Panel warns Tricare in 'death spiral'

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Bob Daigle, chairman of the Military Compensation and Retirement Modernization Commission, speaks at a Jan. 29, 2015 press conference in Arlington, Va. Commission members, speaking before a House Armed Services subcommittee on Wednesday, Feb. 11, 2015, said they viewed Tricare as being in a "death spiral." C.J. LIN/STARS AND STRIPES
From Stripes.com
Bob Daigle, chairman of the Military Compensation and Retirement Modernization Commission, speaks at a Jan. 29, 2015 press conference in Arlington, Va. Commission members, speaking before a House Armed Services subcommittee on Wednesday, Feb. 11, 2015, said they viewed Tricare as being in a "death spiral." C.J. LIN/STARS AND STRIPES

Panel warns Tricare in 'death spiral'

by: Travis J. Tritten | .
Stars and Stripes | .
published: February 12, 2015

WASHINGTON — The military’s Tricare health insurance is a broken system that is now in a “death spiral” and must be replaced, a congressional review commission told the House on Wednesday.

The insurance has been veering toward less choice and access since it was created and now falls far behind other networks in its number of providers and ability to incorporate new types of medical care, members of the Military Retirement and Compensation Modernization Commission testified before an Armed Services subcommittee.

The testimony is the beginning of hearings on Capitol Hill so lawmakers can consider legislation to overhaul the health coverage, troop retirement system and other compensation that the Pentagon says is growing too expensive to sustain. The Senate has also planned a series of subcommittee hearings to weigh a number of the commission recommendations, including a complete restructuring of 20-year military retirement system.

Commission member Stephen Buyer warned House lawmakers that the Pentagon and contractors will likely try to persuade them the Tricare system is not in trouble and they should not believe the claims.

“Tricare is a broken system … do not get sucked into the status quo,” Buyer said.

He said the essential problem with the military’s system is that it has driven down costs by reducing its reimbursements to health care providers below that paid to Medicare, the government subsidized insurance system that functions as a measuring stick for the industry.

The low payments have driven doctors and providers out of the system, said Buyer, himself a former Congressman from Indiana. For example, the Blue Cross/Blue Shield insurance network has 114 OB-Gyn providers in Fayetteville, N.C., where Fort Bragg is located, but Tricare only has 36.

“Go talk to them,” Buyer said. “It is a reimbursement issue that these providers are not signing onto Tricare.”

Furthermore, the system is very slow to cover new and emerging procedures for military patients because updates are done rarely on a cyclical schedule, said commission member Peter Chiarelli, a retired general.

“You are receiving medical care that is eight years in arrears,” Chiarelli said.

Such problems have continued to worsen since the inception of the Tricare program and as the military continually seeks to save money, said commission member Edmund Giambastiani, a retired admiral.

“I think our commission believes Tricare is in a death spiral,” he said.

The commission is proposing replacing the health insurance with a wider selection of private plans for troops and their families, similar to what is offered to civilian employees. It would result in about a $5 increase per year for a policy that costs $535, and would save the military about $6-7 billion per year.

Rep. Jackie Speier, D-Calif., said the increased coverage costs would roughly equal the cost of a Starbuck’s latte each year and create more choice of doctors and improve access to care.

The realm of military personnel costs, especially health insurance, is one of the best areas to cut, Speier said.

“We’ve just got to inject a little guts into each of us to do the right thing,” she said.

tritten.travis@stripes.com
Twitter: @Travis_Tritten

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