Defense Health Care
Most Reservists Have Civilian Health Coverage but More Assistance Is Needed When TRICARE Is Used Gao ID: GAO-02-829 September 6, 2002To expand the capabilities of the nation's active duty forces, the Department of Defense (DOD) relies on the 1.2 million men and women of the Reserve and National Guard. Currently, reserve components constitute nearly half of the total armed forces. Although DOD requires reservists to use TRICARE DOD's health care system for their own health care, using TRICARE is an option for their dependents. Nearly 80 percent of reservists had health care coverage when they were not on active duty, according to a GAO survey. The most frequently cited sources of coverage were civilian employer health plans and spouses' employer health plans. Few dependents of mobilized reservists experience disruptions in their health coverage--primarily because most maintained civilian health coverage while reservists were mobilized. Ninety percent of the reservists with civilian health coverage maintained that coverage. The 5-year cost of the coverage options delineated in the 2002 National Defense Authorization Act range from $89 million, for expanding the transition benefit allowing mobilizations, to $19.7 billion, for continuous coverage under the Federal Employees Health Benefits Program, as estimated by the Congressional Budget Office.
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United States General Accounting Office:
GAO:
Report to Congressional Committees:
September 2002:
Defense Health Care:
Most Reservists Have Civilian Health Coverage but More Assistance Is
Needed When TRICARE Is Used:
GAO-02-829:
Contents:
Letter:
Results in Brief:
Background:
Percentage of Reservists with Coverage Is Similar to That Found in the
General Population:
Most Mobilized Reservists Maintain Civilian Coverage; Dropping It May
Result in TRICARE Problems:
Alternative Coverage Options Presented in 2002 NDAA Vary Widely in
Cost:
Conclusions:
Recommendations for Executive Action:
Agency Comments:
Appendix I: Scope and Methodology:
Appendix II: CBO‘s Assumptions for Cost Estimates:
Options for Continuous Coverage under TRICARE (Shown in Table 2):
Options for Continuous Coverage under FEHBP (Shown in Table 3):
Options during Mobilizations (Shown in Table 4):
Option following Mobilizations (Shown in Table 4):
Appendix III: Comments from the Department of Defense:
Appendix IV: GAO Contacts and Staff Acknowledgments:
Tables:
Table 1: Health Care Benefits Available for Dependents of Mobilized
Reservists by TRICARE Plan Option:
Table 2: Costs to DOD of Providing Continuous Coverage under TRICARE:
Table 3: Costs to DOD of Providing Continuous Coverage under FEHBP:
Table 4: Costs to DOD of Providing Coverage during/following
Mobilizations:
Figure:
Figure 1: Types of Health Care Coverage of Reservists Other than Active
Duty Coverage:
Abbreviations:
CBO: Congressional Budget Office:
DOD: Department of Defense:
DEERS: Defense Enrollment Eligibility Reporting System:
FEHBP: Federal Employees Health Benefits Program:
MTF: military treatment facility:
NDAA: National Defense Authorization Act:
SSCRA: Soldiers‘ and Sailors‘ Civil Relief Act of 1940:
TMA: TRICARE Management Activity:
TPR: TRICARE Prime Remote:
USERRA: Uniformed Services Employment and Reemployment Rights Act of
1994:
[End of section]
United States General Accounting Office:
Washington, DC 20548:
September 6, 2002:
Congressional Committees:
To expand the capabilities of our nation‘s active duty forces, the
Department of Defense (DOD) relies on the 1.2 million men and women of
the Reserve and National Guard. [Footnote 1] Currently, reserve
components constitute nearly half our total armed forces. Reservists
mobilized [Footnote 2] under federal authorities are covered by
TRICARE, DOD's health care system. [Footnote 3] Also, their dependents,
which include spouses, children, and others who qualify, are eligible
for TRICARE benefits. While DOD requires reservists to use TRICARE for
their own health care, using TRICARE is an option for their dependents.
During mobilizations some reservists may choose to save the cost of
premiums by dropping civilian insurance for their dependents and
relying on TRICARE, which has no associated premium. However, doing so
means that dependents must learn the benefits and requirements of a new
health plan. It also means that they may be unable to use the same
civilian providers if these providers do not participate in TRICARE
networks or accept TRICARE patients. To minimize potential disruptions
resulting from dropping and resuming civilian coverage, military
advocates have recommended that DOD provide a health benefit to
reservists and their dependents when reservists are not on active duty.
The National Defense Authorization Act (2002 NDAA) for Fiscal Year 2002
[Footnote 4] directed that we study the health care benefits of reserve
component members and dependents and the effect mobilization may have
on these benefits. We (1) identified the health care coverage
reservists have when not on active duty, (2) determined the extent to
which mobilizations cause disruptions in coverage for reservists and
their dependents, and (3) assessed the costs of various options
specified in the 2002 NDAA, including providing reservists and their
dependents health care through TRICARE, the Federal Employees Health
Benefits Program (FEHBP), or civilian coverage.
To determine the coverage reservists have when not on active duty and
the extent to which mobilizations cause disruptions in coverage, we
obtained preliminary analyses of responses to health care related
questions from DOD‘s 2000 Survey of Reserve Component Personnel.
[Footnote 5] We also used a questionnaire to obtain information from
360 mobilized reservists on the type of civilian health care coverage
they and their dependents had and the extent to which mobilizations
caused disruptions in coverage. Included in these contacts were 286
reservists from three judgmentally selected reserve component units of
at least 50 reservists”representing the Army, Navy, and Air Force”that,
at the time of our audit, were currently mobilized or had recently
completed a mobilization. [Footnote 6] We also contacted by telephone
74 reservists (or knowledgeable dependents) from a randomly selected
sample of 100 reservists, from about 100,000 who had been mobilized
since July 2000. We interviewed officials and representatives from the
Office of the Assistant Secretary of Defense for Reserve Affairs, the
Office of the Assistant Secretary of Defense for Health Affairs, the
TRICARE Management Activity (TMA), reservist advocacy groups, and
others. We also reviewed our prior work on reservists and military
health care. For costs of the different 2002 NDAA options for providing
coverage to reservists and their dependents, we relied on estimates
made by the Congressional Budget Office (CBO). [Footnote 7] (For more
on our scope and methodology, see app. I.) We conducted our work from
November 2001 through July 2002 in accordance with generally accepted
government auditing standards.
Results in Brief:
Nearly 80 percent of reservists had health care coverage when they were
not on active duty, according to DOD‘s survey. This rate is similar to
that of comparable groups within the overall U.S. population. Reservists
obtained coverage through a variety of sources, and some reservists had
more than one source of coverage. The most frequently cited sources of
coverage were civilian employer health plans (75 percent of reservists)
and spouses‘ employer health plans (28 percent of reservists).
Reservists with dependents were more likely to have health care
coverage than those without dependents.
Few dependents of mobilized reservists experienced disruptions in their
health coverage”primarily because most maintained civilian health
coverage while reservists were mobilized, according to DOD‘s survey. Of
reservists with civilian coverage, about 90 percent maintained it.
