TRICARE Young Adult Premiums Are Rising Again: What Military Families Should Know

Military families with young adult dependents who are enrolled in, or planning to enroll in, TRICARE Young Adult (TYA) should prepare for another premium increase in 2027, and this one is a doozy. It’s the latest in a series of increases that have made coverage increasingly expensive, particularly for families choosing TYA Prime.

According to the Defense Health Agency’s (DHA) TRICARE Operations Manual, monthly premiums for 2027 will increase to $893 for TYA Prime and $394 for TYA Select. That’s an increase of $99 per month for Prime and $31 per month for Select compared to 2026.

For families paying for TYA Prime, the new rate means an annual premium cost of $10,716, an increase of $1,188 over 2026.

NMFA identified the new rates in the TRICARE Operations Manual incidentally, as they’ve not been made available through beneficiary-facing communications just yet. Under the program’s notification requirements, the government provides updated premium rates to TRICARE contractors, Humana Military and TriWest, at least 60 calendar days before they take effect. Contractors must then notify enrollees in writing of premium changes at least 30 calendar days before the effective date.

NMFA is concerned about what these rising costs mean for military families, particularly those relying on TYA to maintain health coverage for their adult children.

But beyond the sticker shock, there are important questions about how premiums are calculated, what’s driving the rising costs, and why TYA Prime has become significantly more expensive than TYA Select.

What Is TRICARE Young Adult?

TRICARE Young Adult is a premium-based healthcare program that allows eligible adult children of TRICARE sponsors to purchase coverage after they lose regular TRICARE eligibility, generally at age 21, or age 23 if enrolled in college and meeting eligibility requirements.

TYA provides coverage until age 26, as long as the young adult remains eligible. To qualify, young adult dependents must generally be unmarried, not eligible for employer-sponsored health coverage based on their own employment and meet other program requirements.

Depending on eligibility and location, beneficiaries can choose between two options:

• TYA Prime generally requires enrollment with an assigned primary care manager and follows Prime’s referral and network rules.

• TYA Select offers greater flexibility in choosing TRICARE-authorized providers, although out-of-pocket costs and other coverage requirements differ.

Unlike regular TRICARE coverage for eligible dependent children, TYA requires families or young adults to pay monthly premiums to maintain coverage.

How Much Have Premiums Increased?

When TYA launched in 2011, monthly premiums were $213 for Prime and $186 for Standard, the predecessor to Select. At the time, the difference between the two options was just $27 per month.

But beginning January 1, 2027, that gap will reach $499 per month, or nearly $6,000 annually.

While both options have increased, TYA Prime premiums have grown substantially faster, widening the disparity between the two plans.

To put that into perspective, TYA Prime cost $2,556 annually in 2011. In 2027, that same coverage will cost $10,716 annually. That’s an increase of $8,160, or approximately 319% since the program launched.

And the increases have accelerated significantly in recent years.

In 2021, TYA Prime premiums were $459 per month. Come January 1, 2027, they’ll reach $893. That means TYA Prime premiums will have increased nearly 95% in just six years.

TYA Select premiums have also increased, but at a considerably slower pace. From $186 per month in 2011 to $394 in 2027, Select premiums have increased about 112%.

Of course, TYA Select beneficiaries may face higher out-of-pocket costs when accessing care. But the difference in cost-sharing alone doesn’t explain why Prime premiums have increased so much more dramatically.

For military families comparing coverage options, the growing difference raises important questions: Why are TYA Prime premiums rising so significantly, and what’s driving the growing cost difference between the two coverage options?

How Are TYA Premiums Determined?

Unlike many other TRICARE coverage options, TYA is required by federal law to operate on a full-cost premium basis. Under Title 10, United States Code, Section 1110b, premiums must be established annually that are equal to the cost of providing coverage through the TYA program.

In response to NMFA’s inquiry about the 2027 increases, DHA confirmed the 2027 rates found in the TRICARE Operations Manual and explained that separate premiums are established for TYA Prime and Select under federal regulations. DHA also stated that premiums are adjusted annually based on TYA enrollee healthcare utilization during preceding years.

