STATEMENT BY
COLONEL
CHARLES C. PARTRIDGE, U.S. ARMY, RETIRED
NATIONAL
ASSOCIATION FOR UNIFORMED SERVICES
INTRODUCTION
Mr. Chairman and distinguished members of the Committee, the National Military and Veterans Alliance would like to express its appreciation to you for holding these important hearings. The testimony provided here represents the collective views of our members.
The Alliance includes 23 military and veterans' organizations. These organizations represent over 3,500,000 members of the seven uniformed services, officer and enlisted, active duty, reserve, National Guard, retired and other veterans plus their families and survivors.
The National Military and Veterans Alliance would like to thank the Personnel Sub-Committee and the Full Armed Services Committee for its leadership in passing landmark legislation last year extending the Pharmacy benefit and TRICARE system to Medicare eligible military retirees, their families and survivors, making the lifetime benefit permanent, establishing the DoD Medicare Eligible Retiree Health Care Fund, reducing the catastrophic cap and making other TRICARE improvements.
Your actions in leading the fight for the Military Health Care initiative in the National Defense Authorization Act for FY 2001, have restored the faith of millions of military personnel, retirees and their families. They believe that the nation does indeed value their service. This legislation also has a readiness impact since once again retirees can be counted on to recommend military service to the young men and women of our nation and to aid in the military services recruiting and retention efforts. In addition, the changes, when implemented will result in improved satisfaction of those currently serving.
Enacting the TRICARE For Life (TFL) legislation provides the authority for the government to keep the promise of healthcare for life to the men and women of the Uniformed Services who dedicated their lives in service to our country.
The Assistant Secretary of Defense (Health Affairs) and the TRICARE Management Activity have set up working level and senior level panels that include representatives of the Associations and the retiree Community, to develop the program and work out problems. It is clear that the policy makers and those charged with execution of the TRICARE For Life Program and the Pharmacy benefit are working hard to design an excellent medical program. In fact, they are glad to be involved in the process of rebuilding the military health system rather than continuing down the path of deeper funding and personnel reductions. The DoD Health Affairs Team has established an unparalleled working partnership with us as they implement the Pharmacy and TRICARE for Life legislation. As this landmark legislation is implemented, we of course need adequate funding. We also need organizational stability so that the changes in the Military Health System passed in the National Defense Authorization Act, for FY 2001 can be put in place as smoothly as possible and implemented on schedule. All of us who have gone through the growing pains of TRICARE over the past 10 years do not want to revisit those turbulent times, particularly at the same time the Department is implementing the new Pharmacy and TRICARE for Life benefits.
The effective date of the pharmacy benefit is 1 April 2001, just 17 days away while the full TRICARE FOR LIFE benefit is to be available 1 October 2001. Full funding for both of these programs is needed if they are to deliver on the high expectations of the retiree community. Unless the chronic underfunding of the Military Health System is corrected, the TRICARE for Life program will be built on sand and the entire program will be unsatisfactory and a disappointment to everyone.
The attached chart (Exhibit A) graphically displays the longstanding underfunding of the Military Health system. By every measure, military health care has been short changed over the past six years. The result has been many complaints surrounding the TRICARE system, the deterioration of the Military Treatment Facilities physical plant and inability to purchase up to date medical equipment.
DoD faces the difficult challenge of implementing an entitlement program and paying for it from the discretionary portion of their budget - both in FY01 and in FY02 until the Department of Defense Medicare-Eligible Retiree Health Care Fund becomes effective on 1 October 2002.
According to the Chairman of the Senate Budget Committee, the Military Health System is short $1.4 billion this year (2001). We understand that the DoD number is $1.4 billion as well. The Budget Committee Chairman proposes adding these funds in a supplemental this year to restore the baseline, then building on that in the FY 02 Budget. We hope that the members of this subcommittee will support this budget initiative which, if approved will increase the top line of the Defense Budget and allow implementation of legislation passed last year.
TRICARE PRIME and TRICARE SENIOR PRIME
We understand and support the decision to implement the TRICARE for Life Medicare supplemental on 1 October 2001, and then determine how TRICARE Prime for seniors will be implemented and the future of TRICARE Senior Prime. We are pleased that even if DoD and the Health Care Financing Administration cannot reach agreement on Medicare reimbursement DoD will continue the TRICARE Senior Prime program at the demonstration sites for those currently enrolled and those in TRICARE Prime. This is reassuring to retirees enrolled in the program that commitments made will be honored.
