Military’s health costs may soar

Active and retired service personnel and their families are increasing their use of the military health care system at a faster rate than civilians enrolled in comparable private health programs, according to a report by the Congressional Budget Office.

As a result, the annual cost to the Defense Department’s health-care program could grow from $51 billion in fiscal 2013 to $65 billion by 2017 and to $90 billion by 2030, according to CBO estimates in the report “Long-Term Implications of the 2013 Future Years Defense Program.”

That means, according to CBO projections, the Defense Department, which will pay out 9 percent of its base budget for health care in fiscal 2013, would be paying out 14 percent in 2030, roughly equivalent to what it spends today on all military research-and-development programs.

The CBO’s projections are higher than the Pentagon’s because it “assumes that the Congress will continue its history of rejecting DoD’s proposals to shift some health care costs to the military beneficiaries receiving the care,” the report says.

The Defense Department this year sought to increase the annual fees in the Tricare program for service retirees still working in private jobs and Medicare-eligible military retirees, and the pharmacy co-payments for active-duty personnel, retirees and their families.

Those changes would have generated savings of some $13 billion over the next five years, according to the CBO. Nonetheless, the House voted to prohibit almost all of the Pentagon’s proposals in its version of the fiscal 2013 defense authorization bill. The Senate is expected to follow suit.

One reason for the increased usage of the military health care system is that it is cheaper.

“Low out-of-pocket expenses for Tricare beneficiaries (many of whose co-payments, deductibles, and maximum out-of-pocket payments have remained unchanged or have decreased since the mid-1990s), combined with the increased costs of alternative sources of health insurance coverage, make the Tricare program relatively more attractive each year,” according to the CBO report.

The result: “A larger share of military retirees and their dependents are relying on the program rather than participating in health insurance provided by civilian employers or purchasing of their own,” the CBO said. For example, last year only 25 percent of military retirees and their families enrolled in private health care programs. That was half the 50 percent of retirees who used private health care programs back in 2001.

— Walter Pincus,

The Washington Post