Reservists we interviewed often told us that they maintained this
coverage to better ensure continuity of health benefits and care for
their dependents. While most of the reservists we interviewed continued
to receive assistance from their employers for their premiums, out-of-
pocket costs for a few were increased because they not only continued
to pay their employee contribution but also paid the employer
contribution. Reservists who dropped civilian insurance and whose
dependents used TRICARE reported difficulties moving into the
system”finding a TRICARE provider, establishing eligibility,
understanding TRICARE benefits, and obtaining assistance when questions
or problems arose. While full-time active duty beneficiaries have
reported similar difficulties, problems can be magnified for
reservists‘ families. For example, 70 percent of reservists live and
work in areas distant from military treatment facilities (MTF). Like
the 5 percent of active duty families in these locations, mobilized
reservists‘ families cannot take advantage of the assistance and array
of services found near MTFs. However, we found that when education and
administrative assistance were targeted to mobilized reservists and
their dependents, reported problems with TRICARE were reduced, even in
situations where dependents did not live near MTFs.
The 5-year cost (2003 through 2007) of the coverage options delineated
in the 2002 NDAA range from about $89 million, for expanding the
transition benefit following mobilizations, to about $19.7 billion, for
continuous coverage under FEBHP with no premium, as estimated by CBO.
Providing continuous TRICARE coverage for reservists and their
dependents during the entire enlistment period”regardless of
reservists‘ mobilization status”with benefits similar to those for
active duty personnel is estimated to cost DOD about $10.4 billion.
Providing insurance through FEHBP would be more expensive to DOD
because the premium would be based on the existing FEHBP pool”an older
population using more health care services than would be expected to be
used by reservists and their dependents. While CBO estimates the cost
of providing health care for reservists and their dependents under
FEHBP to be about $10.9 billion, similar to the cost of providing the
TRICARE benefit, it estimates DOD‘s health insurance premium costs for
FEHBP to be about $19.7 billion. Costs could be reduced if reservists
paid a portion of the premium. Providing alternative coverage only
during periods of mobilization would be less costly. For example, CBO
estimates that paying reservists‘ entire civilian health insurance
premiums while they were mobilized would cost about $1.8 billion.
Because problems could be reduced through improved education about
TRICARE‘s benefits and better assistance while navigating the TRICARE
system, we are recommending that DOD ensure that reservists receive
information throughout their careers about TRICARE benefits and that
during mobilizations DOD provide TRICARE administrative and customer
service assistance targeted to the needs of reservists and their
dependents. In commenting on a draft of this report, DOD concurred with
our recommendations.
Background:
Reserve components participate in military conflicts and peacekeeping
missions in areas such as Bosnia, Kosovo, and southwest Asia, and assist
in homeland security. From fiscal year 1996 through fiscal year 2001, an
average of about 11,000, or 1 percent, of the roughly 900,000 reservists
were mobilized each year. [Footnote 8] The length of mobilizations can
be as long as 2 years [Footnote 9] with the mean length of
mobilizations for the 6-year period we reviewed being 117 days.
[Footnote 10] As of April 2002, about 80,000, or 8 percent, of
reservists had been mobilized for 1 year for operations related to
September 11, 2001. [Footnote 11] At the same time, additional reserve
personnel continued to be deployed throughout the world on various
peacekeeping and humanitarian missions.
The rights of mobilized personnel of the reserve components are
protected under the Soldiers‘ and Sailors‘ Civil Relief Act of 1940
(SSCRA), [Footnote 12] as amended, and by the Uniformed Services
Employment and Reemployment Rights Act of 1994 (USERRA), [Footnote 13]
as amended. Included in these acts are protections related to health
care coverage. For example, SSCRA provides protections for reservists
who have individual health coverage. Specifically, for individually
covered reservists returning from active duty, SSCRA requires private
insurance companies to reinstate coverage at the premium rate they
would have been paying had they never left. [Footnote 14] Under SSCRA,
the insurance company cannot refuse to cover most preexisting
conditions. [Footnote 15] During military service, USERRA protects
reservists‘ employer-provided health benefits. Specifically, for
absences of 30 days or less (training periods typically last 2 weeks or
less), health benefits continue as if the employee had not been absent.
For absences of 31 days or more, coverage stops unless (1) the employee
elects to pay for the coverage, including the employer contributions,
[Footnote 16] or (2) the employer voluntarily agrees to continue
coverage. [Footnote 17] Under USERRA, employers must reinstate
reservists‘ health coverage the day they apply to be reinstated in
their civilian positions”even if the employers cannot put the employees
back to work immediately.
Reservists mobilized under federal authorities are covered by TRICARE,
DOD's health care system. If they are ordered to active duty for 31
days or more, reservists are enrolled in Prime, TRICARE‘s managed care
option, and”like other active duty personnel”are required to receive
care through TRICARE, either through 1 of 580 MTFs worldwide, or through
TRICARE‘s network of civilian providers. [Footnote 18] When reservists‘
mobilization orders are for 31 to 178 days, their dependents are
eligible for the Standard and Extra options”TRICARE‘s fee-for-service
and preferred provider options, respectively. Once eligible for
TRICARE, reservists and their dependents also become eligible for
prescription drug benefits. [Footnote 19] When reservists‘ orders are
for 179 days or more, dependents are eligible for health care under
Prime. Under TRICARE, active duty personnel, including mobilized
reservists, do not pay premiums for their health care coverage;
however, depending on the option chosen, they may be responsible for
copayments, deductibles, and enrollment requirements for their
dependents. (For an overview of these benefits, see table 1.)
Table 1: Health Care Benefits Available for Dependents of Mobilized
Reservists by TRICARE Plan Option:
Eligibility requirements:
Standard (fee-for-service): Reservist must be mobilized 31 days or
more;
Extra (preferred provider): Reservist must be mobilized 31 days or
more;
Prime (managed care): Reservist must be mobilized for 179 days or more;
dependents must enroll to be eligible for Prime.
Yearly deductible:
Standard (fee-for-service): $50-$300;
Extra (preferred provider): $50-$300;
Prime (managed care): None.
Copayment:
Standard (fee-for-service): 20%;
Extra (preferred provider): 15%;
Prime (managed care): None.
Providers:
Standard (fee-for-service): Non-network providers who will accept
TRICARE rates;
Extra (preferred provider): Network providers;
Prime (managed care): Network providers.
Source: TRICARE Management Activity as of June 2002.
[End of table]
Mobilized reservists are eligible for dental care through the military
health care system. However, like active duty dependents, mobilized
reservists‘ dependents are only eligible for dental care if they
participate in DOD‘s voluntary dental insurance program, which requires
enrollment and has monthly premiums.
