House Armed Services Committee Report Acknowledges “important role” of US Family Health Plans

A powerful congressional committee has formally recognized the contributions that the US Family Health Plans (“USFHP”) have made to the health of military families.

In a report accompanying the House version of the National Defense Authorization Act for Fiscal Year 2015, the House Armed Services Committee acknowledged the USFHP’s high quality of health care and customer satisfaction.

The congressional committee went one step further and encouraged the Military Compensation and Retirement Modernization Commission to consider the US Family Health Plans as the commission formulates its recommendations about how best to shape the future military health benefit.

“On behalf of the US Family Health Plan Alliance and its member plans, we are extremely gratified that the House Armed Services Committee has formally recognized the value of the US Family Health Plan program to the beneficiaries and the Military Health System,” said David Howes, President and Chief Executive Officer of Martin’s Point Health Care.  “We are equally pleased that the Committee has encouraged the Military Compensation and Retirement Modernization Commission to evaluate the US Family Health Plan program as it deliberates about the best way to improve the Military Health System,” said Howes.

The Military Compensation and Retirement Modernization Commission was established by Congress in the Fiscal Year 2013 National Defense Authorization Act. Its mission is to review military pay and benefits, and recommend how to modernize the systems so that the United States can maintain a strong, all-volunteer force, in both peacetime and wartime, and the systems are fiscally sustainable. The commission has been soliciting information from military members, retirees and others. It will submit its recommendations to the President next year.

In the House Armed Services Committee report on the National Defense Authorization Act for Fiscal Year 2015 (H.R. 4435), the committee wrote:

“The committee is aware of the important role of the US Family Health Plans in providing quality health care, which consistently exceeds customer satisfaction expectations, to military beneficiaries. The committee notes that the Department of Defense strives to provide quality health care to its beneficiary population, which has grown significantly over the last decade. Given the budget challenges the Department is facing, it is important that all segments of the military health system make every effort to ensure that they are providing the most cost-effective quality services available. The committee recognizes the contributions provided by the US Family Health Plans to the health of service members and their families, particularly retirees. Therefore, the committee encourages the Military Compensation and Retirement Modernization Commission to address the role of the US Family Health Plan during deliberations regarding the future military health benefit.”

The US Family Health Plans provide high quality, managed care that utilizes the patient-centered medical home model. The plans place a strong focus on wellness and prevention, and also offer a full-range of specialty care. US Family Health Plans’ patient satisfaction rates are the highest in TRICARE, and patient satisfaction rates are far higher than the national average of commercial plans. In 2013, the plans achieved an overall patient satisfaction rating of 92.5 percent.

Frequently Asked Questions Regarding Proposed Changes to TRICARE In the Budget Request for Fiscal Year 2015

Please click on a question below to display the answer.  Please click here to read the statement from US Family Health Plan Alliance Chief Executive Officer Henry J. “Jim” Schweiter, and David Howes, President and Chief Executive Officer of Martin’s Point Health Care and chairman of the Alliance Board of Directors, regarding the recently released fiscal year 2015 defense budget request, as it relates to military health care.

What are the changes to TRICARE being proposed to Congress by the Department of Defense (DoD)?

DoD is proposing to consolidate the various TRICARE options—TRICARE Prime, Extra, Standard, and other TRICARE Plans—into one consolidated plan, and to increase several beneficiary costs. Key changes would include:

