Since 02-10-06
Final Plan For Higher Retiree
TRICARE Fees Unveiled
Since 02-10-06
From: Waspscpo@aol.com [mailto:Waspscpo@aol.com]
Sent: Friday, February 10, 2006 9:37 AM
To: undisclosed-recipients:
Subject: Fw: BGEN Bob Clements, USAF, ret comments
On 10 February 2006 BGEN Bob Clements, USAF, ret wrote:
(his comments are below the Tom Philpott article which you had previously
received from me under separate cover)
Subj: Final Plan For Higher Retiree TRICARE Fees Unveiled
Date: 2/10/2006 3:28:59 AM Eastern Standard Time
From: p38bob@deepwell.com Sent from the Internet (Details)
http://www.military.com/features/0,15240,87487,00.html
TRICARE Plan Finalized
Military.com Tom Philpott February 9, 2006
Final Plan For Higher Retiree TRICARE Fees Unveiled
The Bush administration, in its fiscal 2007 defense budget, unveiled its plan to
raise TRICARE fees and deductibles for military retirees under age 65 and their
dependents. Co-payments in the TRICARE retail pharmacy network also would climb,
but for all beneficiaries except those on active duty.
Marine Corps Gen. Peter Pace, chairman of the Joint
Chiefs, immediately endorsed the plan, describing it as a necessary "renorming"
of TRICARE fees and deductibles left unchanged since they were set in 1995.
With equal speed, military associations attacked the proposal.Compared to an
earlier draft, the final plan accelerates phase-in of TRICARE increases so major
changes occur over two years, not three. Annual enrollment fees for TRICARE
Prime, the managed care program, would double for senior enlisted (E-7 and
above) and nearly triple for officer retirees.
But the final plan includes a lower, third tier of fees and deductibles for
retirees E-6 and below and their dependents. Their Prime enrollment fees would
rise only by 41 percent, sparing a million beneficiaries from steeper increases
planned for senior enlisted.
The decision to vary the TRICARE fees, said Dr. William
Winkenwerder Jr., assistant secretary of defense for health affairs, "reflected
significant input from the military uniform leadership…recognizing that some
people have fewer dollars in retirement income than others."
The plan also calls for a raise in annual deductibles for TRICARE Standard, the
military fee-for-service insurance option. And it calls for a first-ever
enrollment fee for Standard users. Once new TRICARE fees are fully reset, in
2008, they would be adjusted annually based by healthcare inflation, in fact,
applying the same percentage increase used to raise premiums each year for
federal civilians covered under the Federal Employees Health Benefit Plan
(FEHBP).
Finally, to slow military health costs more, co-payments under the TRICARE
retail pharmacy network would be raised, for generic drugs to $5, up from $3,
and for brand name drugs to $15, from $9.To encourage use of the more efficient
mail order program, that $3 co-pay for a three-month supply of a generic drug
would end.
But a new "100-percent co-payment" would be set for a "few certain medications,"
officials said. Thus, for some still-to-be determined narrow group of drugs,
beneficiaries themselves would pay the entire cost unless they can show medical
necessity or unless there is no cheaper and effective alternative.
Testifying before the Senate and House armed services
committees, Pace and Defense Secretary Donald Rumsfeld said the TRICARE changes
are unanimously backed by all of the Joint Chiefs.
"We believe this healthcare benefit is unique and superb," Pace said. "We want
it to continue for all of our members of the active-retired community and we
believe renorming, to what you [Congress] established in 1995, is one way to
assist…the goal of long-term sustained health care."Sen. Lindsey Graham (R-S.C.
), chairman of the military personnel subcommittee, lauded Pace and Rumsfeld
"for putting on the table some new ways of looking at military health care…I
stand ready to help."
The plan got a cooler reception from House committee
members.
Rep. Neil Abercrombie (D-Hawaii) said the fee increases were more evidence that
the only Americans paying for the war in Iraq are military people.
Rep. John McHugh, military personnel subcommittee
chairman, worried that of $578 million in projected cost savings from the
TRICARE plan for 2007, $420 million "are imputed savings," which depend on
"changes in behavior." In other words, McHugh said, the department expects a lot
of people not to use TRICARE because of the higher fees and deductibles.
"I guess we could talk about the morality of that, if that's the way to contain
costs [by] persuading people not to use health care," McHugh told Rumsfeld and
Pace. "But I'm going to put that aside."