Medicare Part B Enrollment
The law enacting the TRICARE for Life program requires Medicare Part B enrollment for participation in the TRICARE for Life program. In addition, Part B is required for all retirees reaching age 65 on or after 1 April 2001, for them to participate in the new pharmacy program. Although we believe in the principle that the military benefit should stand-alone and not require Part B participation, the Part B will save the TFL program funds. However, we believe requiring Part B for participation in the pharmacy program does not result in significant savings and creates a hardship for some beneficiaries, and it should be eliminated. In addition, some 12,000 retirees residing overseas are required to participate in Part B Medicare in order to enroll in TRICARE for Life. Since they cannot use the Medicare benefits overseas we recommend that this requirement be eliminated for all retirees residing overseas.
Some retirees who lived near military installations did not enroll in Part B because they believed they would receive care at the hospitals and clinics located on the military bases, which subsequently closed. Many are in their 70's and 80's now and to enroll would require them to pay huge penalties.
We recommend that those who relied on these hospitals and were 65 on or before 6 October 2000, the date enacted by NDAA for FY 01, should be allowed to participate in TFL without enrolling in Part B Medicare.
FEHBP
The NMVA supported legislation last year that would provide military personnel the option of participating in the Federal Employees Health Benefit Program. Currently, a bill introduced in the 107th Congress, HR 179, would provide that option. In addition, DoD is conducting a demonstration project authorized in 1999 that would allow up to 66,000 Medicare eligible beneficiaries to participate in FEHBP at up to 10 sites. The demonstration ends on 31 December 2002. As of 26 February, there are 7,588 participants. The program is very popular in Puerto Rico with over 2,700 participants. Many organizations in the NMVA believe that FEHBP should be an option for all uniformed service beneficiaries. We are confident that the TRICARE program and the TRICARE for Life program will be successful. Further, because they are an outstanding value for most beneficiaries, they will be the health plans of choice. However, in a few cases, the TRICARE/TRICARE for Life options may not be the best choice, or may not be available; and for that reason, we believe the FEHBP option should be enacted. Certainly the FEHBP demonstration should be extended at least until 2005, and the geographical limits removed. Further, those who are currently enrolled should be allowed to remain in the program for as long as they wish. Providing the FEHBP as an option would help stabilize the TRICARE program, provide a market based benchmark for cost comparison and be available to those for whom TRICARE/TRICARE for Life is not an adequate solution.
CLAIMS PROCESSING
Most Medicare eligible military retirees because of lack of access to MTFs, have used the Medicare system and are happy with the claims process. The Medicare provider files the claim with Medicare, who pays the Medicare portion of the claim, forwards the claim to the second payer, the Medigap insurance company, and forwards an Explanation of Benefits to the patient. The Medigap insurer pays the claim and notifies the beneficiary that the claim is paid or that some co-pay or deductible is due. The system is fast, efficient and understandable. It is essential that the TFL process work just as well and that the providers are satisfied. Otherwise, doctors, many of whom are reluctant participants in Medicare and TRICARE will be unwilling to accept TFL beneficiaries. We have discussed this in the working level panels and know that all are interested in making this work efficiently as well. This is, however, an area of concern that we will continue to monitor and if legislation is needed we will seek your support.
DoD/VA Beneficiaries
The VA portion of the President's Budget submission indicated that the Administration proposes that military retirees be required to select either DoD or VA as their health care provider. This would make retirees second-class citizens denying them VA care or forcing them to give up their military health care benefit. This test is not applied to other citizens and NMVA strongly opposes it. Since VA provides treatment of service connected disabilities free of charge, the military retiree who obtained most care through the military TRICARE system would be required to pay for services previously provided by the VA at no cost. We urge this subcommittee to oppose the proposal.
THE DoD MEDICARE ELIGIBLE RETIREE HEALTH CARE FUND
NMVA is most interested in the design of the DoD Health Care Fund and how the payments will be made.
NMVA believes that these funds should be "vested" in the beneficiary. If the beneficiary uses the MTF, then the funds should be paid to the MTF. Likewise, if the beneficiary uses other providers, then that is where the payment should be made. We believe decisions regarding the Health Care Fund can be critical to the success of the TFL program and to the quality of the Military Health System.
SUMMARY
Mr. Chairman and distinguished members of the Personnel Sub Committee, we want to thank you for your leadership on military health care last year and for holding these hearings on implementation this year. You have made it clear that military health care continues to be a high priority and you have our support in seeing successful implementation of these health care initiatives this year.
2120 Rayburn House Office Building
Washington, D.C. 20515
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