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:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

    View
  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

    View
  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

    View
  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

    View
  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

    View
  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

    View
  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.

    View

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