Higher Tricare premiums?

[WM]

Anyone else following this? Gates made a speech yesterday about DOD budget cuts and mentioned the possibility of raising premiums for retirees "of working age." Which I hope will be us in a few years

Has there been talk of increasing premiums in the past? Is this something that comes up periodically only to be shelved? Or is this new and something to pay attention to?

relevant excerpt from his speech:

"Finally, for some time I have spoken about the department’s unaffordable health costs – and in particular the benefits provided to working age retirees under the TRICARE program. Many of these beneficiaries are employed full-time while receiving their full pensions and often forgo their employer’s health plan to remain with TRICARE.

This should not come as a surprise, given that the current TRICARE enrollment fee was set in 1995 at $460 per year for the basic family plan and has not been raised since. During this time, insurance premiums paid by private sector and other government workers have risen dramatically. For example, the fees for a comparable health insurance program for federal workers costs roughly $5,000 per year.

Accordingly, with the Fiscal Year 2012 budget we will propose reforms in the area of military health care to better manage medical cost growth and better align the department with the rest of the country. These will include initiatives to become more efficient as well as modest increases to TRICARE fees for working age retirees with fees indexed to adjust for medical inflation. Potential savings from these initiatives could amount to nearly $7 billion over the next five years."

 

[braumeister]

Balancing the budget on the backs of its most patriotic citizens?
That's the way I see it.

 

[JDARNELL]

I noticed at MOAA said that they wanted to limit fee increases to no more than the percentage military retirement increases. Sounds to me like they are willing to concede an increase is necessary but still trying to keep the cost from going up to much. In the past it was no increase no way.

Tomcat98

 

[martyb]

What's a "working age" retiree? If an active duty person does 20 yrs & retires a 38 or 39 I assume that's within the definition. What about age 50? 55-65? Has anybody seen an actual proposal of how they'll define it? Or...the amounts of possible increases in cost?

 

[braumeister]

What they mean by "working age" is anywhere between military retirement and 65 (Medicare age).

 

[oldtrig]

I don't remember any of my grand parents ever being retired. They worked to survive. The also died earlier than people do today.
I remember my Mother being in the hospital in the late 50's and my Dad paying the bill out of his billfold. Where did things go wrong? People seem to be obsessed with retiring and making sure they have health insurance. I also see a lot of fat people. I never remember seeing hardly anyone fat in the 50's. The reason is they did not sit on their b_tt. We have become a nation of lazy people. I have decided that I will continue to work as long as I can get out of the bed in the morning. I could not even think of sitting around a house bored to death worrying about health insurance. I am probably off subject but had to vent. I guess it is because I just got back from Walmart and seen all those fat lazy people. Over and out. oldtrig

 

[samclem]

I have decided that I will continue to work as long as I can get out of the bed in the morning. I could not even think of sitting around a house bored to death worrying about health insurance.

You are doing the right thing. If, in this entire world with all its wonderful possibilities, temptations, joys, and good works that need doing, none of it appeals to you more than going back to the job every day, then you should definitely keep going to that job.

To the subject: MOAA's stance as reported by Tomcat seems reasonable. But timing is everything--make the sacrifice too early (like now) and then you'll get to "give again" when the global cuts come to all government programs. Make the "payment" when it will do the most good. It's not smart to jump first--hold hands with everyone else who is being cut, and try to get some promises of stability in the future (whatever that is worth).

 

[martyb]

I guess it is because I just got back from Walmart and seen all those fat lazy people. Over and out. oldtrig

I think that's the headquarters, ain't it?

 

[martyb]

And yes...."ain't" is in the official Texas dictionary!

 

[Nords]

I never remember seeing hardly anyone fat in the 50's. The reason is they did not sit on their b_tt.

Hmmm, I guess WWII rationing was over but I wonder how much of the "skinny" was due to chronic malnutrition, alcohol, and smoking.

I bet an inflation-adjusted graph of food prices between the 1940s and now would show that today's food is cheaper than ever.

 

[braumeister]

I bet an inflation-adjusted graph of food prices between the 1940s and now would show that today's food is cheaper than ever.

Basic food -- I absolutely agree.

But most of us don't really eat much basic food any more. We buy it after all that processing into the myriad forms you find in the packaged and frozen food aisles of the market.

 

[MichaelB]

Hmmm, I guess WWII rationing was over but I wonder how much of the "skinny" was due to chronic malnutrition, alcohol, and smoking.

I bet an inflation-adjusted graph of food prices between the 1940s and now would show that today's food is cheaper than ever.

No doubt in my mind this is the leading cause of obesity around the world.

Basic food -- I absolutely agree.

