On Monday the White House pressed the Pentagon to rein in Tricare costs and begin a new round of base closings as the Senate took up the National Defense Authorization Act on the military’s 2014 budget.
There are a number of areas of agreement with the initial markup of the Senate Armed Services Committee on the NDAA, but the administration “has serious concerns with certain provisions,” Office of Management and Budget officials said in a lengthy response to the markup.
OMB called on SASC to control Tricare costs at the Department of Defense “while keeping retired beneficiaries’ share of these costs well below the levels experienced when the Tricare program was implemented in the mid-1990s.”
Slowing the growth of Tricare costs would result in savings of $902 million in fiscal year 2014 and $9.3 billion through fiscal year 2018. Those savings were needed to offset projected increases in personnel costs, OMB said.
President Obama has proposed slowing this growth by introducing a new set of enrollment fees and higher co-pays to retirees under the age of 65.
The Pentagon proposed an annual enrollment fee based on a percentage of retired pay for Medicare-eligible retirees in the Tricare For Life Program. Working age retirees in the Tricare Standard and Tricare Extra programs also would face new annual enrollment fees phased in over five years.
The White House also proposed an increase to the current enrollment fee for working age retirees in the Tricare Prime program phased in over the next four years.
As for co-pays, the White House has proposed increasing Tricare Prime co-pays for retirees and their beneficiaries by $4 for medical visits not related to mental health.
Pentagon leaders have said that spiral personnel costs to include healthcare are eating up too much of the military’s annual budgets and putting training and readiness missions at risk.