CBO: Increasing TRICARE Fees Could Save Government Billions

Steve Cukrov/Shutterstock.com

The government could save billions of dollars annually over the next decade by increasing the amount military retirees and their families pay for health care, according to a new cost estimate from the Congressional Budget Office.

The nonpartisan CBO estimated that higher enrollment fees, copayments and deductibles for military retirees in TRICARE Prime and introducing minimum out-of-pocket costs for Medicare-eligibleTRICARE for Life enrollees -- the program for retirees age 65 and older -- would yield much greater savings from 2014 to 2023 than other proposed changes to the military’s health care system.

CBO estimated that other approaches to curbing the Defense Department’s ballooning health care costs could save as much as $100 million. That figure is substantially less than the potential savings that increasing retirees’ health care contributions could yield. Some of those ideas include expanding preventive health care programs, hiring more auditors to crack down on fraud and consolidating the military departments’ medical facilities.

The military’s massive health insurance program offers millions of service members, retirees and their dependents quality care at relatively low cost. That’s what the government aimed for when it created the Civilian Health and Medical Program of the Uniformed Services in 1966, now known as TRICARE. But the price of that success has been high for Uncle Sam: The $53 billion program now consumes roughly 10 percent of the Pentagon’s nonwar budget. By 2030, CBO estimates TRICARE will eat up more than 14 percent of Defense’s budget.

“In 2012, retiree families paid less than one-fifth as much for their care as civilian counterparts with employment-based insurance,” said the estimate from Carla Tighe Murray, a senior analyst in CBO’s national security division. She presented her work at the recent Western Economic Association Conference.

Military retirees enrolled in TRICARE Prime paid about $965 in annual out-of-pocket costs in 2012, compared to the $6,080 annual price tag for civilians enrolled in an HMO plan, according to Murray’s analysis.

Lawmakers have been loath to make any changes that would raise health care expenses for military retirees and their families. Congress agreed to raise TRICARE Prime annual enrollment fees for retirees in 2011 -- the first time the fees have gone up since 1995. Active-duty service members and their dependents do not pay for health care under TRICARE Prime.

House and Senate lawmakers both have rejected the Obama administration’s proposal to increase and create new TRICARE enrollment fees in their respective fiscal 2014 Defense authorization bills. The lower chamber passed its version of the legislation in June. The full Senate still needs to vote on its bill, which the Armed Services Committee reported out last month.

(Image via Steve Cukrov/Shutterstock.com)

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

    Download
  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download

When you download a report, your information may be shared with the underwriters of that document.