Because mobilized reservists‘ dependents could be liable for two health
coverage deductibles in 1 year”their civilian insurers‘ deductible
prior to mobilization and the TRICARE Standard or Extra deductible once
mobilized”DOD has used authorities included in the National Defense
Authorization Acts for 2000 and 2001 to provide financial assistance
through several demonstration programs. [Footnote 20] For example, the
Reserves Component Family Member Demonstration Project”available for
those currently mobilized under DOD‘s Operation Noble Eagle and
Operation Enduring Freedom”eliminates the TRICARE deductible and the
requirement that dependents obtain statements that inpatient care is not
available in an MTF before obtaining nonemergency treatment from a
civilian hospital. In addition, DOD may pay non-network physicians up to
15 percent more than the TRICARE rate for treating dependents of
mobilized reservists”a cost that otherwise would be borne by dependents
if physicians required this additional payment. [Footnote 21]
Until recently, DOD had administered a transitional benefit program that
provided demobilized reservists and their dependents 30 days of
additional TRICARE coverage as they returned to their civilian health
care. The 2002 NDAA extended the transitional period during which
reservists may receive TRICARE coverage from 30 days to 60--120 days,
depending on the length of active duty service. This change more
closely reflects the 90 days that USERRA provides reservists to apply
for civilian reemployment when they are mobilized for more than 181
days, and the change will provide health care coverage if they elect to
delay return to their employment subsequent to demobilization. However,
the 2002 NDAA did not provide any transitional benefit for dependents.
[Footnote 22]
Percentage of Reservists with Coverage Is Similar to That Found in the
General Population:
Overall, the percentage of reservists with health care coverage when
they are not mobilized is similar to that found in the general
population”and, like the general population, most reservists have
coverage through their employers. According to DOD‘s 2000 Survey of
Reserve Component Personnel, nearly 80 percent of reservists reported
having health care coverage. In the general population, 81 percent of
18 to 65 year olds have health care coverage. Officers and senior
enlisted personnel were more likely than junior enlisted personnel to
have coverage. [Footnote 23] Only 60 percent of junior enlisted
personnel, about 90 percent of whom are under age 35, had
coverage”lower than the similarly aged group in the general population.
[Footnote 24] Of reservists with dependents, about 86 percent reported
having coverage. Of reservists without dependents, about 63 percent
reported having coverage.
More than three-quarters of reservists were provided health care
coverage by their civilian employers‘ health plans or their spouses‘
health plans. (See fig. 1.) Some reservists were covered by more than
one health plan.
Figure 1: Types of Health Care Coverage of Reservists Other than Active
Duty Coverage:
[See PDF for image]
This figure is a vertical bar graph depicting the following data:
Coverage type: Civilian employer;
Percentage of reservists: 75%.
Coverage type: Spouse's health plan;
Percentage of reservists: 28%.
Coverage type: VA;
Percentage of reservists: 17%.
Coverage type: Other[A];
Percentage of reservists: 17%.
Coverage type: Spouse/family member active duty/retired;
Percentage of reservists: 6%.
Coverage type: School;
Percentage of reservists: 3%.
Note: Percentages total more than 100 because survey respondents were
allowed to choose as many options of coverage as applied.
[A] The survey did not define the ’other“ category.
Source: DOD‘s 2000 Survey of Reserve Component Personnel.
[End of figure]
Most Mobilized Reservists Maintain Civilian Coverage; Dropping It May
Result in TRICARE Problems:
Most reservists maintained their civilian coverage when mobilized.
Reservists generally maintained this coverage to better ensure
continuity of health benefits and care for their dependents, sometimes
at an additional cost. However, some reservists who dropped their
civilian insurance to use TRICARE reported that their dependents had
problems finding providers, establishing eligibility, understanding
TRICARE‘s benefits, and obtaining assistance when questions or problems
arose. We found that such problems could be ameliorated through
additional education and assistance targeted to reservists and their
dependents.
Few Mobilized Reservists‘ Dependents Experience Disruptions Because Most
Reservists Maintain Civilian Coverage, Some at Additional Cost:
Because most reservists maintained their civilian coverage when
mobilized, few dependents experienced disruptions in coverage.
According to DOD‘s 2000 survey, about 87 percent of reservists who had
been mobilized at least once reported having civilian insurance at the
time they were mobilized. The remaining 13 percent did not have civilian
coverage. Of those who had civilian coverage, about 90 percent
maintained it while mobilized.
According to DOD officials and reservists we interviewed, many
reservists maintained their civilian coverage to avoid disruptions
associated with a change to TRICARE and to ensure that their dependents
could continue seeing their current providers”who may not accept TRICARE
reimbursements, either as network providers or under the Standard
option. Preserving provider relationships was especially important to
reservists whose dependents with special needs had specialists familiar
with their care or to dependents who had long-standing relationships
with civilian providers.
Reservists we contacted reported varying financial arrangements for
covering the costs of their civilian premiums while they were
mobilized. [Footnote 25] USERRA does not require employers to continue
paying their share of health insurance premiums when mobilizations
extend beyond 30 days. However, employers continued to pay at least
their portion of health insurance premiums beyond this 30-day period
for about 80 percent of the reservists we contacted who maintained
their employer-sponsored coverage. Sometimes, these employers paid all
costs, both their own and the employee portion, while in other
instances reservists continued to pay the employee portion of the
premium. The remaining reservists paid the total insurance premium
while mobilized. In the general population in 2001, the average
employer-sponsored premium for a family plan was $588 per month with
the employee generally paying about 26 percent of this premium.
[Footnote 26]
Mobilized Reservists Who Dropped Their Civilian Insurance Sometimes
Experienced Problems with TRICARE:
Mobilized reservists who used TRICARE reported a variety of problems
that they and their dependents experienced when they tried to access the
system. [Footnote 27] However, when DOD provided information and
assistance targeted toward the situations reservists and their
dependents face, these types of problems were more likely to be
averted.
Reservists Reported Problems Moving into System:
The most common problems that reservists reported were difficulties they
and their dependents had moving into the system”finding TRICARE
providers, establishing eligibility, understanding TRICARE‘s benefits,
and obtaining assistance when questions or problems arose. While similar
problems have been reported by other active duty personnel, reservists
and their dependents are more likely to experience such problems
because they often live in areas distant from MTFs, and their active
duty service is brief and episodic.
Of the 360 reservists with recent mobilization experience that we
contacted, about 38 percent reported some kind of problem with
TRICARE. One problem, constituting about a quarter of the reported
problems, was finding a TRICARE provider. Mobilized reservists and their
dependents can have more difficulty finding TRICARE providers because
many do not live in areas where the network is robust. Compared to 5
percent of active duty personnel, about 70 percent of reservists live
and work more than 50 miles (or an hour‘s drive) from an MTF”areas DOD
has designated as remote. Because DOD‘s civilian contractors are
generally not required to establish TRICARE civilian networks in these
areas, a network of providers may not exist. Where networks do exist,
provider choice may be limited. [Footnote 28] TRICARE Prime Remote
(TPR) and TPR for Active Duty Family Members were established to help
improve access to care in remote areas for active duty and mobilized
reservists and their dependents. However, dependent eligibility is
statutorily based on residing with a service member who both lives and
works in a remote area. [Footnote 29] As a result, because mobilized
reservists are most often assigned to work in a location near an MTF or
deployed overseas, few dependents of reservists who are mobilized for
179 days or more are eligible for these programs.
