President Obama calls for TRICARE Fee Increases

President Obama recently released a $4.4 trillion deficit-reduction plan, and military benefits were a large part of the proposed cuts. Increases to TRICARE fees were included in the President’s plan, in addition to proposed cuts to military retirement benefits. The proposed increases in TRICARE fees include charging an enrollment fee for TRICARE for Life members, and increasing TRICARE pharmacy co-pays for military beneficiaries.

Proposed TRICARE for Life Enrollment Fees

TRICARE for Life is available to military retirees who are age 65 and older.  They currently do not pay an enrollment fee to participate in TRICARE for Life. Part of President Obama’s deficit-reduction proposal include a $200 annual enrollment fee for military retirees to continue receiving military health care benefits. If approved and voted into law, the increased TRICARE For Life enrollment fees would not begin until Fiscal year 2013. This is expected to generate over $6.7 billion in revenues over the next 10 years.

TRICARE prescription co-pay increases may be coming soon. The Department of Defense (DoD) has also proposed increased co-pays for prescription drugs to help make up for budget shortfalls and help decrease the gap between the enrollment fees and actual costs. These increases have not yet been approved, and would likely be based on a percentage of the government’s cost of the medicines.

TRICARE Prime Enrollment Fee Increases

If you are enrolled in TRICARE Prime, then you will see a small increase in your TRICARE Prime enrollment fees in 2012. Stating on October 1, 2011 (fiscal year 2012), the new annual fees for TRICARE Prime enrollment are $260 and $520 for individual and family plans, an annual increase of $30 for individuals, and $60 for families. The price increases work out to an additional $5 per month for a family enrollment, or an additional $2.50 per month for a single retiree.

These enrollment fees apply to retired uniformed servicemembers, eligible family members, survivors, and eligible former spouses of TRICARE Prime members. Members who are currently enrolled in TRICARE Prime will not have to pay the increased enrollment fees until they renew their enrollment in January 2012. These fee increases are separate from President Obama’s deficit reduction plan and the proposed TRICARE For Life enrollment fee increases.





There may be more price hikes in the future. This proposed price increase may be the first in a series or annual enrollment fee increases for TRICARE Prime members, as there has been discussion to tie the price hikes to the Medicare health care index, which will cause TRICARE Prime membership enrollment to rise as the Medicare health index rises.

Raising TRICARE Fees is a complicated issue

There are pros and cons to raising enrollment fees and prescription medicine co-pays. I see 3 distinct sides of the argument, and I have broken them down as best I can in an objective manner:

  • Raising enrollment fees hurts retirees.
  • Even with the price increases, TRICARE is an excellent deal.
  • TRICARE is unsustainable in its current state.

Let’s take a look at these three points of view in more detail, and as always, we would love to hear your opinion.

Rising TRICARE Enrollment Costs Hurts Retirees

The trouble with raising the prices of retiree health care is that most retirees are on a fixed income, and if there is a freeze on Cost of Living Adjustments (COLA), or a series of small increases in COLA, then even small increases in retiree expenses could have a dramatic affect on a retiree’s standard of living. Perhaps $5 per month won’t have a big affect on most retirees’ quality of life, but when you add that to the inflation we are seeing in other areas and fewer COLA increases, then it may have a detrimental effect.

Even with Price Hikes, TRICARE is a Great Deal

I don’t want to defend the price hikes, but I understand the need for the DoD and government to do something. The cost of health care is rising faster than most people can keep up with, and it is one of the biggest concerns in our nation – not just for military retirees, but for everyone. The new proposed family care plan under TRICARE Prime would cost $520 per year, which is less than many civilian families pay each month for family health care through an employer’s group health insurance plan. It’s a great deal, but unfortunately, the rising cost of health care means something must be done.

TRICARE is Unsustainable in its Current State.

I know many military retirees and their family members will be disappointed to hear about the price increases, but many retirees probably already realize that the rising cost of health care has placed the government in a tough position. The simple fact of the matter is this: TRICARE is unsustainable in its current state, and the DoD will have to spend an increasingly large part of its budget paying for retiree pensions and health care, while sacrificing money that could be spent on weapon systems, training, and troop retention.

The key will be for the DoD to address these TRICARE enrollment fee increases in a way that will won’t dramatically affect military retirees’ budgets. Ideally, the DoD would be able to work with the federal government to find another way to fund TRICARE without resorting to price hikes.




Do You Disagree with the Proposed Price Increases?