But most of us don't really eat much basic food any more. We buy it after all that processing into the myriad forms you find in the packaged and frozen food aisles of the market.

This is the other.

Never before has so much food been available to so many people at such low prices. More so for processed food products.

 

[frank]

I think that early retirement is really financial independence. going from what you have to do to support your family to the point where you can afford to live and do what you enjoy at the same time. medical insurance costs are moving this further and further away from the average american. government workers have good medical coverage into retirement paid mostly by taxpayers, whether local, state, or federal workers. I think the insurance lobbies ought to be outlawed and the government should regulate health coverage so it is equally affordable to all workers headed toward retirement. retirement isn't always sitting around on your butt, you need to get a life other than your job.

 

[Rustic23]

Tricare prime - $450 a year, not month, and this has been discussed before here. While the services not longer use 'free health care for life' as a recruiting pitch, they use to, and that is what, IMHO, lead to the current Tricare system. Medical benefits are but one of the packages that effects recruiting and retention, however, a change will have some effect.

 

[WM]

Thanks for the thoughts/info (and the random side conversations are always enjoyable too )

I'm shocked that the premiums are as low as they are, so won't be surprised if they go up a bit. MOAA is a good idea, I'll check there for info if I feel the need to keep up on things.

 

[mickeyd]

I can sorta get where Gates is going with this proposed Tricare increase. They seem to be zeroing in on retired military folks who get a job after retirement and do not enroll in the medical plan that the new employer offers because it is not as good or as cheap ($230 or $460 annually) as Tricare. This costs the military big bucks and the employer plan gets off scott free.

The plan by Gates does not seem, however, to address those who do not have an option for alternative medical insurance (including spouse and kids) prior to age 65 because they have no job that has a medical plan. These folks have no option and Tricare is their only choice. They would seem to be the most hurt by this increase.

If Tricare could issue some kind of edict and say that if a retiree has available an alternate medical plan thru his work or spouses work, they must chose to take the employer plan rather than remain on Tricare.

 

[braumeister]

Neither of those alternatives is really fair, but I see where you're coming from.

What Gates is upset about is the fact that some people say "OK, Mr. prospective employer, how about if you don't give me any health benefits, because I can use my Tricare. Instead, just increase my salary by half of what the company health care benefit would have cost you. That's a win-win for both of us."

Clearly, something will have to be done, because Gates has his orders to cut costs drastically in DOD and this is part of it. I just hope reasonable heads prevail.

 

[Nords]

If Tricare could issue some kind of edict and say that if a retiree has available an alternate medical plan thru his work or spouses work, they must chose to take the employer plan rather than remain on Tricare.

"Second payer" to all other insurance?

The problems start cropping up when the two plans are substantially different in whatever area the retiree's having problems with.

But no premium increases since 1995 seems to be worth far more, actuarially speaking, than a COLA pension. How much has the average high-deductible policy gone up over the years, or some other form of coverage that has cheap premiums?

I wonder if the Navy could get along with 100 fewer admirals to push their programs through the Pentagon and the halls of Congress...

 

[mickeyd]

But no premium increases since 1995 seems to be worth far more, actuarially speaking, than a COLA pension.

Good point Nords, but many vets were "promised" free healthcare for life when they signed up for the duration. The rules were already changed a few years ago for these guys and they were required to enroll in Medicare and pay the price. Now should they be required again to sacrifice? Maybe so. Maybe not.

If they sacrificed doing their dangerous jobs and are now advised that the deal has been changed after the fact, it's a slap in the face to the guy in the uniform. Will the current recruit (the veteran in 20+ years) assume that his "deal" will also be changed? If so, perhaps he will chose not to sign on the bottom line of that enlistment contract or commissioning.

 

[Nords]

Good point Nords, but many vets were "promised" free healthcare for life when they signed up for the duration. The rules were already changed a few years ago for these guys and they were required to enroll in Medicare and pay the price. Now should they be required again to sacrifice? Maybe so. Maybe not.
If they sacrificed doing their dangerous jobs and are now advised that the deal has been changed after the fact, it's a slap in the face to the guy in the uniform. Will the current recruit (the veteran in 20+ years) assume that his "deal" will also be changed? If so, perhaps he will chose not to sign on the bottom line of that enlistment contract or commissioning.

I think you're worrying about the retention of the wrong people!

I think that the veterans talking that sort of sentiment are trying to hold on to something that I believe is already gone or will be starved out of existence within five years.

Rhetoric aside, I think the Congressional sentiment is that Bud Day got TFL and that takes care of the government's obligation to people who were "promised" free healthcare for life. No further complaints in that area will get a hearing in the judicial system, let alone Congress.

