Military Alert: Will Obama go after TRICARE?

We had a call last night from a military friend who was concerned about reports that Barack Obama's administration was considering cutting or completely eliminating TRICARE for the military.

TRICARE provides comprehensive health care services for servicemembers, retirees and their dependents through a network of authorized providers and military facilities. It's an excellent program and allows our low-paid military access to reasonable healthcare.

The news that the Congressional Budget Office included numerous proposals to cut or eliminate TRICARE benefits for some or all of our military is burning up the wires in military circles. While the proposed cuts to TRICARE are only a small portion of the 115 healthcare options being presented to Obama and Congress, enacting any one of the proposals could have staggering affects on the bottom line for our active-duty and / or retired military.

I listened Sunday morning to George Stephanopoulos' (This Week) "interview" (and I use that term lightly, almost jokingly) of President-elect Barack Obama. One of the topics that George fed to Obama was that everyone would be expected to sacrifice. Obama expanded on the subject with a little prompting (see below for actual comments and a link to the full interview transcript).

I raised my eyebrow when I heard that one. I don't know of many who aren't sacrificing something already these days. Exactly what is he going to expect those barely hanging onto their homes to sacrifice? What about those without a job? Or is the "everyone" he's talking about only those who are above a certain socioeconomic level? Who's going to decide? There are lots of questions which will be answered over the next few years.

However Obama decides to spread the wealth and enforce sacrifices, I don't believe we should expect any additional sacrifices from our soldiers. The proposed cuts and changes (listed below) would take money from the pockets of retirees who gave their entire working life in service to our country. They worked for their benefits. They earned them unlike many others who get handouts from the government without any expectation of service.

Healthcare is the least we can do for our military. The idea that the incoming administration is even considering increasing costs, cutting benefits or doing away with TRICARE for many is disgraceful. It also flies in the face of the statements Barack Obama made during his campaign.

I'm hoping that everyone will put this issue on their watch list. If it looks like Obama is leaning toward enacting any of the horrific cuts to military healthcare being proposed by the Congressional Budget Office, we need to raise the alarm and make it a HUGE issue.

Here are some of the changes being proposed:

TRICARE FOR WORKING-AGE RETIREES– Fees, co-payments and deductibles would be raised for retirees under 62 to restore the relative costs paid when TRICARE began in 1995. TRICARE Prime enrollment would be raised to $550 a year for individuals from $230. Retiree families would pay $1100 versus $460 today. Co-pays for doctor visits would climb to $28 from $12 and users of TRICARE Standard and Extra would pay an annual deductible of $350 for an individual and $700 for families. Congress has declined to support such increases for the past three years.

FEES FOR ACTIVE DUTY FAMILIES– Dependents of active duty members enrolled in TRICARE Prime, the managed care network, would pay new fees equal to 10 percent of the cost of health services obtained either in military treatment facilities or through civilian network providers. Total out of pocket costs would be capped, however.

To help offset these costs, dependents would receive a $500 non-taxable allowance annually. Those who elect to use alternative health insurance, rather than TRICARE, could apply the $500 toward their health insurance premiums, co-payments or deductibles.

CBO estimates these fees would save $7 billion over 10 years and encourage Prime enrollees to “use medical services prudently.” It also would entice more spouses to enroll in employer-provided health plans instead of TRICARE. The downside, CBO said, would be financial difficulties for some Prime enrollees despite the cap on out-of-pocket costs. Also, CBO said, spouses induced to rely on employer health plans could see health coverage interrupted during military assignment relocations.

TRICARE-FOR-LIFE FEES– The military’s health insurance supplement to Medicare could see higher user costs. Under this option, beneficiaries would pay the first $525 of yearly medical costs plus one half of the next $4725 of costs charged to Medicare. So the extra out-of-pocket cost for TFL users would be up to $2887.50 a year. This amount would be indexed to rise with Medicare costs. The change would save $40 billion over 10 years. But CBO said it also could discourage some patients from seeking preventive care or proper management of chronic conditions. So it could negatively affect some patients’ health.