Essentially, premiums are tied to the cost of providing coverage to the enrolled population within each plan, rather than an individual beneficiary’s healthcare needs or expenses. Those costs are what help determine the monthly premium charged to beneficiaries.

However, DHA’s explanation did leave some important questions unanswered.

For example, what specific changes in healthcare utilization or costs have contributed to the increases? How much of the growth is attributable to medical expenses, enrollment patterns, or other factors? And why have those costs increased so much more dramatically for TYA Prime than TYA Select?

These are important distinctions for families trying to understand why their premiums continue to rise exponentially each year.

NMFA Is Asking for More Information

NMFA initially reached out to DHA to confirm the 2027 premium rates and to request additional information on how premiums are calculated, particularly the factors contributing to the substantial increases in TYA Prime.

DHA confirmed that the published rates are correct and explained the federal requirements governing premium calculations.

While their initial response clarifies DHA’s “legal obligation,” it doesn’t fully explain the underlying factors driving the increases.

NMFA has requested additional information, including:

• Historical healthcare utilization data.

• Details about the methodology used to calculate premiums.

• An explanation of the widening cost difference between TYA Prime and Select.

As of the publication of this article, NMFA has not yet received a response addressing those additional questions.

We recognize that DHA is required to follow federal law when establishing TYA premiums. Our questions are intended to help military families understand the calculations behind those costs and the factors contributing to the increases.

Families facing higher premiums deserve a clear explanation of what’s driving them.

NMFA will continue seeking information from DHA and share additional findings as they become available.

What Should Military Families Consider Before 2027?

For families currently enrolled in TYA, or considering enrollment, the upcoming premium changes may warrant a closer look at their healthcare coverage options.

TYA Prime and Select offer different approaches to accessing care, but the substantial difference in monthly premiums makes Select the more affordable option for most beneficiaries, even when accounting for additional out-of-pocket healthcare costs. However, families should still be sure to compare coverage options based on their young adult’s healthcare needs, preferred providers, expected out-of-pocket expenses, and eligibility for other coverage options before making changes.

Young adults may also want to compare TYA with a parent’s employer-sponsored insurance, Marketplace plans, or other coverage for which they may qualify.

While these alternatives may carry similar monthly premiums, employer contributions or income-based Marketplace subsidies can sometimes reduce what beneficiaries pay out of pocket. Eligibility for those savings varies, so comparing total costs is important.

Before canceling or switching plans, families should also understand enrollment requirements and coverage effective dates to avoid unintended gaps in coverage.

Why NMFA Continues to Push for Coverage Parity

The rising cost of TYA also underscores a longstanding concern for NMFA: military-connected young adults don’t have the same access to parental health coverage as many of their civilian counterparts.

Under the Affordable Care Act, young adults can generally remain on a parent’s health insurance plan until age 26 without purchasing a separate, full-cost coverage plan.

Military families, however, typically lose regular TRICARE dependent coverage when their children turn 21, or 23 if they qualify as full-time students. Unlike their civilian counterparts, young adult dependents have to purchase TYA to remain tied to their parent’s health coverage.

That’s why NMFA continues to support legislation such as the Health Care Fairness for Military Families Act, which would extend regular TRICARE dependent eligibility to age 26.

Military-connected young adults shouldn’t face an additional financial burden simply because their parent served. NMFA believes they should have access to the same age-based dependent coverage protections available to civilian families.

Military Families Deserve Answers

TRICARE Young Adult was created to extend health coverage to eligible young adults during a period when maintaining insurance can be challenging. But with Prime premiums exceeding $10,000 annually in 2027, affordability is becoming an increasingly important consideration for military families.

NMFA understands that federal law determines how TYA premiums must be established. Still, understanding the legal requirement is only part of the picture. Families also need to understand why the cost of providing that coverage has increased so significantly and what the numbers mean for their healthcare decisions.

NMFA will continue to ask those questions and advocate for policies that ensure military families have access to affordable, quality healthcare. We also invite you to tell us your story or send your lawmakers a letter through our Military Family Action Center.

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