TRICARE Pharmacy Copay

Posted: July 6, 2012 in Uncategorized

As it now stands both the House and Senate NDAA bills effectively kill most of the Pentagon-proposed TRICARE fee hikes. But there will be some increases in TRICARE pharmacy copays, and the only issue is how big the hikes will be. That's where the House and Senate bills take significantly different approaches. The Senate bill is silent on the pharmacy copay issue. Since current law gives the Secretary of Defense authority to set pharmacy copays, the Senate bill silently endorses the Pentagon-proposed plan to more than double the copays this year, and triple them over the next five years. The problem the Senate Armed Services Committee faced in stopping the proposed Rx copay hikes lies in Senate budget rules that require the Committee to find other offsetting cuts in either military retirement, survivor benefits, or other TFL benefits. Why? Because the offset law applies to so-called "mandatory spending" programs, and that includes any benefit funded through a trust fund – which TFL is.
When the Pentagon proposed higher Rx copays for TFL beneficiaries, it reduced the budget for TFL spending by the government – with the difference made up by the assumed revenues from higher copays. To reduce or bar the copay hikes, the Committee would have to replace the lost revenue by increasing government spending on TFL. And that requires an offsetting spending cut. The Senate didn't want to identify an offset – which meant letting Pentagon leaders double and triple Rx copays. The House thought those copay increases were so bad that they came up with an alternative offset that did three things:
 It substantially reduced the Pentagon-proposed copay increases for FY2013
 It put a statutory cap on any increases after FY2013, so that the percentage increase in Rx copays in any year couldn't exceed the retired pay COLA percentage
 To pay for these, it established a five-year pilot program that would require TFL beneficiaries to use the mail-order system for at least one year to refill any maintenance medications (waivers would be allowed under certain hardship or other conditions); after one year, beneficiaries could opt out of mail-order participation.

Here's the bottom line — compared to the DoD/Senate plan, the House-passed plan would:
 Cut retail copays by about 40% below the DoD plan
 Keep access to non-formulary meds in retail stores
 Cut mail-order copays by more than 50% for brand-name meds
 Cut mail-order copays by 25% for non-formulary meds
 Keep mail-order copays at zero for generic meds
More than 90% of those who use the present mail-order system are very happy with it so mandatory mail-order use should not be a big issue to most. Without the House-proposed statutory cap on future increases, we'd be held hostage to bigger copay increase proposals every year. But if the COLA-based cap is put in law as the House proposes, Congress will be able to ignore any future proposed hikes above that rate – and won't have to come up with any offset. At this point, the only options on the table are: (1) letting the Pentagon impose whatever copays it wants or (2) accepting the House alternative plan. All things considered, the significantly lower copays and future protections of the House plan would be worth requiring a one-year mail-order trial for maintenance med refills. After a one-year trial, everyone would recover full choice. Once they try it, the vast majority of new enrollees will most likely be pleased with the convenience and significant cost savings of the mail-order system. [Source: MOAA Leg Up 8 Jun 2012 ++]


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