Retirees not near bases to lose TRICARE Prime Oct. 1
January 10, 2013
by Tom Philpott
managed-care option -- TRICARE Prime -- will be ended Oct. 1 for
retirees, their family members and for military survivors who reside
more than 40 miles from a military treatment facility or from a base
closure site, TRICARE Management Activity announced
Most of these 171,400 beneficiaries
will need to shift health coverage from Prime to TRICARE Standard, the
military’s fee-for-service health insurance option. For
beneficiaries who use more than preventive health care during the year,
the shift will mean higher out-of-pocket costs.
Defense officials expect the move to
save the health care system up to $55 million a year.
The rollback in number of Prime service
areas will not impact active duty members or their families living far a
military base for tours as recruiters or in other remote assignments.
Their health insurance through the separate TRICARE Prime Remote program
will not change.
But grown children of members or of
retirees who elected coverage under TRICARE Young Adult insurance will,
like retirees, lose access to managed care providers under Prime if they
reside more than 40 miles from a base.
TRICARE had considered ending Prime in
remote service areas of the West Region on April 1, to coincide with
changeover for that region’s TRICARE
support contactor. On that date, the TriWest Healthcare Alliance will
give way to UnitedHealthCare Services of Minnetonka, Minn.
"The primary concern was the beneficiaries. We
didn’t feel like we had enough time to notify them and help
them through the transition,"explained S. Dian
Lawhon, director of beneficiary education and support at TRICARE
Management Activity headquarters in Falls Church, Va.
Congressional committee staffs also had
complained about a staggered start across regions to a major benefit
change. So the Prime service area rollback will occur in the North,
South and West regions simultaneously next fall. This will cause another
set of challenges in remote areas of the West Region that an April 1
start there would have avoided.
TriWest needed years to build its
current network of providers far from military bases across the region.
UnitedHealth will now be paid additional monies under a contract change
order to build its own remote networks of providers. Those networks will
only operate until October.
How successful UnitedHealth can be in
luring providers, or even beneficiaries, to new networks that will be
dissolved quickly is anyone’s guess but
the scheme has skeptics.
"They are just kicking the can for six months at
significant expense to the government,"said one TRICARE
contracting official with knowledge of the move. "When they have a
[defense budget] sequester looming, proceeding down that path really
doesn’t make a lot of sense."
TRICARE’s far more
critical challenge, however, is to educate impacted beneficiaries that
their Prime coverage will end and most of them will need to shift to
TRICARE Standard. An aggressive information campaign is planned with the
first of three letters of explanation and warning to be sent to affected
beneficiaries and families within 30 days, Lawhon said.
Under Prime, beneficiaries get their
care from a designated network of providers for a fixed annual
enrollment fee, which for fiscal 2013 is set at $269.28 for individual
coverage or $538.56 for family. Retirees and family members also are
charged a co-pay of $12 per doctor visit.
Under TRICARE Standard, beneficiaries
choose their own physicians and pay no annual enrollment fee. When in
need of care, retirees must pay 25 percent of allowable charges
themselves . They also pay an annual deductible of $150 for individual
or $300 per family. Total out-of-pocket costs, however, cannot exceed a
$3000 per family catastrophic cap.
Some beneficiaries who see local Prime
coverage end will be able to enroll in a remaining Prime network near
base. To do so they would have to reside less than 100 miles from that
exiting network and would have to waive the driving-distance standard
that TRICARE imposes for patient safety. That standard when enforced
required that an assigned network provider be within a 30-minute drive
of the beneficiary’s
If displaced Prime beneficiaries meet
the two requirements, then an existing network will make room for them
regardless of number of beneficiaries enrolled, Lawhon said. But joining
a new network also will mean new doctors. So most displaced Prime
beneficiaries are expected to choose to use TRICARE Standard instead to
get care locally and , in many cases from the same physicians who
treated them under TRICARE Prime.
"People who use Standard are very, very pleased with
it,"Lawhon said. As a group they report higher scores on
customer satisfaction surveys than do Prime user, she said.
The push to end Prime in areas away
from bases began in 2007 with design a third generation of TRICARE
support contracts. But it took years to settle on winning contractors
for the three regions, however, due to various bid protests and award
reversals. Health Net Federal Services has run North Region under the
new contract since April 2011. Humana Military Healthcare Services has
had the South Region under the new contract since April 2012. Along with
TriWest, these contractors have continued to run remote Prime networks
under temporary order while waiting final word from TRICARE on imposing
Prime area restrictions written into original contracts.
The driver behind new restrictions on
Prime is cost. Managed care is more cost efficient for the private
sector but more expensive for the military to offer than traditional
fee-for-service insurance. This is true in part because Congress
won’t allow Prime fees to keep pace with health inflation. So
more beneficiaries using Standard means less cost to TRICARE.
Of beneficiaries impacted by the Prime
area rollback, more than half, almost 98,000, reside in South Region.
Roughly 36,000 are West Region beneficiaries and more than 37,000 are in
the North Region.
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