Reforms in Military Health Care Could Slow Rising Costs

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Although lawmakers have included some retirement reforms in this year’s defense authorization bills, they fell back into old habits by rejecting modest changes in TRICARE, the health care program that serves active and retired members of the military.

While crafting their bills, the armed services panels again stymied Pentagon attempts to curb health costs through higher co-payments, administration reforms and drug-distribution changes.

The House passed its bill last month, while the Senate is still considering its measure.

Both bills omit a proposal from a congressionally-appointed commission that deserves closer consideration. It would replace TRICARE with commercial health care plans for future reservists, many retirees, their dependents, and dependents of active-duty service members. The active-duty dependents would receive health-care allowances.

Benefits for current retirees under 65, reservists and dependents of service members and retirees would be grandfathered in. Coverage for active-duty personnel would not be changed.

The Senate bill does increase pharmaceutical co-payments. It also requires the military to assess alternative provider-payment methods that would focus on care quality rather than the number of tests and procedures.  

Proponents hope value-based payments will slow military health costs, which the Congressional Budget Office says were the fastest-growing part of the defense budget between 2000 and 2014.

External links:
Big Tricare ‘Reforms’ Rejected; Caps on Pay, Housing Allowances Raises Eyed (Military Update)
Panel Urges Overhaul of Military Benefits (Concord)
Defense Authorization Act Brings Further Debate on War Funding (Concord)
Growth in Defense Department’s Budget, 2000 — 2014 (CBO)

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