Of more immediate concern, he continued, is what will
happen if the imputed savings, which jump to $1.6 billion for 2008, aren't
achieved? Because those savings are imbedded in the defense budget, he
suggested, other defense programs will be put at risk if the savings aren't
realized.
Pace said he didn't know how savings were calculated. The Joint Chiefs focused
their discussions, he said, on preserving a benefit whose annual costs have
soared from $19 billion in 2001 to $37 billion in 2006. Yet the "very
reasonable" TRICARE fees, set 11 years ago, have not been raised.
Rumsfeld said low fees have turned TRICARE into a
"magnet" for working-age military retirees who increasingly are encouraged by
civilian second-career employers to use TRICARE rather than company health
plans.
The Military Coalition, a consortium of three dozen military and veterans
associations, opposes the higher fees, deductibles and co-pays. Jim Lokovic,
director of government relations for the Air Force Sergeants Association,
co-chairs the coalition's retired affairs committee. He said a big worry for
enlisted retirees is the effect of linking future fee adjustments to the
percentage rise in FEHBP premiums.
FEHBP increases typically outpace retiree cost-of-living adjustments which would
mean a steady decline in the value of military retirement as health costs climb.
Steve Strobridge, with Military Officers Association of America and the
coalition's co-chairman, said the changes "are worse than expected." He called
Pace's argument that 1995 fees need to be readjusted "bogus. "Working retirees,
in effect, are being asked to pay a portion of the cost of enacting TRICARE for
Life (TFL) in 2001 for service elderly, Strobridge said.
He argues the administration is ignoring a law that "pretty clearly states"
payments for the TFL trust fund should be coming out of the Treasury Department'
s budget so they do not impinge on Defense programs.For a detailed chart showing
the TRICARE Fee changes visit
http://www.military.com/TRICARE_Fee .
To comment, write
Military Update,
P.O. Box 231111,
Centreville, VA,
20120-1111, e-mail milupdate@aol.com or visit
www.militaryupdate.com
Sound Off...What do you think? Join the discussion.
----------------------------------------------------------------
Contributed, YNCS Don Harribine, USN(ret)
.........................................
Comment
Not only do we want to join the discussion but we need to make a tremendous
number of calls to our elected representatives. Don't forget there is an
election right over the horizon.
I certainly go along with Colonel Steve Strobridge from MOAA when he says that
General Pace's arguments for 'renorming" Tricare fees are bogus . Rumsfeld is
using the JCS as lapdogs to defocus the heat on his hide when in reality the JCS
only responsibility is the readiness portion of military healthcare.
Remember the military healthcare budget was taken from the line and one of the
reasons given in 1992 for taking away the management of Military Health Care
from the Military was because the doctors (Service SGs, USA, USAF, USN) didn't
know how to manage the delivery of military health care.. quote:
"Prior to 1992, providing health care was the responsibility of each of the
Surgeon Generals for their respective branches utilizing monies requested and
received by them through their service Chiefs. Naturally these funds were
received in a massaged state. If, during the fiscal year, a shortfall occurred
they had the privilege of returning to their Chiefs for redress. The process was
kept in house. "
This is no longer the case and the line has been removed entirely from this
decision making process. The Chiefs, in 1992, rolled over and played dead and as
a result of that the final responsibility for military medical care has since
1992 and to the present day resided with the Assistant Secretary of Defense for
Health Affairs.
So, with direction from the Congress, in 1992, the Defense Health Program was
created with the mandate that the Assistant Secretary of Defense for Health
Affairs be the responsible authority within the Department for military
medicine..
When they then came up with the DMOC committee, which was established in April
of 1999 by the DepSecDef and USD, the voting members were USD (P&R), Under
Secretaries, and OASD (HA), and the Vice Chiefs...All of these people had,
except one, no prior knowledge of managing a health care delivery
system....Please notice the complete lack of the service SGs on the committee
structure, who provide the service, as voting members.... I guess they were just
consultants..
My own opinion is that money for the medical care of military members, both
active and below <65 retired, should be part of the price paid for the defense
of this country and appropriated and authorized through the DOD budget. The >65
retired Medicare eligibles's Tricare portion is dedicated mandatory spending
authorized by public law.
