Proposed Co-pay Hike for Military Families Stirs Debate

by Amanda Conschafter, blog editor

When Congress resumes session in September, it must also resume negotiations on a tense topic—raising co-pay limits for veterans and military families relying on Tricare health coverage. The proposed increase has stalled passage of the National Defense Authorization Act, which legislators had hoped to finalize before August recess.

The Senate version of the bill includes co-pay increases for brand-name and non-formulary medications.  If approved, the measure would nearly double co-pays over 10 years. The increase would be the third hike in the last four years for military families and veterans.

In a memorandum to the House of Representatives regarding negotiations on the topic, Rep. Mac Thornberry (R-TX) explained, “The House is unwilling to accept 100 percent of the proposed increases first and foremost because the House believes it must keep faith with our military retirees and their families and that we should seek to make other improvements in Tricare before digging more deeply into the pockets of our servicemembers and retirees.” The House version of the bill proposes to reduce government expenses instead by piloting a “preferred pharmacies” program.

Meanwhile, the Department of Health and Human Services announced earlier this year a plan to increase out-of-pocket maximums for civilian health plans—increasing individual limits from $6,600 to $6,850 and increasing family limits from $13,200 to $13,700. The annual limits include deductibles, co-payments and co-insurance payments. After an individual or family meets the limit, health plans provide (with some exceptions) full coverage for the 10 essential health benefits defined by the Affordable Care Act.

The department has also announced a change in interpretation of the health care law that requires full coverage to commence once a patient reaches the individual out-of-pocket limit, even if he or she is covered by a family plan. This prevents a single person from having to meet a family deductible before receiving full coverage. The decision could make out-of-pocket expenses more manageable for patients, though it has left employers scrambling in anticipation of increased costs. Earlier this month, members of Congress submitted a letter questioning HHS’ authority to make such a decision.

Congress aims to finalize the National Defense Authorization Act before October 1, the start of the new government fiscal year. Revised out-of-pocket limits for employer and exchange plans apply to policies beginning in 2016.

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