Pentagon task force urges 'modest' rise in TRICARE fees

The Defense Department task force seeking a way to ensure the quality, efficiency and fairness of the military healthcare system issued a final report Thursday with recommendations for higher fees for military retirees, which Congress rejected repeatedly when proposed by the Bush administration. The leaders of the congressionally created task force said a "modest" increase in enrollment fees would restore the balance between what the government and the beneficiaries pay.

They said the burden has shifted more to the government because the fees have not changed since 1996. Under the panel's recommendations, the fee increase would be phased in over four years and then indexed to inflation to maintain the balance. The amount retirees would pay would increase with the level of retired pay so that by 2011, families with retirement income under $20,000 would pay $900 a year for the TRICARE benefits, while those receiving more than $40,000 would pay $1,750.

Currently, all military retirees with dependents pay $460 a year, the same as when the TRICARE system was created. Gail Wilensky, the task force co-chairwoman, said the fees could be waived if the beneficiary adopted recommended wellness practices, such as stopping smoking. The task force also recommended increases in the pharmacy co-payments, from $3 for the "preferred" or lowest cost drugs to $15, with higher fees for other medications.

Congress has rejected almost identical proposals, while adding benefits that have driven the cost of military health care for active duty and reserve personnel and retirees from 4.5 percent of the defense budget in 1990 to a projected 12 percent in 2015, if there are no changes.

The estimated cost of $64 billion in 2015 could complicate the services' efforts to replace equipment worn out or destroyed in the prolonged conflicts in Iraq and Afghanistan. Wilensky and Air Force Gen. John Corley, the other co-chairman, emphasized that the thrust of the task force's efforts was to ensure that the healthcare system enhanced military readiness and gave service members, retirees and their dependents the quality care they deserve. They said they also had to improve efficiency, fairness and "balance."

Wilensky said the military system must be viewed in context of the overall government healthcare system, which is in "an unsustainable sprint" in cost.

"We are trying to become more efficient, to moderate the growth for the military," she said at a Pentagon briefing. Corley said the "fiscal realities, the money pressures are real," but the task force did not conduct its study with dollar figures in mind. He acknowledged that without changes in cost of the healthcare system the pressure on other defense programs would grow. "That's why we want to restore balance."

Asked about Congress's resistance to fee increases, Wilensky noted that Congress created the task force because it was aware of the growing financial problems. She acknowledged that next year would be "a particularly challenging time," because it is an election year, "but we believe the Congress will deal with the problem."

The task force recommended a wide range of management improvements, audits and pilot programs to find greater efficiency and to reduce costs. In addition, it said an effort was needed to find the best answer to concerns expressed by the administration about private employers who push workers out of their healthcare system into TRICARE.