Another Innuendo Over a CBO Report: TRICARE For Life—Update
In my “Another Innuendo Over a CBO Report: TRICARE For Life,” I pointed to a message from a “BG Bob Clements, USAF Ret (P38 Bob)” that is making the rounds through the internet, claiming:
Seems as though our President Elect has placed a priority on cutting [TRICARE For Life] out of the budget as a means to provide funding for those things he promised during the campaign…Just another move to slight those of us who dedicated much of our adult lives to the defense of our country.
Subsequent to my post, it has been pointed out, and correctly so, that the Veterans Affairs Department takes care—or is supposed to take care—of veterans’ health and other matters and that the Pentagon (DoD) takes care of active duty and retired military personnel.
General Shinseki, as the new head of VA under Obama, has promised to totally overhaul the way the present VA treats veterans. “Through their service our veterans have sacrificed greatly…They are clients, not customers, whose best interests are our sole reason for existence,” he told the Senate Veterans Affairs Committee during confirmation hearings.
These words from the new VA head, as those in the original post, are quoted not because the VA will have anything to do with TRICARE For Life, but because they are part of the overall Obama administration philosophy on our military: active duty, retired and veterans.
Those who doubt Obama’s commitment to our military and veterans, and those who say that Obama “has placed a priority on cutting [TRICARE For Life] out of the budget as a means to provide funding for those things he promised during the campaign,” I would refer them to Obama’s Senatorial web site, where they will find, among several other commitments to our military and veterans:
Military Funding
Senator Obama backs efforts to expand TRICARE eligibility and reduce TRICARE premiums so that our nation’s service members, Guard members, reservists, and their families can have improved access to health care
The following is the text of “Option 96,” “Introduce Minimum Out-of-Pocket Requirements Under TRICARE For Life”
TRICARE For Life (TFL) was introduced in 2002 as a supplement to Medicare for military retirees and their family members who are eligible for Medicare. The program pays nearly all medical costs not covered by Medicare and requires few out-of-pocket fees. Because the Department of Defense (DoD) is a passive payer in the program—it neither manages care nor provides incentives for the cost-conscious use of services—it has virtually no means of controlling the program’s costs. In 2008, DoD spent about $8 billion on TFL-eligible beneficiaries in addition to amounts spent for those individuals by Medicare. This option would help reduce the costs of TFL, as well as costs for Medicare, by introducing minimum out-of-pocket requirements for beneficiaries. Under this option, TFL would not cover any of the first $525 of an enrollee’s cost-sharing liabilities for calendar year 2011 and would limit coverage to 50 percent of the next $4,725 in Medicare cost sharing that the beneficiary incurred. (Because all further cost sharing would be covered by TFL, enrollees could not pay more than $2,888 in cost sharing in that year. Those dollar limits would be indexed to growth in average Medicare costs for later years.) The true out-of-pocket provisions in Medicare’s prescription drug program, or Part D, are an example of how this option could work in practice. Under that program, any amounts paid by Medicare or by any other insurer are not included when calculating whether a beneficiary has reached the level of eligibility for catastrophic coverage. Currently, military treatment facilities (MTFs) do not charge eligible individuals copayments for medical services or pharmaceuticals. In order to reduce beneficiaries’ incentive to switch to MTFs and avoid the minimum out-of-pocket requirements that are central to this option, DoD would need to establish procedures for collecting payments from TFL beneficiaries seeking care from MTFs. If the savings that would accrue from reduced spending for Medicare were included, the introduction of cost sharing under this option would reduce the federal spending devoted to TFL beneficiaries by about $14 billion through 2014 and by about $40 billion through 2019. Approximately 22 percent of those savings would come from a reduced demand for medical services rather than from a transfer of spending from the government to military retirees and their families. An advantage of this option is that greater cost sharing would increase TFL beneficiaries’ awareness of the cost of health care and promote a corresponding restraint in their use of medical services. Research has generally shown that introducing modest cost sharing can substantially reduce medical expenditures without causing measurable increases in adverse health outcomes. Among its disadvantages, this option could discourage some patients (particularly low-income patients) from seeking preventive medical care or from managing their chronic conditions under close medical supervision, which might negatively affect their health.
Nowhere in this “Option” do I see any recommendations to “eliminate” TRICARE For Life.
While any moves to reduce the benefits under TRICARE For Life or to increase the out-of-pocket expenses for retired military and their families should be strongly opposed by everyone (including yours truly), it should be done based on facts and not on innuendo and fear-mongering.
I have not seen President Obama’s position on this issue yet, but certainly I have not heard him say that he will make it “a priority on cutting it out of the budget as a means to provide funding for those things he promised during the campaign.”
