Panel hears testimony on TRICARE fees. Representatives of The Military Coalition of which AUSA is a member, were invited to testify March 16 before the House Armed Services Personnel Subcommittee on the military health system and the Defense Department’s proposed cost saving initiatives.DoD wants to raise TRICARE Prime enrollment fees by $5 per month for a family and raise retail pharmacy co-pays by $2 or $3. No changes are proposed for TRICARE Standard or TRICARE for Life, and military disability (Chapter 61) retirees and survivors would be exempt from the Prime fee increase. Co-pays would be eliminated for generic medications ordered through the mail-order pharmacy system.In his opening statement, subcommittee Chairman Rep. Joe Wilson, R-S.C., said, "For several years the Department of Defense has raised concerns about the rising cost of health care and the challenge of maintaining the viability of the military health system over the long term. "We must seek reasonable solutions for ensuring the availability of world class military health care, not only to our returning wounded and injured and their families, but to future generations of brave young men and women who answer the call to serve our nation."The Department of Defense has proposed several measures aimed at reducing the cost of providing health care to our service members and their families and military retirees. "The plan is a more comprehensive approach than previous cost cutting efforts.  That being said, these proposals will affect not only beneficiaries, they will also affect the people who support the military health care, such as pharmacists, hospital employees and contractors."Wilson wanted to know what the coalition supported or opposed and asked them to recommend any alternatives to the proposals.AUSA and other members of the coalition submitted a statement to the subcommittee.  Statutory formulas govern nearly all other major military compensation elements.  In this regard, there are formulas for setting and adjusting military retired pay, pay raises, survivor benefits, and more. But current law leaves much of the TRICARE fee-setting-and-adjustment process to the discretion of the Secretary of Defense.  For many years, no secretary proposed any increase in TRICARE fees, leading beneficiaries to believe there would be no increases. In 2007 and 2008, beneficiaries were shocked when a new secretary proposed tripling or quadrupling fees.We particularly appreciate the proposed elimination of co-pays for the mail-order pharmacy system and the exemption of survivors and military disability retirees from the TRICARE Prime fee increases. But we object strongly to the Department’s proposed linkage of future TRICARE Prime fee adjustments for non-disabled beneficiaries under age 65 to an as-yet-unspecified measure of health cost growth for the broader population that DoD actuaries assume would grow at an average of 6.2 percent per year. The coalition believes opportunities for far greater cost savings are missed by continuing shortfalls in Defense Department efforts to pursue including:– More effective promotion of the mail-order pharmacy.– Consolidation of redundant/competing service and contractor systems.– More effective management of chronic conditions and use of technology.– More efficient and effective contracting and acquisition systems.To restore important career benefit stability and limit future adverse retention consequences, we believe Congress should establish in law the following principles:The military retirement and healthcare package is the primary offset for the many unique and extraordinary demands and sacrifices inherent in a military career.Those decades of service and sacrifice constitute a very large, pre-paid premium for career military members’ and families’ healthcare coverage in retirement, over and above the fees they pay in cash. This large, up-front and in-kind premium must be acknowledged in statute to explicitly reject inappropriate, "apple-to-orange" comparisons focused on cash fees paid by military beneficiaries vs. civilians.The way to incorporate this inherently unquantifiable military- unique premium of service and sacrifice in the fee adjustment process is to limit the percentage increase in TRICARE fees in any year to the percentage increase in military retired pay.In light of the testimony to the subcommittee, we were pleased to see that Congress is listening and is introducing legislation that we can support.Rep. Don Young, R-Alaska, introduced a bill (H.R. 652) that caps annual TRICARE fee increases at one-half of any annual increase in military retired pay. A bill (H.R. 1092) offered by Rep. Walter Jones, R-N.C., would establish the principle that it’s Congress’ responsibility, not the Pentagon’s, to establish when and by how much military health fees will be increased. In doing so, the bill would remove the Secretary of Defense’s current authority to make virtually unlimited increases in four specific areas:

1. Enrollment fees for retired members and survivors in TRICARE Prime, the military managed care plan. 
2. Pharmacy co-payments. 
3. Enrollment fees for the TRICARE Reserve Select program that helps maintain health coverage continuity for Guard and Reserve families. 
4. Retiree and survivor co-payments for inpatient care.

While AUSA appreciates Congress’ consistent support in recent years to protect beneficiaries from disproportional health care fees, we know that we have a tough fight ahead of us. We ask that you join us in the fight by taking the time to let your elected officials know where you stand on this issue.  Go to www.ausa.org, click on "Legislative Action Center" at the bottom of the page.  Put your zip code in the box entitled "Elected Officials and then click on the prepared letter "Stop Erosion of Health Care Benefits."FY 2012 President’s budget: TRICARE pharmacy co-pays. The Capital Focus in the April 2011 AUSA NEWS discussed the Defense Department’s proposed changes for retail and mail order pharmacy co-pays. The article incorrectly showed what the co-pays would be if the department’s plan was implemented.Located below is a chart which correctly outlines the proposed changes.