Ten years ago, as a single, healthy, adventurous twenty-something finishing up law school, none of the benefits offered to military members and their families factored into my decision to join the Army. I joined to serve my country and for the exciting legal career opportunities. I stay because I enjoy it, take pride in it, and now more than ever I understand the value of the benefits, especially health care.
If, despite your job satisfaction and competence, you come to think civilian life would be a better fit for you and your family, you should probably go into the Reserves. The reason is simple: the military benefits are worth it. Most of us are tracking the benefits available to us and our families by virtue of our service, including the G.I. Bill, Tuition Assistance, subsidized child care, military pension, Thrift Savings Plan, life insurance, and installation services such as military commissaries, exchanges, and fitness centers. The value of our health care benefit, TRICARE, can be hard to quantify, but it is one of the most valuable military benefits.
Overview of TRICARE Plans
Mandatory for active duty service members and optional for their family members, TRICARE Prime is a health maintenance organization (HMO)-like program. Health care is managed by an assigned primary care manager and provided by military or civilian network providers.1 On 1 January 2018, TRICARE Select replaced TRICARE Standard and TRICARE Extra. TRICARE Select is a preferred provider organization (PPO) that allows eligible beneficiaries to choose their own TRICARE-authorized providers and manage their own health care.2 It allows enrollees to go to any doctor or hospital that accepts TRICARE Select insurance without a referral. There are additional TRICARE plans that, for example, offer coverage to active duty families in remote U.S. locations and overseas, to qualified National Guard and Reserve members, and to qualified adult children of eligible sponsors.3
Overview of TRICARE Costs
For active duty service members and their family members enrolled in TRICARE Prime, there is no annual enrollment fee, no monthly premiums, no deductible, and no out-of-pocket costs for covered services.4 For retirees and their families, the yearly enrollment fee is $289.08 per individual or $578.16 per family;5 there is no annual deductible or monthly premiums; and out-of-pocket costs entail between $20 and $30 per outpatient primary, specialty, or urgent care visit, $60 per emergency room visit, and $150 per inpatient admission.6 Allowing more freedom of choice in providers and being available to all non-active duty beneficiaries, TRICARE Select costs are higher than Prime. Currently there is no annual enrollment fee or monthly premiums for active duty family members, but there is an annual deductible ranging between $50 and $300 depending on: the sponsor’s pay grade, whether it is individual or family coverage, and whether the service member entered the military before or after January 1, 2018.7 Out-of-pocket costs range from $15 to $31 for primary, specialty, or urgent care visits to in-network providers, $40 to $81 for in-network emergency room visits, and $18 per day or up to $60 per admission for in-network hospitalizations.8 For retirees and their families, the costs are moderately higher.9 Under both TRICARE Prime and TRICARE Select, there is a $1,000 catastrophic cap for active duty family members and $3,000 to $3,500 cap for retirees and their families, meaning that is the most the family will pay for covered health care services each calendar year.10 Active duty service members have no prescription drug costs when using a military pharmacy, TRICARE Pharmacy Home Delivery, or a TRICARE retail network pharmacy.11 Pharmacy costs for all others range from $0 to $53, not including non-network pharmacies.12
Comparison of Military Health Benefit to Civilian Health Care Benefit
Premiums, deductibles, and out-of-pocket costs are the main components of the health care benefit. A 2017 Kaiser Family Foundation (KFF) and Health Research & Educational Trust (HRET) survey of private and non-federal public employers provides some insight into the value of our TRICARE benefit. The Defense Health Agency (DHA)’s Evaluation of the TRICARE Program: Fiscal Year 2017 Report to Congress also provides some information on military health care costs compared to the average private health insurance plan.
