Increases in Tricare Costs: Background and Options for Congress

In its FY2007 budget submission, the Department of Defense (DOD) proposed increases in Tricare enrollment fees, deductibles, and pharmacy co-payments for retired beneficiaries not yet eligible for Medicare. The raises were justified by DOD as necessary to constrain the growth of health care spending as a proportion of the overall defense budget in the next decade. Many beneficiaries argued that the proposed hikes were unfair and unnecessary. The proposed increases found favor in neither chamber and ultimately the FY2007 Defense Authorization Act (P.L. 109-364) prohibited increases in premiums, deductibles and co-payments prior to September 30, 2007. For FY2008, the Administration based its budget submission on the assumption of fee increases but the FY2008 National Defense Authorization Act (P.L. 110-181) extended the prohibition of increases in co-payments and enrollment fee until October 2008 and Congress may move to extend them through the end of FY2009. This report will be updated as necessary.