FY 2018 Defense Budget Request has TRICARE Fee Increases

FY 2018 Defense Budget Request has TRICARE Fee Increases
The President’s budget request includes $639 billion for discretionary spending authority for the Department of Defense (DoD), which is a $52 billion increase above FY 2017 DoD budget. Most of the increases go to modernization and force readiness.

The proposed budget would increase some health care fees. During the previous year, Congress passed substantial TRICARE Reform that merged TRICARE Standard/Extra into TRICARE Select. Among the changes, service members entering the military after January 1, 2018, would have to pay higher out-of-pocket costs for health care. But current service members and retirees were grandfathered into the new TRICARE program without any cost increase. These changes are supposed to go into effect January 1, 2018. The DoD request proposes new TRICARE changes that will lead to higher out-of-pocket costs, including:

  • Elimination of the grandfathering provision, directly causing higher out-of-pocket ¬† costs for all working age retirees;
  • Premiums, co-pays, deductibles and catastrophic caps for beneficiaries younger than age 65 would dramatically increase annually, based on increases in health care costs measured by the growth in National Health Expenditures;
  • Increasing co-pays, deductibles and the catastrophic cap for currently covered TRICARE Standard/Select families;
  • Increasing pharmacy co-pays for retirees younger than age 65, including a new co-pay for mail-order generics that are currently available with no out-of-pocket cost; and
  • Allowing larger annual increases to TRICARE out-of-pocket fees that would impact all working age retirees and currently covered TRICARE Standard/Select families. Their participation fees, deductibles, co-pays and catastrophic cap would have higher annual increases.

The budget also calls for a smaller than expected pay raise for active duty (2.1%) even though the current statute calls for an increase equal to civilian pay increases (2.4%). The budget request does nothing to change scheduled reductions to Base Allowance for Housing reimbursements. The budget request asks for another Base Realignment and Closures (BRAC) commission. The commission is empowered to make a list of bases to close and gives the House and Senate an up or down vote only.

In addition, the U.S. Coast Guard budget (part of the Department of Homeland Security) does not provide the same increase as the Navy and Marine Corps budget request. FRA appreciates the administration’s effort to increase spending for the DoD, but will emphasize the USCG plays a critical role in national defense. The Coast Guard needs the same percentage funding increase as the other Sea Services Adequate funding for the Coast Guard is essential to morale, family readiness and service-wide Coast Guard readiness.¬†Members are urged to use the FRA Action Center on our website to ask their legislators to oppose these TRICARE fee increases and to urge them to provide adequate funding for the Coast Guard.

Disclaimer: The opinions expressed within this article are the views of the writer and do not necessarily reflect the views and opinions of FRA.

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