Posted on 04/26/2005 9:31:00 PM PDT by Racehorse
Rising medical costs and the expansion of health benefits for retirees, Guardsmen and Reservists, and their families, are putting a strain on the military health care system, Defense Department health and personnel officials told members of Congress April 21.
"Rising health care costs are not unique to the military health system; it's a national concern, and we are struggling with it," Dr. William Winkenwerder Jr., assistant secretary of defense for health affairs, said in testimony before the personnel subcommittee of the Senate Armed Services Committee.
David S. C. Chu, undersecretary of defense for personnel and readiness, also testified at the hearing. He said rising costs can also be attributed to increased enrollment in Tricare benefit programs.
Chu said improvements in Tricare benefits have made the health plan "widely accepted" by servicemembers, retirees and their families.
And, he added, "others seek to join this program," referring to retirees over age 65, who joined Tricare for Life, and Reservists, who can begin enrolling in Tricare Reserve Select this month.
However, he said, the popularity of Tricare programs has brought with it "substantial cost."
Winkenwerder pointed out that expenses for Tricare have grown rapidly, doubling over the past five years from $18 billion to nearly $36 billion this year. If the current trend continues, the program's total budget could top $50 billion within five years, he said.
By 2010, Winkenwerder estimated, approximately "70 percent of the health budget will be spent caring for retirees."
"The facts show that our expansion of health benefits, such as those for our senior retirees, underlies the growth, and that growth could put today's operations and sustainment at risk," he said.
In addition, the expansion of health care benefits to retirees has led to increased pharmacy costs. Winkenwerder said the cost of Tricare pharmacy program has increased 500 percent since 2001, with costs approaching $6 billion this year.
He said the department is trying to control some of those costs by implementing "performance-based" budgets and improving Tricare pharmacy program with a new formulary and using federal pricing for its retail pharmacy network.
In addition, he said, Tricare contracts are now designed to "leverage private-sector methods" in order to control purchased health care costs.
Still, he added, management actions alone, even dramatic ones, "will not stem the rapid growth spending."
"That is because benefit expansion and rising utilization are the driving forces in sending these costs upward," he explained.
Winkenwerder said part of Tricare's problem is that the program's benefit structure has not kept pace with changes in the private sector or industry. For example, enrollment fees and cost shares for Tricare have not increased in a decade, he said.
Winkenwerder pointed out that while Tricare cost shares have remained "unchanged" over the past five years, those for private health care firms have risen significantly. For instance, cost shares for Kaiser Permanente Mid-Atlantic region rose 57 percent, and those for Blue Cross Standard rose 87 percent.
"This has persuaded a growing number of our beneficiaries to drop their private coverage and to fully rely upon Tricare," he said.
Winkenwerder cautioned the committee that the "low out-of-pocket costs and outstanding benefit" that Tricare provides will drive "all of our retirees (to) rely on Tricare instead of their employer-based plans in just a few years."
"Simply put, we face a tremendous challenge with a benefit design that does not always reward the efficient use of care," he said. "And that is increasingly out of step with employer plans."
Goobermint screwing our military again. Get rid of the EPA, HUD, and all the other alphabet socialist gov't departments and fund our veterans.
This is a bit misleading. Not all drilling reservists will be eligible for Tricare Reserve Select. In order to qualify for Tricare Reserve Select you have to be employed by a company that doesn't offer health insurance, and have to have been mobilized for over 90 days for one of the major contingency operations (Enduring Freedom, Iraqi Freedom, Noble Eagle). For every 90 days you are mobilized you are eligible to purchase a year of Tricare Standard as long as you stay in the Select Reserves.
I accepted a recall in 2001 with the reserves and just found out the funding for the recall was through Noble Eagle which will entitle me to 14 years of eligibility as long as I stay in a Select Reserve status. I also qualify for six months of TAMP (free Tricare Prime) immediately after leaving active duty.
In essence I'm getting a better deal than a guy who has been held over on active duty by a stop loss which I think is wrong.
Anybody here on Tricare for Life. My grandmother is and says it's a pretty good wrap around for Medicare and really helps with prescription costs. Please share your opinions.
Anybody here on Tricare for Life. My grandmother is and says it's a pretty good wrap around for Medicare and really helps with prescription costs. Please share your opinions.
Yep. It is a good program. As a retiree, I'm also entitled to get medications at a military pharmacy. Since I have heart disease and take a fair amount of medications, this is a good benefit for me.
Tricare use to have a bad name and many in the medical field won't accept it due to past performance. They are MUCH better these days though.
Tricare for Life means that if the Dr. accepts Medicare, you pay nothing since Tricare picks up what Medicare doesn't cover. We don't use the pharmacy part since we are close to a military base.
Most private companies want to dump their retirees because of the cost and drive them away by raising their cost to the retiree.
The veteran of old was promised free health for life but the courts have ruled otherwise since it was only a verbal lure. Tricare is still cheap by any measure and will continue to pick up the veterans who drop their private company insurance because of rising premiums.
As with active duty dependent care, it can be abused by those who think if it is free or low cost it should be used frequently.
Really nice when the staff at the clinic does that on a local basis.
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