At the time of this writing, the TRICARE Prime price increases have been approved and are in effect. however, the proposed TRICARE For Life enrollment fees and prescription medicine co-pays are just proposals, and need to be voted into law before they go into effect. If you feel strongly that these price hikes shouldn’t be passed, then you should contact your Con­gressional representative or favorite military organization and let them know where you stand on this issue.

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Date published: October 4, 2011.

Article by

Ryan Guina is the founder and editor of this site. He is a writer, small business owner, and entrepreneur. He served over 6 years on active duty in the USAF and is currently serving in the IL Air National Guard. He also writes about money management, small business, and career topics at Cash Money Life. You can also see his profile on Google.

Comments

  1. Seems like one of many benefit cuts that the military and retirees may have to endure over the next few years. I think it is wrong to make the military pay, in any way for the reckless spending and pandering to special interests of our civilian leadership. The government owes our military and retirees the best possible care. At no cost. The men and women serving, or who have served deserve nothing less. When congressmen and women start getting paid less than $170,000 for their first year, I might start listening when they talk about the financial sacrifices required from the military. We sacrifice enough. I’ll tell you what is not sustainable, increased government spending while lowering taxes and fighting two wars. Something has to give, but the military gives enough.

  2. Although I oppose any increase what so ever, I could live with a small increase if we could pay our premiums with pre-tax dollars. Federal civil service has this benefit, as do most private plans.

    • That’s a great point, Tom. Most people who pay their employee sponsored health care can do so with pretax dollars, but many retirees and people who have an individual health care plan can’t use pre-tax dollars. There is a big tax savings there for many people.

      • As I stood in the Recruiters Office at 18 years old, I was told that if I decided to make a career in the Navy, 25 years, I would receive FREE medical for life. Where in my budget, shall I search for “We lied, it ain’t free”?
        This is the greatest country on earth, but, spin it how you will, our government lies alot and often to its military retirees. We roger up as there is no one in government to say, “This is wrong, we gave our word”.

  3. I like the idea of taking the increase now. It will happen some day, so why not now when the proposal is so modest.
    Fee adjustments should be limited to COLA increases in retirement pay.
    It would also be fair to have fees deducted from retirement pay as “pre-tax” so that we wouldn’t pay income tax on the fee amounts.

  4. Seems reasonable to me. As you pointed out in your post, there are families who pay way more than $560 monthly for health care. Not to mention, those families also pay way more than $3 for a co-pay for their meds. Under Tricare Prime Remote, active duty service members don’t pay one penny for their meds. I would be glad to pay an additional $5 monthly for the service that active duty members and their families receive.

    Too many people believe that things are an entitlement. I guess it’s our selfish nature. Maybe we all need to understand that when the government hurts, so does the individual.

    “Don’t Prevent Wealth!”

  5. HERE IS A WAY WE CAN FIX OUR GOVERNMENT AND TAKE BACK OUR COUNTRY!

    Serving in Congress is an honor, not a career.
    Our Founding Fathers envisioned citizen legislators, so ours should serve their term(s), then go home and back to work.

    TELL YOUR LEGISLATORS TO MAKE THE FOLLOWING CONTRACT WITH AMERICA!

    CONGRESSIONAL REFORM ACT OF 2011

    1. TERM LIMITS:
    6 years maximum for any individual serving as a legislator with the following two options:
    A. One six-year Senate terms
    B. Three two-year House terms

    2. NO TENURE AND NO PENSION:
    A representative or senator collects only a salary while in office and receives no
    compensation once he or she is out of office.

    3. CONGRESS MUST PARTICIPATE IN THE SOCIAL SECURITY SYSTEMS:
    All funds in the congressional retirement plans must be transferred to the
    Social Security system, immediately. All future retirement funds will flow into the
    Social Security system; thus, allowing all legislators to participate with the American
    People.
    Members of Congress can purchase their own retirement plan, just as many Americans do.

    4. COMPENSATION:
    Members of Congress will no longer be permitted to vote themselves pay raises.
    Congressional pay will adjust each term based on the lower of the following two
    Options:
    A. 3% increase
    B. Consumer Price Index (CPI).

    5. HEALTHCARE:
    Members of Congress will participate in Medicare and the same health care system as the
    American public. The current congressional health care system will be abolished.

    6. LAWS:
    Congress must equally abide by all laws they impose on the American people.Replies (82)

    • I strongly agree with Randy in all of this. I would include the strictest of oversight on Lobbyists as, well after all, there is already enough corruption in our House and Senate.

