What Does The Department Of Defense Budget Have To Do With Military Health System Reform?

Please note: As you read on about DoD’s health care budget, it is important to remember the DoD budget is just a proposal. These changes will not become law unless passed by Congress.

The Department of Defense (DoD) recently released the Fiscal Year 17 (FY17) budget proposal including their plans for the Military Health System (MHS.) This is the first MHS reform proposal to be released since Congress stated MHS reform is a top priority. Given the widespread and clearly-stated interest in Congress for MHS reform, our Association had hoped the DoD budget proposal would outline plans to improve access, quality, safety, and the patient experience. Instead, DoD has once again rebranded the same old system, incorporated numerous fee increases, and deemed it new and improved.

DoD’s proposal renames TRICARE Prime to TRICARE Select. Our current TRICARE Standard offering becomes TRICARE Choice. Other than new names the budget proposes few changes to the military health care benefit, but fee increases? Oh, yes, we have fee increases...

Plenty of fee increases . . .

Active Duty Families (including Medically Retired and Survivors)

While we are pleased TRICARE Select maintains a no/low cost option for active duty families, medically retired and survivors, we do have some concerns regarding the proposed fee increases:

  • Active duty families will see higher out-of-pocket costs for non-network care. Even TRICARE Prime/Select families – who currently face no out-of-pocket costs for care if they follow TRICARE’s referral/authorization policies – will pay for non-network care. For TRICARE Standard/Choice families, the out-of-network deductible is doubled to $600 annually. Given use of non-network providers is largely driven by inadequate network coverage, we believe it is inappropriate to increase these costs to families.
  • The catastrophic cap will increase to $1,500. We know many families make the switch to TRICARE Standard after encountering difficulties with the direct care system or the referral/authorization process. We fear raising the catastrophic cap 50% will trap some military families in an underperforming direct care system and present a financial barrier to switching to TRICARE Standard/Choice.

We are also concerned all of these fee increases will disproportionately impact special needs families and those dealing with behavioral health challenges.

Working-Age Retirees

Under the FY17 DoD proposal, retirees face fee increases in almost every area.

  • TRICARE Prime/Select participation fees will increase and the plan proposes a new participation fee for TRICARE Standard/Choice beneficiaries.

  • The annual catastrophic cap for retiree families would be increased to $4,000. Furthermore, participation fees would no longer count toward the catastrophic cap, increasing potential total out-of-pocket costs.

  • Of course, retiree families would also be subject to the doubled out-of-network deductible.

TRICARE Standard/Choice families are hit particularly hard. TRICARE Standard Retiree families who hit the catastrophic cap (primarily special needs families and those facing chronic conditions, including behavioral health challenges) face a 63% increase in potential out-of-pocket costs due to the new participation fee and higher catastrophic cap. These fee increases are particularly objectionable as they are not accompanied by any improvement in the Standard/Choice option.

But, where’s the reform?

Over the last few years, we’ve made a lot of noise about military health care problems - thanks in large part to the feedback and stories you’ve shared with us! We appreciate DoD has listened to our concerns and are gratified the FY17 budget acknowledges the Department must fix problem areas including:

  • Direct Care access problems

  • Lack of first call resolution

  • Cumbersome referral process resulting in administrative burdens and delayed access to care

  • Lack of seamless mobility for beneficiaries who move around the globe

  • Failure to properly address pediatric care issues

However, acknowledging problems is not the same as fixing problems. We are disappointed the DoD budget falls short of committing to detailed plans and metrics for measuring progress.

We are also concerned the new fee structure is designed to drive more care into Military Treatment Facilities (MTF), but there are no additional resources identified in the budget proposal to increase MTF capacity. We fear this scenario will lead to even greater access and quality problems.

In our testimony, NMFA has urged Congress to reject not only the specifics contained in the FY17 budget proposal, but also DoD’s approach to MHS reform. Our Association rejects the notion military health care reform starts with the question: “How much should military families pay for their health care?” We believe the starting point for reform is a demonstrated ability to better meet beneficiary needs, together with a plan for continuous improvement and modernization of the health care benefit. Discussions about the appropriate level of out-of-pocket costs should follow, and those discussions should always be grounded in the principles of low/no cost health care for active duty families and retiree costs that reflect the extraordinary sacrifices associated with career military service and preserve the value of the retirement package.

What do you think about the Department’s health care proposal? Please share your thoughts with us!

Posted March 18, 2016


From: William on: January 16, 2017
There seems to be growing pressure on Military Treatment Facilities (MTF) to deny care for family members. We've been seeking care for my daughter and the MTF continues to deny or delay appointments citing that active-duty are the priority. While that may be accurate and true, my daughter still needs care! I'm desperate to find answers with no one really willing to help.
From: Jolene on: April 10, 2016
Doctors and other professionals are required by Tricare to provide a diagnoses in order to receive payment! Thus, patients are getting flung into the EFMP process with a diagnoses unknowingly, rather than just to have the provider ask for payment from the military member directly. Then, EFMP employs more people for that process that simply stresses out the family members as well as the military member. Rather than being able to have the front desk employees set up appointments, a whole other group of employees are hired just to set up appointments! Rather than the nurses on duty answer and return calls, a whole other service is provided just for the task of answering those calls. Most patients are told to go to the emergency room by Tricare - rather than be able to get an appointment with a doctor. It's encouraged by Tricare. If anything should be examined I. The medical system, it should be Tricare company practices, and correct division of labor!
From: Debra on: March 19, 2016
Someone needs to tell elected members of Congress (who make plenty of money) that there are military families that are not making enough money to put food on the table MUCH LESS afford increased fees for healthcare. Then there are the retirees on very fixed incomes. It seems Congress cannot fathom the daily financial challenges of those people depending on their doing just that. I am not directly affected by this proposed set of changes, but know many who would face insurmountable obstacles if these changes are passed. Who's running the show? Pharmaceutical & insurance companies? I say vote current members OUT of Congress. New blood, without obligations to corporations is needed, NOW.
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