The irony to all the wailing going on by Rumsfeld is that the Congress has in
affect told him, and his boss, that if they will ask for the money in the DOD
budget for the payments to the military Medicare retiree trust fund for the
under 65s, they will respond. The culprit here is the President and OMB, which
he controls, telling the Secretary of Defense, no way do you ask for that
money..
Just to make a little point here of double talk, let me direct you back to a
statement made by Deputy Secretary Chu during a press conference in August 2001
which I posted to our e-mail net
To: restricted, Undisclosed Key Military, lonestargrp@West-Point.Org
Subject: Dr CHU USD P&R and Fed Langston vs ESTHER SCHRADER of the Washington
Post and LA Times From: B Gen Bob Clements USAF ret <p38bob@deepwell.com>
Date: Sun, 12 Aug 2001 10:33:22 -0700
Cc: esther.schrader@latimes.com, News Services
I would again , hopefully not to be repetitious, like to publish portions of a
DoD news interview with David Chu, the Under Secretary of Defense for Personnel
and Readiness. Being a very powerful and important man, he answers only to the
Secretary and to his ultimate boss who appointed him, The President of The
United States.
..................
Dr Chu's Press Interview................... http://www.defenselink.mil/news/Aug2001/t08082001_t0808chu.html
Q: Could I take you to a completely different subject, the new package of
healthcare benefits especially for military retirees. Could you just sort of lay
out for us what kind of financial drain that's going to be in the -- or
commitment, financial commitment that's going to be in the years ahead; your
concerns about fully funding that, the growth in financing that that's going to
pose upon the Department, and I guess the general notion of whether or not
you're creating a class of retirees in this country that's somewhat separate
from other senior citizens.
DR. CHU: Okay. Let me take the last portion of your question first, because I
think there is a classic question which is yes, we are creating a class that's
somewhat separate, and that is the Congress' decision. And I take the spirit of
the decision that these men and women have served their country in uniform, have
risked their necks for us, typically over a long period of time, 20 years or
more, and that part of our compact with them is this is how we honor them in
their old age. So I don't want to dodge the fact that this is a better package
than the average American is going to receive, but these people have also done
things that are different from the average citizen. And the Congress has spoken
on that. And I think, in my judgment, unless it chooses to revisit the issue, it
has settled it.
Now, then we get to the practicalities, which you've raised, which include how
we pay for it. And the short answer is we will pay for it. In other words, we're
not worried about the financing. We realize this is a commitment the country has
made to these people. You know how the Congress has arranged this in terms of
its mechanics, and that is that the cost for these individuals will be paid out
of a trust fund whose unfunded liabilities will be assumed by the Treasury, and
whose future liabilities become the province of the Department of Defense. So we
will pay an accrual charge every year for what a board of actuaries estimates
will be the incurred incremental future costs by that year's service by the
current cohort of military members.
That actually won't start, as you all know from the details of this, till 2003
and 2002. We foot the bill simply because no one -- correctly, no one thought
we'd get this trust fund set up and all the mechanical details worked out in
time -- how were they going to get paid, and, you know, how do we build the
trust fund, all those sorts of questions.
And as you know from the budget documents, for TriCare for Life, including the
pharmacy benefit, we've allotted in fiscal 2002 $3.9 billion in the DoD budget
for this purpose, which is our best estimate at this structure (sic) of what it
will cost. Now, that is not the full cost, because as you recollect, if the
retiree or his or her dependent, as I say, goes downtown for medical care, in
other words, goes to a non-military treatment facility, Medicare actually is the
first payer under those circumstances.
But the funding -- the short answer to your question is, yes, we recognize this
will be a special cost of retirees when this benefit begins, and it's already
begun because the pharmacy benefit started on 1 April. My take on this is the
Congress has made its political decision this is a group of Americans that's
rendered special service to the country, and this is part of our responsibility
to them. We will fund it, and we will fund it through an accrual mechanism in
the future. In 2002 it's a cash budget item for the Department, which we think
we have covered properly. And, obviously, there are some uncertainties
associated with that, but we -- I'm on the hook to deal with those and
execution, make sure everybody gets taken care of. And you can all judge by the
complaints, or lack thereof, next year whether we've done a good job or not.
............
My personal Signature chk6 bob
"If It Weren't For The United States Military" "There Would Be NO United States
of America"