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Senators deal death blow to big Tricare fee hikes

Jul. 9, 2013 - 11:30AM   |  
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In a move that virtually ensures only nominal increases in fees for Tricare beneficiaries in the coming year, the Senate Armed Services Committee has flatly rejected a Pentagon proposal to increase retail pharmacy co-pays and fees, mainly for military retirees.

The committee’s version of the 2014 defense authorization bill, S. 1197, approves none of the White House’s requests to increase Tricare enrollment fees for retirees, or pharmacy co-payments for all Tricare beneficiaries.

The Senate committee followed the lead of its House counterpart, which earlier also did not approve any of the proposed fee increases. Without such authorization, the Pentagon must follow current law, which restricts increases in Tricare Prime enrollment fees to no more than the most recent annual cost-of-living adjustment in military retired pay.

That means Oct. 1 fee hikes could be no more than 1.7 percent.

However, neither the House nor Senate version of the proposed defense bill blocks an administration request to increase co-payments for doctors’ visits for working-age retirees and family members in Prime. The administration wants to increase co-pays for most visits to $16 from $12, although mental health visits would remain at $12.

Lawmakers still can offer amendments to the bill before it is voted on by the full Senate. Sen. Lindsey Graham, R-S.C., is among those who said he favors fee increases on retirees enrolled in the military health system.

“Tricare is, quite frankly, unsustainable without reform. We haven’t increased premiums since 1995 but once, and it’s really pitting the military between health care benefits for retirees and funding the force,” Graham said June 11.

Like its House counterpart, the Senate committee rejected the entire Defense Department plan to establish or increase deductibles, fees and co-payments, mainly for working-age retirees.

The administration had sought to substantially increase Tricare Prime enrollment fees, create new enrollment fees and boost deductibles for Tricare Standard and Extra.

The Pentagon plan also would have increased co-payments for pharmaceuticals and implemented a new enrollment fee for Medicare-eligible retirees.

Under current law, pharmacy co-payments may increase annually by the same percentage as the retiree COLA. In years when a COLA increase would result in co-pay increases of less than a dollar, the increase is delayed and combined with the next adjustment, so increases will always be $1 or more.

The 1.7 percent COLA in 2013 does not result in increases of more than a dollar, so pharmacy co-payments are likely to remain at their current levels unless Congress specifically authorizes a change.

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