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Page 10 | Hurlburt Warrior | Friday, October 28, 2011
Key senators back TRICARE fees; retiree COLAs return
Sens. Carl Levin, D-
Mich., chairman of the
Senate Armed Services
Committee, and John
McCain of Arizona, its
ranking Republican, endorse
President Barack
Obama’s call to establish
next year a $200 enrollment
fee on TRICARE
for Life (TFL), the prized
supplement to Medicare
for 2.1 million elderly
military retirees, their
spouses and survivors.
These influential
senators made their views
known on TRICARE
changes and other defense
budget issues in
separate letters to the
Joint Select Committee on
Deficit Reduction. The socalled
“super committee”
of 12 lawmakers faces a
Nov. 23 deadline to recommend
to the full Congress
a plan to trim the nation’s
massive debt by $1.5 trillion
over a decade.
The first-ever TLF
fee would climb to $295
in 2013 and, under the
president’s plan, would be
raised annually thereafter
to keep pace with health
care inflation. Levin,
however, wrote that annual
adjustments should
match the percentage
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Tom
Philpott
increase in
enrollment
fees to
TRICARE
Prime, the
managed
care option.
And
both the
House and
Senate
versions
of the 2012 defense bill
would raise Prime fees in
the future, for workingage
retirees only, by the
percentage increase given
retirees as cost-of-living
adjustments.
Levin and McCain
also back, with caveats,
Obama’s other cost-saving
initiative for TRICARE —
charging sharply higher
co-payments on drug prescriptions
filled through
the TRICARE network of
retail pharmacies.
Obama wants co-pays
at retail to be brought
nearer to the $45 per
brand drugs paid by federal
civilian employees. But
TRICARE co-pays should
be tied to a percentage
of the government’s cost
per drug and thus raised
automatically with drug
prices. Initially, generic
drugs at retail would be
set at 10 percent of the
department’s cost. After
2013 that would climb to
20 percent. Co-pays for
brand names would start
at 15 percent of cost and
be raised to 30 percent
over time.
But Levin wrote that
setting drug co-pays
based on cost isn’t feasible
because the true cost of
drugs dispensed at retail
outlets is obscured by
manufacturer discounts.
Levin promised to work
with Department of Defense
officials on an alternative
plan that would
achieve the same level
of savings, estimated at
$20 billion over the next
decade.
McCain noted the copay
plan would “lead to
significant increases in
out-of-pocket costs for
most DOD beneficiaries”
to encourage greater
use of TRICARE’s more
efficient mail-order pharmacy
option. He urged
the joint committee not to
embrace the co-pay plan
without first consulting
with Defense officials. Because,
McCain explained,
DOD officials might already
plan to use dollars
raised through higher
pharmacy fees to help
cover $450 billion in defense
budget cuts Obama
agreed to earlier this year.
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“Coordination with
DOD will be necessary to
avoid double counting of
savings from pharmacy
fee changes” in any second
round of cuts required
under the Budget Control
Act, which created the
super committee, McCain
wrote.
McCain’s only suggestion
to soften the blow for
TRICARE users is to have
DOD and the Department
of Veterans Affairs “use
their market force buying
power to negotiate lower
pharmaceutical costs, and
that any savings generated
by that action be
passed on to the men and
women who use these
services. We cannot allow
these fees to be raised
without this action.”
Levin recommended
that the joint committee
support the new TFL
enrollment fee. McCain
called it a “reasonable
step,” considering the
hefty rise in national
health care costs since
Congress established TFL
in 2001.
It “would still keep the
cost of TRICARE for Life
well below costs of comparable
‘Medigap’ policies
paid by non-DOD healthcare
beneficiaries and
would reduce entitlement
spending significantly,”
McCain wrote. He noted
the fee would hit “a group
on mostly fixed incomes
who are vulnerable to
unanticipated changes in
expenses.” Still, he wrote,
it should be considered.
The House Armed
Services Committee also
commented on Obama’s
TRICARE initiatives.
Committee Republicans,
led by Rep. Howard P.
“Buck” McKeon, the
chairmen, urged caution
on any changes to military
benefits in light of career
demands that “are radi-
See tricare page 11