About 17 percent of reported problems involved documenting and
establishing eligibility. For example, reservists had problems with DOD
not providing identification cards acknowledging that they and their
dependents were TRICARE beneficiaries. They also had difficulties with
the accuracy of information in the Defense Enrollment Eligibility
Reporting System (DEERS), [Footnote 30] DOD‘s database that maintains
benefit eligibility status. In order to ensure TRICARE eligibility, any
status changes must be reported to DEERS, and according to a DOD
civilian contractor, the services do not always send these changes to
DEERS promptly.
Reservists reported a variety of situations in which DEERS inaccuracies
created problems. DEERS did not reflect that some reservists were on
active duty; therefore, they and their dependents appeared to be
ineligible for services and were denied care or medications. Further,
in instances in which DEERS failed to reflect Prime enrollment for a
dependent, claims were paid under Extra, resulting in charges for
copayments that should not have been required. Also, mobilized
reservists married to active duty personnel reported problems ensuring
that DEERS accurately reflected their mobilized status so that they
were eligible for active duty, rather than dependent, benefits and
access privileges. Active duty families also have problems with DEERS,
but, according to a TRICARE adviser at one site we visited, DEERS
problems are accentuated for reservists because they move in and out of
the system. However, determining the extent of such DEERS problems was
beyond the scope of our work.
Finally, about 40 percent of the problems reservists reported related to
understanding TRICARE‘s benefits and obtaining assistance when
questions or problems arose. According to DOD officials, mobilized
reservists have greater difficulty understanding and navigating TRICARE
than other active duty personnel. First, reservists have less incentive
to become familiar with TRICARE because mobilizations are for a limited
period [Footnote 31] and because TRICARE only becomes important to them
and their dependents if they are mobilized. [Footnote 32] Further, when
first mobilized, reservists must accomplish many tasks in a compressed
period. For example, they must prepare for an extended absence from
home, make arrangements to be away from their civilian employment,
obtain military physical examinations, and ensure that their families
are registered in DEERS. DOD officials told us that learning about
TRICARE may be a low priority for reservists when they are mobilizing.
Targeted Education and Assistance Have Helped Minimize Some Reservists‘
and Dependents‘ TRICARE Problems:
According to interviews with reservists and support personnel at sites
we visited, problems with TRICARE could be reduced if education and
administrative assistance were available and information was targeted to
the needs of reservists. In addition, when beneficiaries, especially
reservists‘ dependents, were provided assistance with using the TRICARE
system”identifying contact points and understanding TRICARE benefits
and how to use them”they generally were able to obtain appropriate,
timely health care through TRICARE.
At one site we visited, assistance had been lacking or inadequate, and
reservists were experiencing numerous difficulties with TRICARE. Here,
1,100 personnel, who were mobilized beginning in late September 2001
under Operation Noble Eagle and Operation Enduring Freedom, initially
had no on-base MTF or TRICARE assistance. As a result, when questions
arose, these mobilized reservists and their dependents sometimes
obtained and passed along inaccurate information. In other instances
they contacted TRICARE‘s civilian contractor directly, sometimes
waiting for over an hour on hold trying to obtain information. In
November 2001, two administrative personnel were assigned, including a
health benefits expert, and at the time of our visit in February 2002,
progress was being made to resolve reservists‘ and their dependents‘
health care questions. However, because this assistance was initially
delayed, two staff members were insufficient to address the volume of
misinformation and problems that existed on site. Beneficiaries told us
they were still confused about TRICARE regulations at the time we
visited. Some mobilized reservists still did not understand that they
had to select a TRICARE primary care manager and were continuing to use
their non-network providers, even though regulations require active
duty personnel to participate in Prime. Likewise, their dependents were
continuing to have problems, such as determining whether they could
continue to see their civilian providers under TRICARE.
At another site we visited, which had an MTF and better on-base
assistance, we observed that reservists and their dependents generally
were not experiencing problems with TRICARE. In this location DOD had
a mobilization team on site to help explain the benefits and had a
staff on base to offer assistance when needed. To help ensure that
reservists and dependents understood the various TRICARE options, the
mobilization team presented general information on TRICARE and tailored
benefits discussions to beneficiaries‘ specific circumstances. For
example, the mobilization team tailored TRICARE information depending
on whether reservists‘ dependents lived in areas with established
networks or in areas where TRICARE networks were minimal or
nonexistent. For the latter, the mobilization team discussed how
TRICARE‘s Standard option could permit dependents to continue
relationships with civilian physicians by paying copayments similar to
those required by many civilian insurers. The mobilization team members
also referred reservists to TRICARE offices, Internet Web links, and
toll-free information lines, and provided backup telephone numbers,
including their own, to handle additional questions.
Alternative Coverage Options Presented in 2002 NDAA Vary Widely in
Cost:
The 2002 NDAA directed us to evaluate several health coverage options
through TRICARE, FEHBP, or civilian insurance as possible mechanisms
for ensuring continuity in benefits for reservists and their dependents.
Some of the options would provide coverage on a continuous basis during
the entire enlistment period, regardless of reservists‘ mobilization
status, while others would provide additional or alternative coverage
only during or following periods of mobilization. Cost estimates for
these options, which were provided by CBO, [Footnote 33] range from a
low of about $89 million to a high of about $19.7 billion over a 5-year
period. (See app. II for estimate assumptions.)
For 2003 through 2007, the estimated cost to DOD for providing
reservists and their dependents continuous health care coverage,
regardless of reservists‘ mobilization status, would range from about
$4 billion to $19.7 billion for the 5-year period, depending on how the
benefit was provided. CBO estimates that providing the benefit through
TRICARE with no premium for reservists would cost DOD about $10.4
billion. (See table 2.) DOD‘s cost would be reduced to about $7 billion
if reservists paid a premium similar to that paid by active duty
retirees under age 65 [Footnote 34] or to about $4 billion if
reservists paid a premium share similar to that paid by federal
employees for FEHBP. [Footnote 35]
Table 2: Costs to DOD of Providing Continuous Coverage under TRICARE:
Benefit option: TRICARE (no premium);
Option description: No premium for reservists;
Cost for 2006[A] (in billions): $2.8;
Total cost for 2003-2007 (in billions): $10.4.
Benefit option: TRICARE with cost-share similar to under age 65 active
duty retirees;
Option description: All reservists pay an annual premium of $230 for
individual coverage or $460 for family coverage;
Cost for 2006[A] (in billions): $1.9;
Total cost for 2003-2007 (in billions): $7.0.
Benefit option: TRICARE with premium similar to that of FEHBP[B];
Option description: Reservists (or their employers) would pay an annual
premium for TRICARE;
Cost for 2006[A] (in billions): $1.1;
Total cost for 2003-2007 (in billions): $4.0.
Note: The difference in the cost to DOD among the three types of
options is affected by both the percentage that reservists share in the
premium and the number of reservists expected to participate at that
level of premium sharing. See app. II for a discussion of these
assumptions.
