Tricare Employer Health Plans

Posted: March 26, 2012 in Uncategorized
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Sen. Lindsey O. Graham ( R-SC) made a request to the Congressional Budgrt Office (CBO) for a determination on the budgetary effect of regulations limiting the ability of employers to offer incentives to employees to use TRICARE. In response CBO has analyzed whether the limitation on employer incentives to TRICARE-eligible beneficiaries (section 707 of the John Warner National Defense Authorization Act for Fiscal Year 2007, Public Law 109-364) has resulted in budgetary savings for the Department of Defense. Section 707 restricts the ability of employers to offer subsidies and other incentives to their TRICARE-eligible employees to use TRICARE in place of employer-sponsored health care plans. CBO estimates that somewhere between 45,000 and 70,000 working-age military retirees accepted incentives prior to implementation of section 707 to use their TRICARE benefit (as much as 5 percent of the total population of working-age military retirees), with the vast majority of those incentives being in the form of employer-subsidized TRICARE supplements. Based on the available information, CBO estimates that there is a high probability that the enactment of section 707 has resulted in budgetary savings for the Department of Defense (DoD) and that the expected value of those savings is about $55 million per year (in 2010 dollars). However, because of certain effects on federal revenues, the expected value of the net savings to the federal government as a whole is less: about $30 million per year. [Source: CBO ltr 22 Feb 2012 ++]

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