Getting out, military health issues - Marine Corps Times

Reservists overcharged for Tricare, GAO says

National Guard and reserve members pay Tricare premiums that are 72 percent too high for single coverage and 45 percent too high for family coverage, the Government Accountability Office says in a new report to Congress.

And that has two major military groups demanding steep cuts in Tricare Reserve Select fees — and even refunds.

The GAO, the investigative arm of Congress, made that judgment by looking at the Pentagon’s costs for providing health care under the TRS program, which have been far less than projected.

Monthly TRS premiums are $81 for single coverage and $253 for families — fees that the Defense Department based on how much the federal government charges civilian workers in the Blue Cross and Blue Shield standard plans.

“We were very concerned, when the Pentagon announced its plan for setting fees, that they were going to be too high, but we never imagined it would be this much,” said retired Air Force Col. Steve Strobridge, director of government relations for the Military Officers Association of America. “This warrants a rollback in fees. This warrants refunds for people who have paid ... far too much.”

The Reserve Officers Association also wants fees cut, said retired Navy Reserve Capt. Marshall Hanson, that group’s legislative director.

“It is obvious from the GAO report that reservists have been paying more than 28 percent of the cost, as directed by Congress,” he said. “Premiums should be reduced, and past overpayments should be credited.”

Explaining skewed estimates

The GAO says the Pentagon is charging too much because its cost estimates for providing benefits were “about 11 times higher than its reported costs.”

Auditors cite two reasons why premiums are out of whack.

First, defense officials expected 114,000 reservists to enroll in TRS, but only 11,500 had done so by 2007, the report says. Sign-ups have increased since changes in coverage took effect Oct. 1, but auditors said defense officials still appear to be overshooting on their enrollment projections.

Second, defense officials based TRS premiums on fees charged to federal workers enrolled in Blue Cross and Blue Shield standard health plans after making small adjustments for differences in age, gender and family size for Guard and reserve families.

The reserve population is generally younger, has a higher percentage of males and has more dependents per sponsor. Overall, the Pentagon concluded that costs should be set slightly lower for reservists than for federal workers. But even with that adjustment, fees are still too high, the GAO says.

One intent of the report is to quash a move by the Defense Department to seek an increase of at least 8 percent in TRS premiums to keep pace with premium increases in the private sector. After the Defense Department made one 8 percent premium increase in 2006, Congress froze all Tricare premiums, deductibles and co-payments — not only for TRS, but for the Tricare Standard and Prime options used by military retirees and their families.

Defense officials told the GAO that they plan to continue making annual TRS adjustments based on the Blue Cross and Blue Shield expenses because they don’t have a better way to predict future costs, the report says.

Dr. S. Ward Casscells, assistant defense secretary for health affairs, said in a written response to the report that the current method of setting premiums does not accurately reflect the military’s costs and that he hopes a better method will be found when enough data is available about use of health benefits by reservists and their families.

However, Casscells blamed the inability to predict costs on Congress, which made changes in the TRS program in three consecutive years, slowing “the data maturation process.”

Still, he said, the Pentagon “remains committed to improving the accuracy of TRS premium projections.”

Hanson and Strobridge said they expect lawmakers to push for immediate changes.

A Pentagon task force that recommended raising Tricare fees for military retirees did not bring up the accuracy of TRS premiums when it issued a final report in mid-December.

The Task Force on the Future of Military Health Care said the Pentagon needs to wait three to five more years to gain more experience before making any significant changes.

Gail Wilensky, co-chair of the task force, said having a reserve health plan seems an important way to improve the overall health care of reservists, which can be a critical readiness issue.

But she added that reservists face obstacles in using the plan, such as finding doctors who are part of the Tricare network in areas that are not near military communities. Many retirees have that same complaint, she said.