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Key developments in the world of federal employee benefits: health, pay, and much more.

TRICARE Triage

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Some military retirees are finding a proposal for TRICARE fee hikes hard to swallow.

During a hearing earlier this week on a range of military budget issues, Adm. Gary Roughead, chief of naval operations, told lawmakers the ballooning expense of providing health coverage for retirees "eats into [funding for] our other programs." Roughead and two other high-ranking military leaders recommended that for the first time in more than a decade, the Pentagon ask retirees to contribute more money to their insurance coverage. Several Government Executive readers argued, however, that service leaders don't understand the effect higher health insurance fees would have on rank-and-file military retirees.

"I agree with letting the admirals pay more," a reader named George commented. But "for them to suggest [or] request [a fee hike for] retirees who receive a meager sum compared to their retirement amount is bordering on insane."

Paul Kruger said retired flag officers don't necessarily depend on TRICARE and might not understand its limitations. The Government Accountability Office recently reported participants have trouble finding providers -- particularly mental health professionals -- who accept TRICARE as insurance.

"They will never be turned away from a doctor or clinic [that] refuses to accept TRICARE," he commented.

Alan Goldstein wrote in to say military leaders were approaching the problem from the wrong direction. "Get the ballooning cost of health care under control by proper management; not charging the retirees more," he said.

Meanwhile, the Defense Department is looking at other ways to control TRICARE costs. One possibility is to do away with incentives for participants to pick TRICARE over other health insurance programs. On April 9, the department published a rule in the Federal Register implementing a law that would forbid employers from encouraging TRICARE-eligible employees to stay in the program, through incentive payments or other inducements.

Defense estimated the annual cost of TRICARE per active-duty family member under 65 is $3,975, and in 2010, as many as 14,921 enrollees could leave TRICARE for another employer-provided insurance plan. In an April 27 letter to lawmakers, the Government Accountability Office estimated the rule could save $64.1 million in fiscal 2010 and generate savings of $81.8 million annually by fiscal 2015.

The Federal Employees Health Benefits Program and TRICARE are unique in their size. But when it comes to cost containment, they face many of the same challenges as other health insurance programs. Supporters of President Obama's health care reform law hope more universal coverage will reduce emergency care costs and preventative care will mean Americans need fewer and less expensive medical procedures and services. But those changes could take a long time. Until then, TRICARE is joining others in looking for solutions.

 
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