[A] Based on costs for 2006 assuming all eligible beneficiaries who are
going to enroll in the program will actually be using the program.
[B] Federal employees are responsible for about 28 percent of health
insurance premium costs.
Sources: GAO analysis; cost estimates from CBO.
[End of table]
Providing insurance through FEHBP would be more expensive to DOD
because CBO estimated the premium would be based on the existing
FEHBP pool”an older population using more health care services. (See
table 3.) While CBO estimates that the actual cost of providing health
care for reservists and their dependents under FEHBP would be about
$10.9 billion, [Footnote 36] similar to the cost of providing the
TRICARE benefit, it estimates the DOD health insurance premium costs
for FEHBP to be about $19.7 billion. [Footnote 37] If reservists paid
the typical FEHBP employee portion of the premium, CBO estimates that
DOD premium costs would be reduced to about $10.2 billion. [Footnote
38]
Table 3: Costs to DOD of Providing Continuous Coverage under FEHBP:
Benefit option: FEHBP (no premium);
Option description: Cost to DOD for insurance (no premium for
reservists);
Cost for 2006[A] (in billions): $5.3;
Total cost for 2003-2007 (in billions): $19.7.
Benefit option: FEHBP (regular premium)[B];
Option description: Similar to current federal employees, reservists
would share in the costs of FEHBP for coverage;
Cost for 2006[A] (in billions): $2.8;
Total cost for 2003-2007 (in billions): $10.2.
Note: The difference in the cost to DOD between the no premium and
regular premium options is affected by both the percentage that
reservists share in the premium and the number of reservists expected
to participate at that level of premium sharing. See app. II for a
discussion of these assumptions.
[A] Based on costs for 2006 assuming all eligible beneficiaries who are
going to enroll in the program will actually be using the program.
[B] Federal employees are responsible for about 28 percent of health
insurance premium costs.
Sources: GAO analysis; cost estimates from CBO.
[End of table]
The cost for options providing health care coverage only during
mobilizations or for expanding the benefit after mobilizations would be
from $89 million to $1.8 billion over the 5-year period, according to
CBO estimates. (See table 4.) For example, in lieu of a TRICARE
benefit, DOD might assume the costs of reservists‘ civilian coverage
during mobilization. The value of this benefit would vary from
reservist to reservist depending on (1) the cost of the reservist‘s
portion of the premium, (2) the extent of employer coverage, and (3)
whether the employer continued to pay the premium during the
reservist‘s mobilization. CBO estimates that if each year 80,000
reservists, the approximate number mobilized in April 2002, were
mobilized for a 1-year period, the cost to fully pay for civilian health
coverage for the 5-year period would be about $1.8 billion. [Footnote
39] The cost of DOD allowing dependents with civilian insurance the
choice of TRICARE or a monetary voucher equivalent to the estimated
value of the TRICARE benefit would be about $1.1 billion over 5 years,
according to CBO‘s estimate. Although the amount of this voucher would
be based on the average cost of the TRICARE benefit for which the
dependent is eligible, this option would increase DOD‘s costs because
historically many dependents of mobilized reservists have relied on
their civilian coverage and have not used their TRICARE benefit.
Revising the transitional period that DOD has provided so that
demobilized reservists retain their TRICARE benefits for an additional
30 days and their dependents retain benefits for a 90-day period would
cost $89 million for the 5-year period, according to CBO‘s estimate.
Table 4: Costs to DOD of Providing Coverage during/following
Mobilizations:
Benefit option: During periods of mobilization only: Pay civilian
insurance;
Option description: Federal government pays the reservist‘s entire
civilian insurance premium, including employer and reservist
contributions;
Cost for 2006[A]: $394 million;
Total cost for 2003-2007: $1.8 billion.
Benefit option: During periods of mobilization only: Provide voucher for
civilian insurance;
Option description: Federal government provides reservists with
vouchers to assist in paying their civilian insurance in an amount
equal to the estimated cost of the TRICARE benefit coverage (for fiscal
year 2003, $126 individual and $431 family per month);
Cost for 2006[A]: $250 million;
Total cost for 2003-2007: $1.1 billion.
Benefit option: Following mobilizations: Extend/offer transition
period;
Option description: Extend transition benefits for reservists by 30
days and provide dependents a 90-day benefit;
Cost for 2006[A]: $19 million;
Total cost for 2003-2007: $89 million.
[A] Based on costs for 2006 assuming all eligible beneficiaries who are
going to enroll in the program will actually be using the program.
Sources: GAO analysis; cost estimates from CBO.
[End of table]
Conclusions:
Because most reservists have civilian insurance and maintain it while
mobilized, few of their dependents experience problems with disruptions
to their health care, such as being forced to change providers, learn
new health care plan requirements, and adjust to different benefit
packages. However, when using TRICARE some dependents of mobilized
reservists have experienced certain problems”in part, because they do
not adequately understand how the plan works.
Problems that reservists and their dependents face with health coverage
during mobilizations could be mitigated if DOD improved the information
and assistance provided them. Reservists are confronted with choices and
circumstances that are more complex than those faced by active duty
personnel. Their decisions about health care are affected by a variety
of factors”length of orders, where they and their dependents live,
whether they or their spouses have civilian health coverage, and the
amount of support civilian employers would be willing to provide with
health care premiums. In addition, reservists must determine whether
their existing civilian providers would be willing to accept TRICARE
while they are mobilized since their desire not to disrupt these
relationships during a temporary mobilization may outweigh other
considerations.
Recommendations for Executive Action:
We recommend that the Secretary of Defense direct the Assistant
Secretary of Defense for Health Affairs to:
* ensure that reservists, as part of their ongoing readiness training,
receive information and training on health care coverage available to
them and their dependents when mobilized and;
* provide TRICARE assistance during mobilizations targeted to the needs
of reservists and their dependents.
Agency Comments:
DOD reviewed and commented on a draft of this report. It concurred with
the report‘s recommendation and generally agreed with its findings. DOD
stated that it recognized the importance of a well-informed TRICARE
beneficiary population and to that end has already taken a number of
steps to ensure that reservists understand their health care benefits.
For example, the TRICARE Management Activity website and the Reserve
Affairs portion of the Department of Defense website provide information
about the health benefits available for reservists. Further, DOD stated
it will continue to emphasize the importance of health care education
and, as problem areas are identified, will immediately take steps to
correct them. DOD‘s comments are reprinted in appendix III.
DOD provided additional comments from the Department of the Army and
technical comments from the TRICARE Management Activity and from the
Office of the Assistant Secretary of Defense for Reserve Affairs. The
Army took exception to some of the information presented in the report
that was obtained from DOD‘s 2000 Survey of Reserve Component Personnel.