  6. yes

  7. Ed Barrett says:

    TRICARE benefits aren’t an entitlement! Free medical care for life was a promise that our government made to those of us who have 20+ years making sacrifices that civilians paying their share of their employee medical benefits never were called upon to make! If the benefits we retirees have earned are so envious why isn’t everyone knocking down the doors of recruiting offices to enlist to get them? I think we know the answer to that. The fact that we have already been paying a TRICARE fee is a break of faith by our government. Now that they have that here they come for more, all the while freezing our retired pay because they can’t manage the country’s fiscal affairs by lowering taxes, fighting for over then years in wars we should have never entered, giving tax breaks to oil companies making record profits, need I continue? Do you know of any 20 year retiree who never has to work again? Probably not, because it isn’t enough to live on which forces most of us to look for another career/job in our late 30s. The government should find another segmet of society to fund their fiscal shortfall. Military retirees have made enough sacrifices and shouldn’t have to pay more money for the benefits they were promised and they have earned!

    • Ed Wulf says:

      I agree with your points. There was one entry by Romeo earlier that stated that there are families that pay $560. per month, but I would like to say that those families probably did not have remotes, dangerous situations overseas, separation from loved ones, along with everything else that comes along with being in the military. I know that we all volunteered for that when we enlisted, but the medical benefits were very much a part of that contract. Before you start cutting the benefits of those men and women whose service ensure your freedom, look to see where you can cut back on those benefits that the President and congress gets. One final thing I don’t see benefit cuts or increases being proposed for individuals who are part of unions.

  8. Senior citizen military retirees already have to pay into Medicare Part B to access TFL. The American Military Retirees Association (AMRA) was already fighting to eliminate that Part B payemnet when this $200 hit was prposed by Mr. Obama. This administration has been insidious with forst hitting up “working age” retiress for more Tricare fees, and now over 65 retirees. You wathc, active duty is next. i am not yet in the TFL age group, but this proposal is outrageous. People on TFL are veterans of WW II, Korea and Vietnam- people in the 70s, 80s, and 90s. With DoD and the federal goverment as a whole awash in Billions in fraud, waste and abuse, it is unbelievable that the veteras of those savage wars on the 20th century are being asked to pay more, on top of alreay broken promises.

  9. As usual, those that have never served, are taking it out on those that have. Before they raise any fees on retirees, they should make all Congressmen, Senators, the President and Vice-President pay for their medical coverage! Secondly, they should remove that coverage when they leave office. Lastly, they should make these people pay Social Security, like the rest of us.

    • Randy September 30, 2011 at 11:48 am
      It has been said already. Just copy and past to all replies and in your-our- letter to our representative. Yes our retiree Org.s already do but if every one of us attack this….
      HERE IS A WAY WE CAN FIX OUR GOVERNMENT AND TAKE BACK OUR COUNTRY!

      Serving in Congress is an honor, not a career.
      Our Founding Fathers envisioned citizen legislators, so ours should serve their term(s), then go home and back to work.

      TELL YOUR LEGISLATORS TO MAKE THE FOLLOWING CONTRACT WITH AMERICA!

      CONGRESSIONAL REFORM ACT OF 2011

      1. TERM LIMITS:
      6 years maximum for any individual serving as a legislator with the following two options:
      A. One six-year Senate terms
      B. Three two-year House terms

      2. NO TENURE AND NO PENSION:
      A representative or senator collects only a salary while in office and receives no
      compensation once he or she is out of office.

      3. CONGRESS MUST PARTICIPATE IN THE SOCIAL SECURITY SYSTEMS:
      All funds in the congressional retirement plans must be transferred to the
      Social Security system, immediately. All future retirement funds will flow into the
      Social Security system; thus, allowing all legislators to participate with the American
      People.
      Members of Congress can purchase their own retirement plan, just as many Americans do.

      4. COMPENSATION:
      Members of Congress will no longer be permitted to vote themselves pay raises.
      Congressional pay will adjust each term based on the lower of the following two
      Options:
      A. 3% increase
      B. Consumer Price Index (CPI).

      5. HEALTHCARE:
      Members of Congress will participate in Medicare and the same health care system as the
      American public. The current congressional health care system will be abolished.

      6. LAWS:
      Congress must equally abide by all laws they impose on the American people.Replies (82)

  10. Frostburg says:

    Personally I deeply sympathize with older veterans who can no longer work and are struggling to make ends meet. They should not be punished with price and fee hikes because of the incompetency of congress and the rest of the govt.

