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The Honolulu Advertiser
Posted on: Monday, January 16, 2006

Defense officials defend plans to raise TRICARE fees

By Tom Philpott

Senior defense officials characterized the military health benefit as "extremely rich" during a Jan. 11 meeting with service association representatives over plans to raise retirees' TRICARE fees.

Officials requested the meeting, say attendees, to explain to the Military Coalition, an umbrella group of three dozen military and veterans' groups, why the department intends to boost TRICARE enrollment fees and deductibles for under-65 retirees and families as early as next October.

Tentative budget plans also would raise co-payments in the TRICARE retail drug network and mail-order program, which could affect all retirees, including those 65 and older, their spouses and survivors.

Dr. William Winkenwerder, assistant secretary of defense for health affairs, declined to unveil or to confirm specific fee increases planned, saying this would occur "soon," perhaps with delivery of the Bush administration's 2007 defense budget request to Congress in early February.

Asked if the planned fees match those that have appeared in draft budget documents (and have been in this news column since early December), Winkenwerder suggested that some changes are planned.

"I wouldn't want you to think that what you have seen is what's going to be done," Winkenwerder said, according to an association official who took notes during the meeting.

Winkenwerder defended the cost-saving estimates used in internal Pentagon briefings, which have persuaded military leaders to support the fee increases, said sources. Some Pentagon analysts say the cost estimates rely unreasonably on a projected shift of 600,000 under-65 retirees away from TRICARE to use employer-provided health plans.

Winkenwerder defended any cost assumptions used as reasonable and developed by experienced analysts. He also defended the goal of encouraging TRICARE beneficiaries to use alternative health insurance. His handout for attendees estimated that the number of TRICARE-eligible retirees and family members under age 65 will hover at around 3 million through at least 2011.

But the proportion of that population reliant on TRICARE is rising, from 66 percent in 2002 to 78 percent this year and to 87 percent by 2011, unless TRICARE fees and deductibles are raised, Winkenwerder said.

TRICARE never was intended to get private-sector employers off the hook for providing benefits to their own workers, he added.

Proposed TRICARE increases described in draft budget documents would set higher fees for retired officers than for enlisted personnel. Winkenwerder confirmed that he supports having people "with greater means" pay more.

Winkenwerder's handout blamed the rising costs on five factors: new, expanded military health benefits since 2000; growing reliance on an "extremely rich" benefit by under-65 retirees who previously used civilian benefits; higher usage rates by TRICARE beneficiaries versus private-sector counterparts; rapid cost growth in pharmacy programs; and inflation for health services nationwide.