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The Department of Defense (DoD) is asking Congress in the fiscal year 2014 defense budget to increase cost sharing for military retirees on TRICARE, despite being refused in previous years.

Health care costs account for almost 10 percent of the total DoD budget, which is expected to reach $49.4 billion in FY 2014. Last year, Congress did allow increases to TRICARE Prime enrollment fees for military retirees under age 65, as well as to some adjustments to pharmacy copayments. The DoD claims it could save $297 million in FY 2014 with the following new proposals.

Many of the proposals, such as tying increases to retired pay levels, were recommended by the 2007 Task Force on the Future of Military Health Care. For example, instead of a set dollar amount for TRICARE Prime, the premium would be set at 2.95 percent of retired pay with a minimum payment of $594 per family and a maximum of $750 in FY 2014. And for general and admiral retirees — who earn more retired pay percentage-wise compared to other ranks — the ceiling would only be set at $900 per year. These fees would increase annually until they reach 4 percent of retired pay in FY 2018. Then the minimum would be $594 and the maximum would be $1,226. And for general and admiral retirees, the maximum would be $1,840 per year. Fees for individuals would be set at 50 percent of the family fee.

New enrollment fees would be introduced for TRICARE Standard and Extra of $70 for individuals and $140 for families. Those fees would increase to $125 for individuals and $580 for families by FY 2018. In addition, enrollees would be responsible for deductibles of $160 for individuals and $320 for families. Those deductibles would rise to $290 for individuals and $580 for families by FY 2018.

Another new proposal is the creation of a $3,000 catastrophic cap for all TRICARE enrollees per family. The cap will exclude enrollment fees.

TRICARE for Life (T4L) enrollees would also be required to pay a fee for the first time, equal to 0.5 percent of gross retired pay up to a maximum of $150 ($200 for generals/admirals). That fee would increase by a quarter of a percent a year until it reaches 2 percent in FY 2018, with a ceiling of $613 ($818 for generals/admirals). The fee would be applied per person, not per family. And there is no discussion of Medicare premiums; retirees must enroll in and pay the premiums for Medicare before they are eligible for T4L.

And for the first time, President Obama would exclude those who were medically retired from the military, as well as the families of servicemembers who fell in the line of duty.

Meanwhile, DoD is proposing additional changes to the pharmacy program. For prescriptions filled in retail outlets once a month, copays would be $6 in FY 2014 and rise to $9 in FY 2017. For brand name prescriptions, copays would be $28 in FY 2014 and rise to $34 in FY 2017. Copayments for three-month refills from the mail-order pharmacy with generic drugs would have no copayment until FY 2017, when a $9 fee would be implemented; copyaments for three-month refills on brand name drugs would increase from $28 in FY 2014 to $34 in FY 2017. The fees for non-formulary drugs would be $54 in FY 2014 and rise to $66 in FY 2017. Prescriptions filled in military treatment facilities would continue to have no copayment.

The American Legion will carefully watch the continuing budget process, and will make the necessary response to congressional attempts to change TRICARE.

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