Sen. John McCain, R-Ariz., has advised the 12-member Joint Select Committee on Debt Reduction to consider ending access to TRICARE Prime, the military’s popular managed care option, for working-age retirees and their families, to avoid spending cuts that would directly impact readiness.
Unless at least seven of 12 super committee members agree on a $1.5 billion, 10-year package to attack the national debt, the Budget Control Act signed in August will require automatic federal program cuts of $1.2 trillion, with roughly $450 billion from defense programs.
The cuts would be in addition to nearly $500 billion in defense spending curbs over 10 years already ordered by President Obama as part of an earlier deficit-reduction agreement.
Uniformed leaders of the Army, Navy, Air Force and Marine Corps testified Tuesday to the devastating impact these automatic cuts, called sequestration, would have on force levels and weapons modernization programs if the super committee can’t reach a deal by its Nov. 23 deadline.
Pulling the TRICARE Prime idea from a recent Congressional Budget Office report, McCain said forcing retirees under 65 to use TRICARE Standard, the fee-for-service option, or health insurance from civilian employers, or space-available care at base clinics or hospitals, could save DoD medical accounts up to $111 billion over the next decade.
McCain, ranking Republican on the Senate Armed Services Committee, was once a champion for expanded TRICARE benefits to retirees. He was not available for an interview. But a staff member explained the senator feels eliminating retiree TRICARE Prime is more acceptable than alternatives to cut equipment, training or key weapon programs needed by the current force.
“Faced with the possibility of sequester and its potential for an enormously harmful impact on national security,” he said, McCain wants the super committee to consider carefully options “that would not impose drastic negative impacts on the Defense Department, or the currently serving force and their families, while sustaining the TRICARE benefit.”
As reported here two weeks ago, McCain also has embraced President Obama’s proposal to set a $200 a year enrollment fee for TRICARE for Life, the prized supplement to Medicare for military beneficiaries age 65 and older.
Retirees under 65 are another 40 percent of the TRICARE-eligible population. TRICARE Standard users face higher out-of-pockets costs, with annual deductibles and cost-sharing requirements but they can choose their own care providers. Beneficiary costs can’t exceed an annual catastrophic cap. But CBO suggests raising that cap of $3,000 a year per family to $7,500.
CBO said 71 percent of working-age military retirees currently use some form of TRICARE. That number would fall to 35 percent if access to Prime were denied. Most of these beneficiaries would elect to use civilian employer health insurance, thus reversing a trend over the last few decades of military retirees leaving employer insurance plans to use TRICARE.
Tom Philpott can be contacted at Military Update, P.O. Box 231111, Centreville, Va. 20120-1111, or by e-mail at: