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The Honolulu Advertiser
Posted on: Monday, March 20, 2006

Delay in insurance hike sought

By Tom Philpott

Influential lawmakers are moving to block for at least a year the Defense Department's plan to raise Tricare health insurance fees, co-payments and deductibles for military retirees under age 65 and their family members.

Rep. John McHugh, R-N.Y., chairman of the House armed services subcommittee on military personnel, and his Senate counterpart, Lindsey Graham, R-S.C., want an impartial group of analysts to review the numbers behind the Bush administration's rationale for raising Tricare fees dramatically for 3 million beneficiaries.

Both subcommittee chairmen said separately that they doubted the independent review — likely to be conducted by the General Accountability Office — will be completed in time for Congress to feel comfortable allowing any Tricare fee increases this year.

Leaders of the House Armed Services Committee, said McHugh, are most concerned about the size of the planned increases. They also are troubled by the lack of confidence among Defense Department officials in their own cost-saving projections.

In the Senate, Graham said someone figured that the average fee increases for under-65 retirees would be 115 percent.

"There is no way we're going to have 115 percent fee increases over the next few years. Period," Graham said.

Defense officials had hoped to begin phasing in the higher rates as early as this October. Enrollment fees for Tricare Prime, the military's managed care program, would triple for retired officers, double for senior enlisted and rise by 41 percent for retired enlisted in grades E-6 and below.

Deductibles for Tricare Standard, the traditional fee-for-service option, also would rise sharply for under-65 retirees. That group's Standard users also would pay an annual enrollment fee for the first time. Tricare retail pharmacy co-payments too would increase under the plan.

Events on Capitol Hill in mid-March, however, turned sharply in favor of the military associations and tens of thousands of retirees who began fighting the fee increases when they were first unveiled in early February as part of the administration's fiscal 2007 defense budget request. Opponents have been sending members of Congress e-mails and letters, and have been making phone calls.

Graham and Nelson signaled that fees will have to be raised eventually, but they won't be as large or as sudden as the Defense Department has planned.

"Erosion of benefits is coming," said Graham. "The question is will they come in a way that people afford, and will have a soft landing, or will we have a hard landing?"

Higher fees also won't be imposed until the department has taken more aggressive steps to curb medical costs without impacting beneficiaries, the two senators said. Graham referred to recommendations by service groups for savings, including 16 offered by retired Navy Vice Adm. Norbert Ryan, president of the Military Officers Association of America.

"I want to wring that dry," said Graham, "and then we move over to the idea of the increases, if they're necessary at all."