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5 Responses to “Another Innuendo Over a CBO Report: TRICARE For Life—Update”
Your statement “reduce the benefits under TRICARE For Life or to increase the out-of-pocket expenses or retired military and their families should be strongly opposed by everyone (including yours truly)” seems to be contradicted by the way I read the proposal “Option 96,” “Introduce Minimum Out-of-Pocket Requirements Under TRICARE For Life”” as that see to imply there are no out-of-pocket expenses currently for Tricare for Life users. Originally if you were retired from the military you would go to the nearest base and use the medical facility there along with the active duty people. Since a lot of bases closed and the US military medical system primarily treats active duty now they came up with Tricare. Tricare covered retirees, active duty folks and their families. It quickly grew very costly as Option 96 seems to imply. The government has been looking for ways to reduce costs for years with this program. Last year they disallowed companies providing Tricare gap insurance for their employees as a way to discourage retired people from using it if they worked. This functioned like Medicare gap insurance and saved the employer and employee quite a bit on premiums. So Option 96, to me, looks like it will increase cost to retirees and possibly reduce their benefits and thus should be opposed. I haven't read the email you discuss but there is certainly nothing stopping the government from ending Tricare and setting up a different system that may cost a user more (or less) and provide more (or less) benefits.
Cutting Tricare for Life ain't gonna happen, unless it is superseded by some form of “universal” healthcare which makes it redundant and cost ineffective.
Cutting it goes directly against Obama's continually stated goals, as you point out. And if the last 6 days have taught us anything, it's that Obama intends to do his best to keep his promises. The good General, who's yearly military pension is likely more than than most current Americans near his age will ever earn in a year during their working lives, needs to get his panties out of a twist, and STFU unless and until he has some concrete evidence of such a thing to show. And I say that as someone who also pulls in a retired military paycheck, if not nearly as much, and who relies on Tricare (an outstanding benefit) for healthcare.
TRicare has several problems that are not being mentioned. Tricare has very low reimbursement rates and most care providers do not accept it. Also, Tricare is organized like an HMO with a primary care providers. Military medical treatment facilities have stopped enrolling retirees and forced them to find other people. Also, Tricare fails to recognize the collaborative nature of medicine. Your surgeon may accept it but the anesthesiologist may not.
Tricare is a good example that the government cannot really run a health insurance company very well.
Dagpotter:
I said “While any moves to reduce the benefits under TRICARE For Life or to increase the out-of-pocket expenses for retired military and their families should be strongly opposed by everyone (including yours truly),” ), it should be done based on facts and not on innuendo and fear-mongering.”
That means that if Option 96, or any other proposed legislation attempts to ” reduce the benefits under TRICARE For Life or to increase the out-of-pocket expenses for retired military and their families should be strongly opposed by everyone (including yours truly), it should be done based on facts and not on innuendo and fear-mongering.” Sorry, I see no “contradiction”
Time for some facts about Tricare for retired soldiers and their families. There are two tiers or Tricare. Tricare Standard which functions just like any EPO/PPO plan. The cost share is a little higher (75/25 plan) but it provides the beneficiary the flexibility of seeking care anywhere. If a provided accepts assignment then the 75/25 kicks in. If they do not but elect to file the claim themselves rules kick in that limit their collection efforts to 115% of the Tricare allowable. In the very, very rare cases where neither of these conditions is true then the beneficiary is responsible for the entire bill and files the insurance claim themselves. I have never had this happen. Of course, the beneficiary must take some responsibility as with any health care plan. HE OR SHE must ask the providers if they accept the insurance and choose providers accordingly. I always stipulate in any admissions documents that I only accept care from providers that accept Tricare Standard. I also obtain a list of all allied service providers in advance and verify their acceptance status prior to receiving care that requires concurrent care from multiple providers. The second type of Tricare is called Tricare PRIME which is in fact a Tricare HMO. Lower co-pays but must greater limitations on who can provide care. There is also a premium associated with this plan. I carry a Tricare Supplement (which has increased in coast by 250% in the past 3 years. However, under tricare the maximum potential liability for the supplement is 7500.00 (cat cap). Tricare for life would fill this gap. It would make much more sense, instead of funding Tricare for Life, to supplement the cost of a commercial medical supplement policy. The government is not qualified to manage a health care program. They could take a lesson from large corporations who devise and execute self-funded plans for their employees. They are much more cost effective, the employer (government) still writes the plan, and they are professionally managed by a TPA who is qualified to do so. Less Government + Smarter Execution = Success. Handouts and excess tax-funded programs do not work and will be our downfall.