But although I remember hearing about plenty of those promises being made to WWII & Korea vets, I don't know when that promise petered out. I'm pretty positive it wasn't being handed out in the late 1970s, not that I was paying attention at the time. No complaints in that area will get a hearing in the judicial system or Congress.

Based on the studies, I suspect that today's economy and recruitment/retention bonuses have a far bigger effect on today's servicemembers. I don't think today's troops feel any connection to the military retirees or can even imagine a retiree's situation applying to theirs. The last major change to retention was REDUX, and that was affected by the Internet gold rush as well as REDUX's lower pension benefits. These days I find it hard to imagine that "loss of free healthcare for life" would make even the top 10 reasons for leaving (or not joining) the service. My daughter would be Exhibit A of that attitude.

Here's what I see as my choice in the next few years:
1. $38.34/month for me, spouse, and daughter (until she's age 23/26). One day my PCM, a civilian clinic seven minutes from my door, calls me up to let me know they're no longer taking Tricare patients. This is the clinic filled with residents and teaching doctors from the UH medical school, where I can get an appointment for tomorrow, and where I can be seen on standby in a couple of hours. I've been deliriously happy with this place.

Being in a state with a high density of military bases, I go 25 minutes down the road to Pearl Harbor's Makalapa Medical clinic and wait in the long lines for military medical's finest to wade through the active-duty patients. Or, I can ask the Tricare ombudsman to find me any doctor on this 600-sq mi island still taking military retirees.

Active-duty leaders become aware that their shipbuilding and weapons programs are being canceled to pay for my cheap healthcare. Training and other active-duty benefits like housing allowances and special pays suffer from budget cuts. Advocacy groups like MOAA and the VFW face negative-publicity campaigns against the unpatriotic behavior of the veterans. [-]Resentment rises in the ranks over paying for geezer general's colonoscopies.[/-] Sorry, that bit of alliterative rhetoric got away from me.

2. We raise my Tricare premiums to $125/month, perhaps still far below the premiums paid by most Americans. (This is about what Rice University would charge a healthy teenager.) Or, maybe a high-deductible plan for $75/month. I don't know the number but I suspect it's higher than $45/month. I'd love to see a Tricare premium tied to some health-insurance index, or set to some reasonable starting point (based on civilian HMOs?) and then indexed for the CPI.

My clinic would stay with me. Better still, I wouldn't have to keep worrying about last-minute extensions on Tricare reimbursement rates or bankrupting the Tricare budget. And I wouldn't have my daughter pissed off at me.

-----------------

Spending an extra $500/$1000 per year wouldn't send me back into the workforce or bankrupt me. Having to go back to Makalapa Clinic or Schofield Barracks or our local VA (such as it is) would drive me nuts. I wouldn't like the trend in higher premiums, but it's better than the government's apparent current plan to continue to honor a promise that no doctor in the country will agree to work for.

 

[Nords]

Today's "The Military Guide" blog post (Monday 17 Jan) ties together this thread's comments with the thread on the letter MOAA sent to CNBC and another thread on Tricare issues.

I don't know how fast these debates usually move, but I suspect that it'll take a new Congress a very long time to get around to paying attention to SECDEF's complaints. I don't think there'll be any more Tricare hikes in the next five years than there've been in the last five years, but it'd be interesting to see some sort of research data on how many doctors are agreeing to the reimbursement rates-- and whether it's growing or declining.

 

[samclem]

Here's one way that TRICARE will be a worse deal than comparable civilian insurance.

AS many folks know, the newly passed health care law mandated that private insurance plans allow children to remain on the parents' policy. TRICARE wasn't included in this arrangement (my guess--either because it was overlooked in the rush to get the bill passed, or in order to keep from making the govt cost for the legislation go up further). Well, that's been fixed, and it looks like it will cost folks military folks quite a bit to keep Junior on the plan.

Complete article at Military.com. Here's their synopsis:

National Defense Authorization Act of 2011 includes a provision to offer the "TRICARE Young Adult" program, which opens TRICARE coverage for adult dependents up to age 26. Unfortunately, the new TYA program comes with a large price tag. Some estimates show the annual premium could go as high as $2,400 or $200 a month. By comparison, Health and Human Services estimates that under that Health Care Reform Act civilian families will see an increase in annual premiums of somewhere between $62 to $149 a year.

I don't know if the HHS estimate of the civilian costs has proven accurate. I could guess . . .

Is this a "broken promise"? Not as I see it--keeping the kids on TRICARE until they are 26 was never part of the deal. But it does stink a little that the law forced private companies to keep these kids on the plans, and the govt's own insurance plan for servicemembers couldn't/didn't meet the same cost bogey ("families will pay up to $149 per year") used to sell the law when it was being debated.