The House Armed Services Committee is poised to do the Pentagon’s bidding and Committee chairman Buck McKeon, R-Calif., will propose Wednesday that Medicare-eligible military retirees be barred from enrolling in the U.S. Family Health Plan beginning Oct. 1, 2012. This move, requested by the Defense Department, would leave the Tricare insurance option open for active-duty families and for working-age retirees and their families, but prevent new patients from enrolling once they reach age 65. Medicare-eligible retirees already in the plan would not be forced to drop coverage.
While McKeon’s committee is expected to approve the Pentagon proposal, it is not clear what might happen when the Senate Armed Services Committee takes up the defense authorization bill in June, because a Republican committee member in that chamber is strongly opposed.
“The fact that we’re going from the highest-rated health care plan in the military system to something that could be dramatically worse — it concerns me,” said Sen. Scott Brown, R-Mass., whose state is covered by one of the six U.S. Family Health Plan programs.
More than 100,000 people are enrolled in the U.S. Family Health Plan, which is made up of six networks based in the Northeastern U.S., the mid-Atlantic region, the Puget Sound area of Washington state, southeastern Texas and southwestern Louisiana. Eligibility is based on where veterans live.
There is no question about the quality of medical treatment in the networks. In fact, U.S. Family Health has one of the highest patient satisfaction rates of in the U.S., with 91 percent approval. For defense officials, the issue is one of both equity and savings.
Robert Hale, the Defense Department comptroller, said May 4 that current law requires Medicare-eligible military retirees to enroll in Medicare Part B to receive military health care benefits after age 65, but retirees enrolled in the U.S. Family Health Plan are exempt.
“They are the only retirees using the military health benefits who do not have to enroll in Medicare when they become age-eligible,” Hale said at a hearing of the Senate Armed Services Committee’s personnel panel.
Not only is this a good deal for retirees who can avoid the Medicare Part B premium — $96.40 a month for most — but doctors in the U.S. Family Health Plan also are paid at rates that exceed Medicare limits for treatment, Hale said. “We seek legislation that would permit us to reimburse those plans in the same manner as we do for most other hospitals serving military beneficiaries,” Hale said.
Stopping new enrollments in a year, but allowing those already enrolled to keep their U.S. Family Health Plan coverage, means the changes would be “very gradual” for doctors in the plan and would fully grandfather retirees already 65 or older, Hale said.
Defense officials are calling this “aging out,” rather than phasing out, Medicare-eligible retirees.
This change would save the Defense Department a lot of money, in part because the military puts money away now to pay for future health costs of retirees. Ending enrollment for older retirees into the U.S. Family Health Plan accounts for $3.2 billion of the $7.9 billion in health care savings over 10 years proposed by the Defense Department from its overhaul of the health care system.
Savings would begin in fiscal 2013, with a $739 million reduction in military health care costs, according to information provided to the Senate subcommittee by Dr. Jonathan Woodson, assistant defense secretary for health affairs.
However, ending enrollment for a popular health program has drawn complaints from people like Brown, who accuses the Defense Department of forcing retirees to abandon a good health plan and look for new doctors just as they reach old age.
“The proposed legislation, if enacted, would basically force future retired members of the military to disenroll from the program that apparently is the highest-rated health care plan in the military health system, into, quite frankly, a plan that is not as high rated,” Brown said.
In response, Woodson reiterated that the goal is to bring costs down. On average, the Defense Department is paying $19,000 a year in health costs for a Medicare-eligible retiree in the U.S. Family Health Plan, compared to $4,500 a year for other Medicare-eligible retirees. The difference results because under Tricare for Life, Tricare is second payer to Medicare, and doctors would be reimbursed at Medicare rates, he said.
“We need to change our business model to remain solvent and keep the benefit of health insurance solvent for the future,” Woodson said. “We cannot afford to pay these excessive amounts.”
Hale echoed those sentiments. “We believe that it is not appropriate to treat individuals differently just because they join a particular plan, nor is it appropriate to provide a few hospitals with special subsidies,” he said.
The Government giveth and the Government taketh away. Blessed be the name of the Government.
(Source: Army Times)