The Army stated that the number of reservists who continued to retain
their civilian health care coverage ’seems exceptionally high“ although
they could provide no basis to support this claim. Nevertheless,
because of their concern, we subsequently contacted DOD officials at
the Defense Manpower Data Center, who were responsible for the survey,
to reconfirm the information they provided. After we explained the
Army‘s position to them, they reaffirmed that the data from the survey
instrument were correct. They stated that for the period covered by
this survey prior to the 2001 partial mobilization there was no reason
to question the accuracy of the estimate. The Army also asked for other
analyses, such as a cost-benefit analysis of various TRICARE
demonstration programs that were beyond the scope of our work.
Technical corrections and clarifications have been incorporated into
the text as appropriate.
We are sending copies of this report to the Secretary of Defense,
appropriate congressional committees, and other interested parties.
Copies will also be made available to others on request. In addition,
the report is available at no charge on the GAO Web site at [hyperlink,
http://www.gao.gov]. If you or your staffs have any questions about this
report, please contact me at (202) 512-7101. Other contacts and major
contributors are listed in appendix IV.
Signed by:
Marjorie E. Kanof:
Director, Health Care”Clinical and Military Health Care Issues:
Congressional Committees:
The Honorable Carl Levin:
Chairman:
The Honorable John Warner:
Ranking Minority Member:
Committee on Armed Services:
United States Senate:
The Honorable Daniel K. Inouye:
Chairman:
The Honorable Ted Stevens:
Ranking Minority Member:
Subcommittee on Defense:
Committee on Appropriations:
United States Senate:
The Honorable Bob Stump:
Chairman:
The Honorable Ike Skelton:
Ranking Minority Member:
Committee on Armed Services:
House of Representatives:
The Honorable Jerry Lewis:
Chairman:
The Honorable John P. Murtha:
Ranking Minority Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives:
[End of section]
Appendix I: Scope and Methodology:
To determine whether reservists had health coverage when not on active
duty and the source of any civilian coverage, we obtained analyses from
the Department of Defense‘s (DOD) 2000 Survey of Reserve Component
Personnel. [Footnote 40] Although all survey questions had not been
analyzed, we obtained information from DOD on selected questions for
which survey processing had been completed. Because DOD had not yet
completed processing for all questions, we were unable to obtain a more
thorough DOD analysis or to obtain data for our own analyses. Using the
analyses DOD provided, we were able to do limited checks for
consistency of results, but, for the most part, we were not able to
verify the accuracy of DOD‘s data.
To learn about the type of civilian health care coverage reservists and
their dependents have and the extent to which mobilizations caused
disruptions in coverage, we obtained information from 286 mobilized, or
recently mobilized, reservists from three judgmentally selected reserve
units”representing the Army, Navy, and Air Force. We selected these
units with the help of DOD personnel using two criteria: (1) the unit
consisted of at least 50 reservists and (2) at the time of our audit
work, the unit was mobilized or had recently completed a mobilization
and was drilling. We visited these sites and administered a
questionnaire to identify the types and volume of problems that
reservists and their dependents were experiencing with health care
coverage. Sometimes we used the questionnaire as a structured interview
guide and administered it to individuals; more frequently, reservists
completed the questionnaires in a group and spoke with us individually
afterwards if they had issues they wanted to discuss. During these
visits, we also interviewed unit commanders, personnel responsible for
mobilization activities, TRICARE personnel, and medical staff, when
available.
We also used our questionnaire as a guide in conducting a telephone
survey of an additional 74 reservists or their family members.
[Footnote 2] We obtained a randomized list of reservists who had been
mobilized during the period July 2000 through December 2001, along with
the sampled reservists‘ home addresses and telephone numbers, from
DOD‘s Defense Manpower Data Center. We first excluded from the sample
those reservists whose records lacked both addresses and telephone
numbers; then proceeded in order from the first name on the list,
either calling the telephone number provided or attempting to locate a
telephone number using the name and address. When we were not able to
obtain a telephone number or when the telephone number given to us had
been disconnected or was determined to be inaccurate, we also excluded
that reservist. Of 100 reservists whom we were able to contact or leave
messages for, we ultimately completed an interview with 74 reservists
or family members. The remaining 26 reservists either did not return
our calls or refused to participate in our survey.
Finally, we interviewed officials in the offices of the Assistant
Secretary of Defense for Reserve Affairs and the Assistant Secretary of
Defense for Health Affairs; the TRICARE Management Activity; the
National Guard Bureau; the Department of Labor; [Footnote 42]
representatives of the Army, Navy, and Air Force Reserve Components;
and reservist advocacy groups, including the Enlisted Association of
the National Guard of the United States, the National Guard Association
of the United States, the National Military Family Association, the
Ohio Air National Guard, the Reserve Officers Association, the Retired
Officers Association, and the Retired Enlisted Association. We also
reviewed our prior work on reservists and military health care.
The Congressional Budget Office (CBO) calculated costs associated with
options specified in the 2002 NDAA for providing coverage for
reservists. [Footnote 43] We did not independently verify data used to
calculate the cost estimates. See appendix II for CBO‘s assumptions.
[End of section]
Appendix II: CBO‘s Assumptions for Cost Estimates:
In calculating the cost estimates specified in the National Defense
Authorized Act for FY 2002 for providing health care coverage to
reservists, [Footnote 44] CBO used the following basic assumptions:
[Footnote 45]:
* The estimates were based on 865,000 reservists, unless otherwise
indicated.
* The benefit would start on January 2003.
* The percentage of the reserve force with dependents is 50.42.
* Reservists with dependents each have about 2.17 dependents.
* Inflation would be 8.5 percent in 2003, 7.5 percent in 2004, and 6.5
percent in the remaining years.
* The 14 percent of reservists who were federal employees were excluded
from the estimates because they presumably have health insurance
coverage under Employees Health Benefits Program (FEHBP). The specific
assumptions used to develop each benefit option are discussed below.
Options for Continuous Coverage under TRICARE (Shown in Table 2):
TRICARE (no premium):
* Ninety percent of reservists would take advantage of this option.
* Reservists and their dependents would use TRICARE-approved civilian
physicians with little use of military treatment facilities (MTF).
* TRICARE costs were weighted from FEHBP costs, assuming that
reservists cost about 40 percent of the FEHBP premium and families cost
about 60 percent.
* TRICARE costs were estimated at $1,513 for a single reservist and
$5,173 for a family during 2003.
* Costs of TRICARE Prime and TRICARE Standard are the same.
* Some beneficiaries would use TRICARE as a second payer insurance. (The
14 percent of reservists who presumably were enrolled in FEHBP was used
as a proxy for this purpose.)
* Second payer costs were 25 percent of the regular TRICARE costs.
* Reservists will enroll over 3-year phase-in period.
TRICARE with premium similar to under 65 active duty retirees:
* Premium consists of $230 per year for individuals and $460 per year
for families.
* Seventy percent of reservists would enroll in TRICARE under these
conditions.
* Reservists and their dependents would use TRICARE-approved civilian
physicians with little use of MTFs.
* TRICARE costs were weighted from FEHBP costs, assuming that
reservists would cost about 40 percent of the FEHBP premium and
families would cost about 60 percent of the FEHBP premium.
* TRICARE costs were estimated at $1,513 for an individual and $5,173
for a family during 2003.
