Employer-Paid TRICARE Plans to End

[unhappycamper]

Employer-Paid TRICARE Plans to End
Tom Philpott | September 27, 2007


Phil Peterson, a retired Navy chief petty officer working for a major defense contractor in Greenville, S.C., got word last week that his company’s TRICARE supplemental insurance plan, which covers all costs not picked up by Peterson’s TRICARE Standard benefit, must end by Jan. 1.

Peterson is among tens of thousands of working retirees who will see their health costs rise from a law Congress enacted last year that prohibits companies as well as state and local governments from offering health plans or other incentives to encourage military retirees who work for them to drop employer-provided health plans and use their TRICARE benefits instead.

Peterson, 53, dropped his company’s group health insurance four years ago when it began offering a free supplement to TRICARE Standard, the military’s traditional fee-for service health insurance. Peterson saw family out-of-pocket medical costs fall to zero that year.

“It turned out to be a very good thing because I didn’t have to worry about deductibles or co-payments for office visits, prescriptions or anything else,” Peterson said. “It’s not right now that somebody up in Washington is telling me, ‘We don’t want you to use it so we can save money.’ ”

Employers who offer a TRICARE supplement have saved themselves a lot of money, says the Congressional Budget Office. Wrap-around insurance to TRICARE Standard might cost a company just over $1200 a year. But if a military retiree on the payroll can be enticed to use TRICARE instead of the company’s group health plan, the company avoids a cost of up $5500 a year.

~snip~

Congress last year rejected the Bush administration’s call to raise TRICARE fees and co-payments for retirees under age 65 and their families. But then Defense officials lobbied hard for a fiscal consolation prize: an end to employer-paid TRICARE supplements. Donald Rumsfeld, who was still defense secretary, called Senate and House leaders, including Sen. John Warner (R-Va.), then chairman of the Senate Armed Services Committee, to urge adoption of the provision, a committee source recalled. Rumsfeld showed lawmakers a health plan menu from a major defense contractor that included an offer of a few thousand dollars in cash to any retiree who would rely on TRICARE rather than the corporate health plan.


Rest of article at: http://www.military.com/features/0,15240,150697,00.html



uhc comment: Any TRICARE recipients out there? What does this does this do to your financial position?