House committee votes to boost Tricare fees

May 15, 2011

The House Armed Services Committee has endorsed the Obama administration’s proposal to raise out-of-pocket costs for working-age retirees in the military health plan known as Tricare, the first increase in 16 years.

Retired service members who are still eligible to work would pay $520 a year for family coverage starting Oct. 1, up from $460. Premiums for individual plans would rise to $260 from $230.

But if Congress approves the plan, passed in committee last week, the small bump in premiums the Defense Department says it needs to contain Tricare’s exploding costs would be limited.

Future fee increases would be tied to the cost of inflation, traditionally about 3 percent, instead of growth in medical costs, a sum closer to 6 percent. With military health costs projected to hit $65 billion in five years, the Pentagon says the cost of Tricare premiums needs to jump by more than 3 percent a year.

The long debate over how much retired members of the service should be asked to pay for their health care now moves to the Senate, which is expected to take up the defense budget in June.

Prospects for similar action in the Senate have improved since Sen. James Webb (D-Va.) vowed in February to block any Tricare fee increase this year. In his latest statement, Webb, chairman of the Armed Services Committee’s personnel subcommittee, said he is keeping an open mind about initiatives to improve the efficiency of military health-care benefits.

“While I have strong reservations regarding the administration’s proposed enrollment fee increases based on the fact that retirees have earned this health care benefit through their years of service, I do plan to keep an open mind” Webb said at a May 4 hearing of his panel.

He called Tricare’s low fees a “moral contract” with service members. The House committee expressed the same sentiment last week, when it added a provision to the defense bill that would express “the sense of Congress” that career members and their families make “extraordinary sacrifices to protect freedom for all Americans and that those sacrifices constitute prepayment for health care during retirement.”

Military service groups lobbied for the language to discourage future Congresses from raising Tricare costs too much.

“That’s huge to us,” said Steve Strobridge, director of government relations for the Military Officers Association of America, among the most influential service groups.

Defense Department spokeswoman Cynthia Smith said the agency does not comment on pending legislation.

The House committee’s personnel panel, led by Rep. Joe Wilson (R-S.C.), had voted to block any Tricare increases this year. But when the full committee took up the issue, Rep. Howard P. “Buck” McKeon (R-Calif.), the chairman, called the increase “sensible.”

Lisa Rein covers the federal workforce and issues that concern the management of government.
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