes And that's an important point. I should have covered it. It's retroactive. The law was passed, and what we're doing is allowing all the people -- we're contacting them -- who have been mobilized, and I think through October 28th we have an open season that we're going to contact each and every one of them and say, although it was passed, this applies back to you. There will not be back premiums, any of that. They can just pick it up. And we're giving them, I think, until October the 28th, I think, as an open season to do that.
Q Thank you.
MR. WHITMAN: Other questions?
Q Again to clarify, they have to remain on an active – a drilling Guard status to be eligible.
ADM. HALL: Guard or Reserve, that's correct.
DR. WINKENWERDER: Yes, ma'am?
Q Are you going to have to expand TRICARE -- doctors, facilities, hospitals -- in order to accommodate the new program?
DR. WINKENWERDER: We don't anticipate needing to do that. And the reason is that we have a very robust system today. In addition to all the military hospitals and clinics and doctors, we have networks that are brought about through our relationships with private health plans, private community hospitals and doctors. And we have about, at last count, I think I recall, around 210,000 physicians participating and several thousand hospitals. So we've got very broad coverage. And we'll be working with our health plan partners, Humana, HealthNet and TriWest. And so many of these services will be provided through those networks.
Q And I'm sorry, but is there a deductible associate with this or is it sort of like a PPO type of arrangement?
DR. WINKENWERDER: I'm trying to recall. There is a --
AMB. HALL: There is a deductible.
DR. WINKENWERDER: There is a deductible, yes, that's right.
ADM. HALL: I might --
DR. WINKENWERDER: Go ahead.
ADM. HALL: There is a deductible and a catastrophic cap. And we can get you the figures on both of those. But importantly, it's also graduated deductible for E-4 and below, so -- structured in the way for E-5 and above. So it varies by that to allow the more junior ranks not to have to pay as much in the deductible and the catastrophic. And we can get you the figures. But it's structured like many of our other programs. It allows for rank and grade a different deductible.
Q Would that be on the website now? Is that up?
ADM. HALL: That is going to be on the website. And those figures -- and I won't quote them because -- it's like $100 and $150 and some, but it's in that range. But we can get you that and it will be on the website.
MR. ABELL: And the catastrophic cap is $1,000.
Q The 400,000 that we've mentioned as potentially eligible for this, have a number of those become ineligible now because they have left the drilling Reserve?
MR. ABELL: Certainly. Some number of that 400,000 have decided to leave the Reserve. Some have retired. Some have moved on. Some may have changed from one Reserve component to another. I mean, they're not all going to still be in the same status.
Q Do we know what the actual eligibility pool is, then?
DR. WINKENWERDER (?): No, sir. As Secretary Hall said, we're going to contact each and every one. We're going to determine whether they're eligible and whether they're interested.
Q And just to double-check. You do not have a projection or an estimate of what you think the number is going to be who want to take part in this program?
MR. ABELL: No, none that we're proud enough of to talk about. I mean, we obviously have some numbers we've used to get to the estimates that Dr. Winkenwerder talked about, but those are just that. They are estimates. We're prepared to support this program if it's all the 400,000, if every one of them did it and their family members, or if two of them did it.
Q (Off mike.)
ADM. HALL: It's going to be a lot less, because remember, with guardsmen and reservists, and I'm sure you all talk to them like I do, they're interested in getting back in their civilian job, in most cases getting their civilian policies back, and this is the bridge. So the overwhelming majority I talk to are anxious to go right into their civilian job, reacclimate with their families and get back into that.
So it's going to be a considerably less number, but you just -- you can't guess. This is the bridge that will allow them that opportunity.
But by and large, most of them transition, because their job is protected under USERRA. They go back into it, they go back into their civilian health care. So it'll be certainly far less than all 400,000, but we plan for that as the top limit.
Q Okay. And you guys don't want to share the projection number that you've been using?
ADM. HALL: Well, we -- remember, we've got to contact all of them, and so --
Q But do you have the exact number?
ADM. HALL: No, I don't.
DR. WINKENWERDER: It's going to be many thousands to tens of thousands, we would expect, at a minimum. But beyond that, I think, Charlie and Tom have said it rightly. We hope people sign up who need, want, desire the coverage. And we'll find out what it is, what that number is, over time.
MR. ABELL: Yes, ma'am?
Q You had mentioned in your opening remarks that the vast majority of Reservists have coverage through their civilian employers. Do you have a percentage for that?
MR. ABELL: The numbers I have -- again, back-of-the-envelope kinds of numbers -- vary; between 80 and 90 percent of our Reservists have coverage with their employers.
Q Would this be -- do you know whether this would be cheaper than for someone to go back to their civilian coverage?
MR. ABELL: Well, I think that depends on the benefits suite that the civilian coverage covers. As you know, there are hundreds, maybe thousands of different kinds of policies out there, and for us to be able to match against the others, that's the choice we leave to the individual. We're going put this program out there. We're going to describe it to them accurately. They're going to be able to make a choice that fits their family need, and I think that's the key to any health insurance decision, because you have to find the program meets your family need.
MR. WHITMAN: Thank you.
Q Thank you.
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