    It is the govts fault we are in this financial crisis. Thanks to being at war for over 10 years among other things, us veterans are being asked to pay for the govts mistakes, and that is a travesty. Civilians really have no clue what the military members go through, not just during training stateside, but in a combat zone.

    That being said, I am personally willing to pay a little extra for Tricare Prime.

    I am a veteran of Operation Iraqi Freedom. I was wounded in combat and was medically retired. I need Tricare coverage simply because I have medical issues from my service, and no VA Hospital is close to where I live. Not to mention that I strongly feel that the quality of care that the VA offers is simply not up to snuff. They are good at coddling you and offering you free VA duffel bags, key chains, and other junk, but don’t have very much “quality” treatment for us younger vets unless you get into a serious long term treatment facility.

    I make over a grand a month in my VA disability and I am using the GI BILL while I am in college. It pays for all my tuition, books, housing, and misc fees. I am only paying for food and I don’t eat all that much. On top of it, I have no dependents. Heck, I am still in my 20s.

    If I need to pay a bit extra for my Tricare coverage, then that is something I am willing to do simply because I am reasonably financially secure right now thanks to my VA disability as well as GI BILL.

    I personally don’t feel that I served long enough to deserve all the financial benefits that are offered. I use them because I know that I will put my college degree to good use upon graduation. But I don’t really think I earned it the way many others have. I was only in the USMC for between 3-4 years. There are other veterans who are not only supporting themselves, but their wives and kids in addition to all the other expenses they may have. Many have lost limbs. I consider myself fortunate to only suffer aches and pains and a few other issues.

    Congress needs to wake the hell up. Someone has been screwing up bad for stuff like this to happen. I mean to take more money from veterans who need medical treatment for service related health issues? Plain wrong.

    I would rather that they leave my disability pay alone as that keeps me financially secure. I most likely would not be able to attend college if it was not for the GI BILL either.

    Those are the only things keeping me afloat until I can graduate and get a job to support myself.

  11. I agree that something has to be done. The economy is a mess our politicians are unable to work together as we deserve and put their beckering aside for the country. Why is it that the military retires are the first group of people that Washington want to take from. This has been an ongoing battle to keep some of what we as retired military people was promised. I really believe in this let’s stop the destruction of our people. Let’s start being fair in the way we treat our folks, if we still call ourself a democracy, a great country, and land of the free. Freedom without food, medical, or the ability to provide and take care of yourself is not freedom.

  12. When you are young the proposed Rx changes may seem modest. You may only use two to three prescriptions a year, however as you age,and can least afford it, you may find that number increases by many times that number each month. Also remember that you can’t wait a couple of weeks for antibiotics and the like to arrive by mail! You are then forced to buy at a local pharmacy at a vastly higher price. When the door opens for these so called modest changes, You can bet it will never close. “The bell tolls for you”!

  13. Tuesday, November 6, 2012 “One and Done”

    O.M.G

    Seems he likes to spread the wealth, without pointing out he is spreading the DEBT.

  14. For some strange reason, all discussions omit the fact that both retiree and A/D members’ TRICARE costs actually HAVE been rising every year. Why, because the co-pays are a PERCENTAGE of the allowable charges, which increase as the cost of healthcare increases! Thus, claims that TRICARE fees haven’t risen in years is pure rubbish. Since this is an inconvenient truth for those who wish to make the argument for increasing other fees, such as enrollment fees, and thus understandable why they would not raise this point, it’s difficult for to understand why those who claim to oppose balancing the budget on the backs of the military seem so lame-brained as to not have raised this point.

  15. I upheld my part of the contract I had with this Nation and now the Government needs to uphold it’s part.

  16. I just wonder how a polititian would feel if armed service members would lay down their arms when an enemy placed the crosshairs of a weapon on their head, and say, sorry- we were just kidding about REALLY defending YOU???

  17. Mikeal Eberhard says:

    First,we have to pay for Part B Medicare, which we can’t use if residing overseas and then the government wants to charge a $200 enrollment fee to use Tricare for Life? Also, for instance, if you are retired in Panama, Tricare is using the Puerto CMAC to determine reimbursement to providers which is so low that the are refusing to take Tricare, thereby essentially causing us to lose our insurance. Guess, what? Tricare doesn’t care, they just want it their way. Talk about “Catch 22.”

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