DoD wants TRICARE tied to NHE index

In an April 27 briefing by Department of Defense official George Taylor Jr., The American Legion learned the agency is recommending a TRICARE premium increase tied to the National Healthcare Expenditure (NHE) Index.

Taylor, DoD’s acting principal deputy assistant secretary for health affairs, said the decision was made to use the NHE Index because it was transparent, easy to understand and “fair.” DoD plans to recommend that Congress enact a law establishing a permanent rate of increase for TRICARE Prime tied to NHE increases.

According to Taylor, the NHE Index for 2009 was 3.1 percent; however, over the past quarter-century, the average annual increase has been 6.4 percent.

“This DoD plan is unacceptable,” said Jimmie L. Foster, national commander of The American Legion. “Many of our military retirees live on fixed incomes and their COLA (cost-of-living allowance) just doesn’t keep up with the National Health Expenditure Index.”

While their pay is adjusted for inflation, military retirees have received no COLA increase since 2008. Foster said the federal budget crisis demands sacrifices from everyone and, “We all must be willing to be part of the solution. But using the NHE Index is not an acceptable solution.

“The American Legion wants any TRICARE fee increase tied to the COLA for military retirees. That way, if the government provides no cost-of-living increase, then at least our veterans won’t have to pay more for their health insurance. In fact, we have a pending resolution that calls on Congress to pass a bill to that effect.”

The American Legion’s National Executive Committee will vote on the resolution next week during its spring meetings in Indianapolis.

Currently, annual TRICARE fees are $230 for individuals and $460 for families. DoD has recommended a fiscal 2012 increase of $2.50 per month for individuals and $5 per month for military families. The plan to tie future increases to the NHE Index would begin in fiscal 2013.

Barry Searle, director of the Legion’s National Security/Foreign Relations Division, said the average COLA increase for retirees is 2.8 percent over the past 25 years. “That’s about 4 percent less than the rise in national health expenditures for the same time period,” he said. “So that means more out-of-pocket expenses for veterans and their families.”