  • Increased Cost Shares: Cost shares will depend on beneficiary category (excluding active duty) and care setting. Cost shares would be the lowest in MTFs, higher in the network, and highest out of network.
  • Increased Participation Fee (i.e., Enrollment Fee): Retirees (not medically retired), their families, and survivors of retirees (except survivors of those who died on active duty) would pay an increased annual participation fee or forfeit coverage for the plan year.
  • Open Season Enrollment: Participants proposed consolidated plan would be required to enroll for a 1-year period of coverage or lose the opportunity for TRICARE coverage.
  • Elimination of Referrals: Beneficiaries would no longer need to obtain authorizations when seeking civilian care; but costs to the beneficiary would be determined by the network status of the provider(s) they see.
  • Deductibles: The proposed combined TRICARE plan would feature deductibles that would need to be met by the beneficiary before cost-sharing takes effect. Currently, TRICARE Standard and TRICARE Extra feature deductibles, but TRICARE Prime and US Family Health Plan do not.
  • Catastrophic Cap:  The Catastrophic Cap, which is the annual, per-family limit on out-of-pocket expenses, would increase slightly from the current amount. However, the participation/enrollment fee would no longer count towards the cap.
  • Increase co-pays for pharmaceuticals: The proposed changes to beneficiaries’ pharmacy costs would be phased-in over a 10-year period, with some costs more than doubling over that period of time.

Have these proposed changes been made law?

No. Congress would first need to approve these proposed changes before they could take effect.

Is Congress likely to go along with DoD’s proposed changes?

No one has a crystal ball, but conventional wisdom suggests that it is unlikely Congress would adopt these changes during an election year. Nevertheless, you may wish to contact your elected representatives to understand their position on the proposal and to convey any concerns you may have.

Why is DoD proposing to consolidate the existing TRICARE plans into one plan?

DoD has stated that consolidating the existing plans would simplify TRICARE and save money.  However, we believe that beneficiaries should have a choice and should be able to select a plan that best meets their individual needs, rather than a one-size-fits-all plan.

How would these proposed changes affect US Family Health Plan?

At this point it is unclear how these proposed changes—if enacted—might affect US Family Health Plan, as very few specifics have been provided.  The US Family Health Plan was created in 1993 by congressional statute, and was moved under the TRICARE umbrella in 1997.

Why is DoD proposing to increase costs for TRICARE beneficiaries?

We believe the DoD is trying to reduce their cost to provide the TRICARE benefit.  However, we believe that these costs should not simply be shifted on to beneficiaries.  Furthermore, by eliminating the requirement for coordination of referrals to specialists by a primary care provider, the proposed consolidated plan would have beneficiaries navigating the health system on their own, and would likely lead to a lack of coordination of services among providers and higher health care costs in the long run.

Are these changes being proposed because of the Affordable Care Act (“Obamacare”)?

No. TRICARE is governed by a separate set of statutes, and is not directly affected by the Affordable Care Act.

What are the proposed changes to the enrollment fees?

The proposal specifies an enrollment fee increase for January 1, 2016. The enrollment fee would increase each year after that tied to that year’s cost of living increase:

Currently, TRICARE beneficiaries enrolled in Part B pay no enrollment fee. The Administration’s proposal would implement an enrollment fee for these beneficiaries beginning in fiscal year 2015. This fee would be a percentage of the sponsor’s retirement pay:

What are the proposed changes to beneficiary outpatient cost-shares in the FY2015 budget request?

These proposed outpatient cost-shares would take effect January 1, 2016:

What are the proposed changes to beneficiary inpatient cost-shares in the FY2015 budget request?

These proposed inpatient cost-shares would take effect January 1, 2016:

What are the proposed changes to pharmacy co-pays in the FY2015 budget request?

The following proposed pharmacy changes in the FY 2015 budget would take effect January 1, 2015 and be phased-in over a 10-year period:

What are the proposed deductibles?

The following proposed deductibles would take effect January 1, 2016:

General Deductible (out-of-network care)

  • E1-E4 active duty family – $150 individual/$300 family
  • E5 and others – $300 individual/$600 family

What are the proposed changes to the catastrophic cap?

The catastrophic cap is the maximum a family would pay out-of-pocket in a given year. The current catastrophic cap is $1,000 per year, per family for active duty families, and $3,000 per year, per family for retirees and their families.  Currently, all out-of-pocket costs are applied to the catastrophic cap, including the enrollment fee.  The Administration proposal would increase slightly the catastrophic cap as of January 1, 2016; however, the enrollment fee would no longer be applied to the catastrophic cap.

Catastrophic Cap (per fiscal year) – Active Duty Family

  • $1,500 network/$2,500 combined
  • $3,000 networks/$5,000 combined