washingtonscene
LEGISLATIVE NEWS THAT AFFECTS YOU Trust TFL Fund?
TRICARE For Life (TFL) is delivered through a trust fund, but TRICARE for under-65s isn’t. This year’s pharmacy copayment and sequestration threats highlight how that difference could affect you.
W
hen Congress approved TRICARE For Life (TFL) and the TRICARE Senior Pharmacy
program in 2000 (for implementation in 2001), the new law set up a trust fund mechanism to cover these new benefits for Medicare-eligible military beneficiaries. At the time, legislators supporting the
trust fund said it would ensure the new benefits always would be funded and wouldn’t be subject to the whims of the an- nual appropriations process. After a decade of expe-
rience, we’ve learned the TFL trust fund is a double- edged sword. First, we’ve learned it of- fers no guarantee the TFL benefit won’t be changed. Trust fund or not, the gov- ernment still has to pay for it. And when government lead- ers think the cost is getting too high, they propose chang- ing it — such as the Penta- gon’s FY 2013 enrollment fee proposal. Second, the trust fund makes it much
you’re older or younger than age 65, the military health care funding system will help you in some ways and hurt you in others.
Whether
harder to win any needed benefit improve- ments. That’s because any benefit delivered through a trust fund falls under what Con- gress calls “mandatory spending” (that is, not subject to annual appropriations). Under Congress’ rules, if the Armed Ser-
vices Committee wants to improve a TFL benefit, it has to pay for that by cutting an equal amount from other mandatory spend-
ing within its purview. That means cutting retired pay, Survivor Benefit Plan payments, or some other TFL benefit. Robbing Peter’s benefits to improve Paul’s is a no-win situa- tion, so it usually won’t happen. The result? When Congress adopted new TRICARE preventive care programs (e.g., paying for wellness and smoking cessation efforts), TFL beneficiaries age 65 and older had to be excluded. When the administration proposed higher pharmacy copay- ments, the stumbling block in rejecting those hikes was they apply to people both over and under age 65. If the revenue from charging Medicare-eligibles higher fees is to be rejected by keeping copayments down, the lost revenue must be made up in another manda- tory spending program. That’s why the House- passed pharmacy plan
(which keeps pharmacy copayments sig- nificantly lower for both over- and under- 65s) had to require Medicare-eligibles to participate in a one-year test of mail-order refills for maintenance medications. The lower cost of mail-order delivery will offset the lost revenue from over-65s’ copayments. So MOAA has become more than a little jaundiced about setting up any future trust funds. Our experience has been they have more downsides than upsides.
*take action: Go to
http://capwiz.com/moaa/home to keep up-to-date on legislation affecting you. NOVEMBER 2012 MILITARY OFFICER 33
Fact vs. Fiction on Personnel Costs In the article “Fact vs. Fiction,” page 54, MOAA’s Government Relations staff examines defense leaders’ asser- tions that military pay and benefits will break the Pentagon bank. Check out the startling statistics defense lead- ers never mention.
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