TIGHTEN VA ENROLLMENT– The VA healthcare system would be directed to disenroll 2.3 million Priority Groups 7 and 8 -- individuals who are not poor and have no service-related medical needs. Estimated savings would be $53 billion over 10 years but Medicare spending would rise by $26 billion in the same period as elderly among these vets shifted to Medicare. (Addded 1/16/09: Option 28. End Enrollment in VA Medical Care for Veterans in Priority Groups 7 and 8, page 56)

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CBO eyes military retirees, vets for health cost cuts
By Tom Philpott
A new report from the Congressional Budget Office shows why some military retirees and veterans could face higher out-of-pocket costs if the Obama administration and Congress take bold moves to reform the U.S. health system and to make federal health programs more efficient.
Among 115 “options” presented, though not endorsed, in the CBO report, several focus on raising TRICARE out-of-pocket costs for retirees and one for families. Others would tighten access to VA hospitals and clinics, or raise VA health fees, for veterans with no service-connected conditions...
http://www.fra.org/AM/template.cfm?template=/CM/ContentDisplay.cfm&ContentID=7397&section=news

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Proposed Tricare Cuts Could Cause Problems For Military Families and Retirees
January 7, 2009
It’s pretty much a given fact that the men and women serving in our country’s Armed Forces aren’t paid a whole lot. A large majority of them are living paycheck to paycheck, barely getting by. Many of our Veterans are in the same position, some even worse off, as evidenced by the numbers of homeless veterans in our country. When I read about this particular proposal to cut Tricare benefits for Military Families and Veterans I was none too happy...
http://soldiersmind.com/2009/01/07/proposed-tricare-cuts-could-cause-problems-for-military-families-and-retirees/

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From Care2 posted during the election:
Barack's Plan For Military Families
Source: my.barackobama.com
Six local military wives joined the roundtable discussion to speak about their concerns and to find out how Barack's plan to support Virginia military families will help them...
Elaine, a 46-year-old military spouse and mother of teenagers, is a breast cancer survivor – she was diagnosed two years ago and worries that if her husband retires, she will not have proper health care insurance available for her full recovery process. Her husband was enlisted and recently became a commissioned offer in U.S. Navy active duty. Obama’s plan will help Elaine’s Family by fighting for pay parity for troops, providing better support for military families during deployment. Obama has fought against cuts to Tricare, which serves active duty troops as well as retirees. Obama’s health care plan will provide affordable health care options to all Americans and will prohibit insurers from discriminating against patients for preexisting conditions...
http://www.care2.com/politics/42150

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Exerts from 'This Week' Transcript: Barack Obama
Go here for full interview: http://abcnews.go.com/ThisWeek/Economy/story?id=6618199&page=1

STEPHANOPOULOS: Let me press you on this, at the end of the day, are you really talking about over the course of your presidency some kind of a grand bargain? That you have tax reform, health care reform, entitlement reform, including Social Security and Medicare where everybody in the country is going to have to sacrifice something, accept change for the greater good?
OBAMA: Yes.
STEPHANOPOULOS: And when will that get done?
OBAMA: Well, the -- right now I'm focused on a pretty heavy lift, which is making sure that we get that reinvestment and recovery package in place. But what you describe is exactly what we're going to have to do.
What we have to do is to take a look at our structural deficit, how are we paying for government, what are we getting for it, and how do we make the system more efficient?
STEPHANOPOULOS: And eventually sacrifice from everyone.
OBAMA: Everybody is going to have to give. Everybody is going to have to have some skin in the game.

Obama's comments on Healthcare cuts during the Stephanopoulos interview:

STEPHANOPOULOS: So how do you pay for health care?
OBAMA: Well, you know, these are going to be major challenges. And we're going to have to make some tough choices. Now what I've done is indicated to my team that we've got to eliminate programs that don't work.
And I'll give you an example in the health care area. We are spending a lot of money subsidizing the insurance companies around something called Medicare Advantage, a program that gives them subsidies to accept Medicare recipients but doesn't necessarily make people on Medicare healthier.
And if we eliminate that and other programs, we can potentially save $200 billion out of the health care system that we're currently spending and take that money and use it in ways that are actually going to make people healthier and improve quality.