Tom Coburn’s cuts: Military’s Tricare Prime health care program targeted

July 24, 2011

by Walter Pincus

Editor’s note: Sen. Tom Coburn last Monday released a study that he said would achieve $9 trillion in deficit savings over the next decade. We are looking at parts of the proposal.

Sen. Tom Coburn (R-Okla.) wants to cut taxpayer funding for non-military elements of the Defense Department, starting with making retired, uninjured service members pay more for what he described as “extremely low-cost health care for life” for themselves, their spouses and dependents under the Tricare Prime system.

For military retirees eligible for Medicare, he also wants to raise the co-payments that they are charged to be in Tricare for life, the second payer for health care after Medicare. In addition, he wants to increase low fees that Tricare beneficiaries pay for pharmaceuticals purchased at their local drugstores.

Former defense secretary Robert M. Gates proposed raising Tricare Prime enrollment fees for single retirees from $230 a year to $260 a year and fees for retiree families from $460 a year to $520 a year. Coburn wants the fees to be much higher and more in line with private-sector health plans.

Part of his concern is fairness, first for uninjured veterans who, for example, served in Iraq and/or Afghanistan but “leave the military without serving 20 years [and] are not entitled to any of these health-care benefits.” They represent some 70 percent of those serving, according to Pentagon officials.

Another comparison he makes is to other federal government workers whose plans are not as cheap. A medical doctor, Coburn told reporters last Monday: “Nobody in the country, as a single person working 20 years for the government, should be able to get health care for $250 a year. Nobody was ever promised that, and nobody should be able to do that.”

Instead, he wants to increase the enrollment fee for single retirees to “approximately $2,000 per year and $3,500 for a family.” At the same time he would limit out-of-pocket expenses at $7,500 for those retirees with families. He thinks these changes could save $11.5 billion a year.

His Tricare for life would require retirees to pay up to $550 for half the initial cost not covered by Medicare and then up to $3,025, after which all costs would be paid by Tricare. This change could save $4.3 billion a year.

Coburn wants to reduce the $8 billion annual government share of the cost of drugs that Tricare beneficiaries purchase from their local private retail pharmacies rather than buying them at lower cost by mail order or at military base facilities. Where the price is now $3 for a 30-day supply of a generic drug and $9 for a brand-name from private pharmacies, Coburn would raise that to$15 for generic and $25 for brand names and save some $2.6 billion a year.

Coburn told reporters he has no doubt about the reaction to his Tricare ideas.

“There’s no question,” he said, “. . . retired military, they won’t like what I’ve done. But the fact is is nobody’s going to like what we’ve done, because everybody gets a pinch — everybody. ”

Beyond health care, Coburn has several other proposals that will rattle the Pentagon. He wants to eliminate most of the $1.3 billion-a-year subsidy that supports the Defense Commissary system of 252 grocery stores on military bases worldwide. Prices at commissaries are much lower than at civilian supermarkets; they are listed at cost plus a 5 percent surcharge. That money goes to offset costs of new commissaries or to repair and maintain old ones. It does not pay for salaries and benefits of the roughly 18,000 people who work at the commissaries.

Coburn supports a Congressional Budget Office proposal that would reduce the taxpayer subsidy over five years and see a gradual raise in prices so commissaries could become self-sufficient. The increase in cost, according to the CBO, would amount to $400 per service family per year and save the government about $900 million annually.

He also wants to close down the Congressionally Directed Medical Research Program, which for more than 20 years has added around $200 million a year primarily for breast, lung and prostate cancer projects that have to be managed primarily by contractors. Coburn’s option is to “transfer funding for cancer research that affects the general population back to [the National Institutes of Health] and reduce the administrative costs of administering this research for savings.”

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