* Costs of TRICARE Prime and TRICARE Standard are the same.
* No second payer costs exist.
* Reservists will enroll over 3-year phase-in period.
TRICARE with premium-share equal to that of FEHBP:
* Reservists would pay 28 percent of premium costs, which is similar to
the percentage of FEHBP premiums paid by civilian federal employees.
* Fifty percent of reservists would enroll in TRICARE under these
conditions.
* Reservists and their dependents would use TRICARE-approved civilian
physicians with little use of MTFs.
* TRICARE costs were weighted from FEHBP costs, assuming that
reservists cost about 40 percent of the FEHBP premium and families cost
about 60 percent.
* Cost for an individual would be $1,513 and cost for a family would be
$5,173 during 2003.
* Costs of TRICARE Prime and TRICARE Standard are the same.
* No second-payer costs exist.
* Reservists will enroll over 3-year phase-in period.
Options for Continuous Coverage under FEHBP (Shown in Table 3):
FEHBP (no premium):
* Ninety percent of reservists would enroll in this program.
* DOD would pay the employee‘s share of the premium for the 14 percent
of reservists who presumably were enrolled in FEHBP.
* Blue Cross/Blue Shield and Kaiser Permanente premiums were used to
calculate costs.
* The estimated average annual cost was $3,760 for individuals and
$8,718 for families during 2003.
* Reservists will enroll over 3-year phase-in period.
FEHBP (regular premium):
* Seventy percent of reservists would enroll in FEHBP if they had to
pay the employee‘s share of the premium.
* No cost was included for the 14 percent of reservists who presumably
are enrolled in FEHBP.
* Average premiums for individuals and families were based on data
provided by FEHBP actuaries.
* During 2003, the estimated cost for an individual would be $3,670 with
DOD paying about 71 percent, and cost for a family would be $8,635 with
DOD paying about 73 percent.
* Reservists will enroll over 3-year phase-in period.
Options during Mobilizations (Shown in Table 4):
Pay civilian insurance:
* Costs are based on 80,000 reservists”the approximate number mobilized
in April 2002.
* No cost was included for the 14 percent of reservists who presumably
are enrolled in FEHBP.
* Ninety percent of reservists would enroll in the program.
* Average cost of employee premium and employer‘s share were based on
Kaiser Family Foundation data.
* During 2003, cost for an individual would be $2,877 with DOD paying 86
percent, and cost for a family would be $7,656 with DOD paying 74
percent.
* There is no phase-in period.
Provide voucher for civilian insurance:
* Costs are based on 80,000 reservists”the approximate number mobilized
in April 2002.
* Voucher could be used to pay for any current health insurance
coverage, including both employee‘s and employer‘s share.
* FEHBP enrollees would not receive vouchers.
* Ninety percent of reservists would use vouchers.
* Voucher costs were based on 2003 estimated TRICARE costs of $1,513 for
individuals and $5,173 for families. (TRICARE costs were weighted from
FEHBP costs, assuming reservists would cost about 40 percent of the
FEHBP premium and families would cost about 60 percent.)
* Voucher may not be used to cover the cost of paying second payer
insurance”only covers primary insurance.
* There is no phase-in period.
Option following Mobilizations (Shown in Table 4):
Extend/Offer transition period following demobilization:
* Costs are based on 80,000 reservists” the approximate number mobilized
in April 2002.
* Forty percent of demobilized reservists would use this option.
* No cost was included for the 14 percent of reservists who presumably
were enrolled in FEHBP.
* Reservists would use TRICARE-approved civilian physicians with little
use of MTFs.
* TRICARE costs were weighted from FEHBP costs (assuming reservists
would cost about 40 percent of the FEHBP premium and families would
cost about 60 percent of the FEHBP premium).
* All reservists were eligible regardless of existing insurance
coverage.
* Benefit for reservist is only 30 days since the first 60 days are
currently covered.
* Dependents would be covered for 90 days.
* There is no phase-in period.
[End of section]
Appendix III: Comments from the Department of Defense:
The Assistant Secretary Of Defense:
Health Affairs:
Washington, D.C. 20301-1200:
August 23, 2002:
Marjorie E. Kanof, MD, Director:
Health Care-Clinical and Military Health Care Issues:
U.S. General Accounting Office:
Washington, DC 20548:
Dear Dr. Kanof:
This is the Department of Defense (DoD) response to the General
Accounting Office (GAO) draft report GAO-02-829, "DEFENSE HEALTH CARE:
Most Reservists Have Civilian Health Coverage But More Assistance
Needed When TRICARE Is Used," dated July 9, 2002 (GAO Code 290151).
The Department concurs with the GAO recommendation, and a response to
the recommendation is enclosed (Enclosure 1). The TRICARE Management
Activity has also made several technical change suggestions which are
enclosed (Enclosure 2). Several general comments from the Department of
the Army and from the Office of the Assistant Secretary of Defense
(Reserve Affairs) are also enclosed (Enclosures 3 and 4).
Sincerely,
Signed by:
William Winkenwerder, Jr., MD:
Enclosures: As stated:
Appendix IV: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Deborah L. Edwards, (202) 512-7101:
Lois L. Shoemaker, (404) 679-1806:
Staff Acknowledgments:
In addition to those named above, the following staff members made key
contributions to this report: Aditi Archer, Richard Wade, Julianna
Williams, Mary W. Reich, and Karen Sloan.
[End of section]
Footnotes:
[1] The armed forces reserve components consist of the Air Force
Reserve, the Air National Guard, the Army Reserve, the Army National
Guard, the Navy Reserve, the Marine Corps Reserve, and the Coast Guard
Reserve. National Guard components carry out a dual mission. They are
responsive both to the federal government for the national security
mission and to governors for state missions.
[2] Mobilization is the process by which the armed forces are brought
into a state of readiness for war or national emergency or to support
some other operational mission. In this report, mobilization means
calling up reserve components for active duty.
[3] When a governor mobilizes the state‘s National Guard under state
authorities, the personnel and their dependents are not eligible for
federal TRICARE benefits. However, the state may provide health
coverage for them during this period. The benefits discussed in this
report apply to the men and women of the National Guard when they are
called up by the federal government.
[4] Pub. L. No. 107-107, § 721, 107 Stat. 1012, 1167 (2001).
[5] The survey was administered to a generalizable sample of 74,487
Selected Reserves. Selected Reserves are those reservists who are most
likely to be among the first to be mobilized. The term ’reservists“ in
this report will be used to refer to Selected Reserves.
[6] These reservists agreed to meet with us during site visits to an
Air Force and a Navy site where reservists were currently mobilized and
to an Army unit that had recently completed a mobilization and, at the
time of our audit, was conducting its regular weekend drill.
[7] In the absence of specific legislative language, CBO‘s estimates
should be considered preliminary. Final CBO estimates would reflect
actual legislative language and CBO‘s then current baseline
assumptions.
[8] These data represent mobilizations and may overstate the number of
unique reservists mobilized since some reservists may have been
mobilized more than once during this period. The numbers do not include
those who have served voluntarily.
[9] In the event Congress declares war or a national emergency,
reservists could be mobilized for 6 months longer than the war or
emergency.
[10] According to an Office of Reserve Affairs official, mobilization
orders for these operations were for periods of 180 days to 1 year.
[11] From fiscal years 1996 through 2001, only Selected Reserves were
involuntarily mobilized. However, about 2 percent of reservists
mobilized for operations Noble Eagle and Enduring Freedom were
Individual Ready Reserves, a manpower pool comprised principally of
individuals with previous training, with active duty service or service
in the Selected Reserves, and with a period of their military
obligation remaining.
[12] 50 U.S.C. App. §§ 501-593 (2000). National guardsmen mobilized by
a governor under state authorities are not eligible for SSCRA
protection.
[13] 38 U.S.C. §§ 4301-4333 (2000).
[14] The reservist‘s individual insurance premium may be increased
during this period, but only if it would have increased had the
coverage been uninterrupted by mobilization.
[15] Preexisting conditions that are service connected are excluded
from coverage. For example, individual policies would not have to cover
battle injuries, which are covered by the Department of Veterans
Affairs.
[16] For deployments of 31 days or more, USERRA permits the employer to
assess an additional 2 percent administrative fee if reservists elect
to continue with civilian insurance and pay the full premium, including
the employer share.
[17] When the employer elects to continue mobilized reservists‘ health
insurance, the reservist may continue to be liable for the employee
portion of the premium. However, some employers pay the full premium.
[18] Reservists ordered to inactive duty training or active duty for
less than 31 days are entitled to medical care for any injury, illness,
or disease that they might incur or aggravate in the line of duty.
[19] For dependents‘ prescriptions filled by MTFs, no copayment
applies; for prescriptions filled by DOD‘s mail order pharmacy or
network pharmacies, a $3 to $9 copayment applies. For prescriptions
filled by non-network pharmacies, copayments are the greater of $9 or 20
percent of total prescription costs.
[20] Pub. L. No. 106-65 §§ 714, 716, 113 Stat. 512, 689, 690-1 (1999)
(codified at 10 U.S.C. §§ 1095d and 1097b (2000)) and Pub. L. No. 106-
398, § 721, 114 Stat. 1654, 1654A-184 (2000).
[21] DOD uses a fee schedule based on Medicare rates as the maximum
amount that it will pay civilian physicians. However, non-network
physicians are allowed to charge patients an additional fee up to 15
percent above the fee schedule rate.
[22] In response to the loss of family member transitional benefits,
DOD published notice in the June 12, 2002, Federal Register of a
demonstration program that extends transitional benefits to dependents
retroactive to January 1, 2002.
[23] DOD categorizes enlisted personnel as E-1 to E-9, with E-1 to E-4
considered junior enlisted and E-5 to E-9 senior enlisted. The average
age of junior enlisted ranges from 19.9 years for E-1 personnel to 27.8
years for E-4; the average age of senior enlisted ranges from 34.4
years for E-5 to 49.8 for E-9. The average age for officers is 40
years.
[24] In the general population, about 73 percent of 18 to 24 year olds
and 79 percent of 25 to 34 year olds had health insurance in 2000.
[25] DOD‘s survey data do not provide information on how reservists who
maintained their civilian insurance financed this civilian health
care”that is, how much, if any, of the full premium they were required
to pay”nor do the data provide information on whether the coverage was
under the reservists‘ or family members‘ policies. Of the reservists we
interviewed, 9 percent maintained coverage through spouses‘ employer-
sponsored health plans.
[26] The Kaiser Family Foundation and Health Research and Educational
Trust, Employer Health Benefits 2001 Annual Survey (Menlo Park, Calif.,
and Chicago, Ill.: 2001).
[27] In cases where reservists are mobilized to locations distant from
MTFs, they must obtain health care through TRICARE network providers
and, thus, share many of the same problems dependents experience.
[28] We reviewed DOD‘s networks and found them to be generally adequate
with spotty deficiencies in rural areas”particularly those that are
considered medically underserved and those with low managed care
penetration. U.S. General Accounting Office, Military Health Care:
TRICARE‘s Civilian Provider Networks, GAO/HEHS-00-64R (Washington,
D.C.: Mar. 13, 2000).
[29] Pub. L. No. 106-398 § 722(b), 114 Stat. 1654, 1654A-185 (2000).
[30] Reservists are required to report changes in address, marital
status, number of dependents, and other personal data and to ensure
that this information is correct in DEERS.
[31] From 1996 through 2001 the average length of mobilizations was 117
days.
[32] At the time of DOD‘s 2000 survey, about 75 percent of reservists
reported never having been mobilized.
[33] In the absence of specific legislative language, CBO‘s estimates
should be considered preliminary. Final CBO estimates would reflect
actual legislative language and CBO‘s then current baseline
assumptions.
[34] Active duty retirees under age 65 and their dependents must pay an
annual premium of $230 per individual or $460 per family to enroll in
Prime. Active duty personnel and their dependents have no premium
requirements.
[35] Federal employees are responsible for about 28 percent of FEHBP
premium costs. The difference in the cost to DOD of the no-premium
option versus the premium option is affected by both the percentage
that reservists share in the premium and the number of reservists
expected to participate at that level of premium sharing. See app. II
for a discussion of these assumptions.
[36] Costs of care are based on the FEHBP (no premium) share option.
[37] Some reductions to rates might occur over time as a result of
adding reservists and their dependents to the FEHBP pool, but these
adjustments are not reflected in these estimates.
[38] The difference in the cost to DOD between the two types of premium
options is affected by both the percentage that reservists share in the
premium and the number of reservists expected to participate at that
level of premium sharing. See app. II for a discussion of these
assumptions.
[39] As of April 2002, about 80,000 reservists were mobilized. If
50,000 were mobilized, the estimated cost for the 5-year period would
be $1.1 billion. If 150,000 were mobilized, the cost would be $3.3
billion.
[40] The survey was administered in October 2000 to a generalizable
sample of 74,487 Selected Reserves. Selected Reserves are those
reservists who are most likely to be among the first to be mobilized.
[41] If we were unable to contact the reservist and a spouse or other
dependent was able to supply the information we needed, we interviewed
the spouse or the dependent. This was the case in 28 of the 74
interviews.
[42] We interviewed Department of Labor personnel to obtain information
on the Uniformed Services Employment and Reemployment Rights Act of
1994 (USERRA) and the Soldiers‘ and Sailors‘ Civil Relief Act of 1940
(SSCRA).
[43] In the absence of specific legislative language, CBO‘s estimates
should be considered preliminary. Final CBO estimates would reflect
actual legislative language and CBO‘s then-current baseline
assumptions.
[44] As in other places in this report, the term ’reservists“ refers to
Selected Reserves.
[45] In the absence of specific legislative language, CBO‘s estimates
should be considered preliminary. Final CBO estimates would reflect
actual legislative language and CBO‘s then current baseline
assumptions.
[End of section]
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