As noted above, whether enrolled in TRICARE Prime or TRICARE Select, active duty service members, retirees, and their families pay no monthly premiums. Note that retirees and their families do pay a $578 annual enrollment fee for family coverage under TRICARE Prime, and under TRICARE Select, those who joined the military after 1 January 2018 will have an annual enrollment fee of $900 per family.13 DHA’s 2017 Evaluation of the TRICARE Program found that from FY 2003 to FY 2016, the average private health insurance family premium increased substantially, whereas the TRICARE Prime enrollment fee declined slightly.14 During this time period, 29.8% of retirees switched from private health insurance to TRICARE, mostly because of increasing costs with private health insurance and some because of loss of coverage.15 The 2017 KFF/HRET survey found that private and non-federal employees paid an average of $5,714 toward family coverage annual premiums.16 Premiums for employer-provided family health care plans have increased nineteen percent since 2012 and fifty-five percent since 2007.17 The lack of premiums with TRICARE Prime and Select, as well as the no cost or low cost annual enrollment fees (especially for families with service members who joined the military prior to 1 January 2018) are a significant value compared to the consistently rising premiums in the civilian sector.
While enrollees in TRICARE Prime pay no deductibles and those in TRICARE Select may pay up to $300, the 2017 KFF/HRET survey found that the average deductible amounts for private-sector workers enrolled in family coverage were $2,732 for HMOs, $2,503 for PPOs, $2,697 for point-of-service plans, and $4,527 for high-deductible plans with a savings option.18 Again, huge value for TRICARE Prime and Select enrollees.
The majority of health plans require cost-sharing such as a copayment (a fixed dollar amount) or coinsurance (a percentage of the covered amount) in addition to any annual deductible.19 Among plans with copayments, the 2017 KFF/HRET survey found that the average was $25 for primary care office visits, $38 for specialty care office visits, and $336 per hospital admission.20 Copayments for prescription drugs ranged from $11 to $110.21 Note that the majority of plans with annual deductibles cover primary care visits and prescription drugs before the annual deductible is met.22 As outlined in the TRICARE Costs overview above, there are no copayments or coinsurance for active duty service members and families enrolled in TRICARE Prime, and retirees enrolled in Prime, as well as all TRICARE Select enrollees have copayment or coinsurance costs fairly comparable to those found in the 2017 KFF/HRET survey.
Total Out-of-Pocket Costs
Compared to active duty service members who have no out-of-pocket costs, active duty family members who have a $1,000 out-of-pocket/catastrophic cap, and retirees and their families who have a $3,000-$3,500 out-of-pocket/catastrophic cap, the 2017 KFF/HRET survey found that fifty-seven percent of workers are in health plans with an annual out-of-pocket maximum for single coverage of more than $3,000 and eighteen percent have an out-of-pocket maximum of $6,000 or more.23 Complex out-of-pocket structures made it difficult for the KFF/HRET survey to accurately capture specific data in this area.24 The DHA’s 2017 Evaluation of the TRICARE Program found that in FY 2016, out-of-pocket costs for civilian counterparts under age sixty-five were $5,500 more than those incurred by active duty families enrolled in TRICARE Prime and $4,800 more than those incurred by retiree families enrolled in Prime.25
Additional TRICARE Value Considerations
While the comparisons above provide some useful data on how much money you may save with TRICARE health care coverage compared to what you could expect to pay with another employer-provided health plan, you may wonder if there is a more precise calculation of the value. Two additional comparison options are what you and your family would expect to pay under the Continued Health Care Benefit Program (CHCBP) and what health insurance would cost you on the Health Insurance Marketplace (healthcare.gov) exchange.26
Continued Health Care Benefit Program
The CHCBP is a premium-based health care program managed by Humana Military that offers continued health coverage for up to 18 months (or 36 months in select circumstances) after TRICARE eligibility ends, acting as a bridge between military health benefits and a new civilian health plan.27 It provides the same coverage as TRICARE Select.28 The CHCBP premium for family coverage is currently $3,210 per quarter, amounting to $12,840 per year.29 In addition to these premiums, there are yearly deductibles and cost-shares, the amounts based on the status of the sponsor at the time of enrollment and type of provider seen.30 The annual deductible for family coverage is $300, and copayments for doctor visits, emergency room visits, and hospitalization are the same as for retirees enrolled in TRICARE Select.31
Health Insurance Marketplace
Operated by the federal government for most states, HealthCare.gov is the Health Insurance Marketplace that helps people shop for and enroll in affordable health insurance.32 Upon providing income and household information through the HealthCare.gov website, various health care plans are offered for purchase: the Bronze category of plans has the lowest monthly premiums but higher deductibles and copayments; the Silver category has higher monthly premiums than Bronze but lower deductibles and copayments; and the Gold category has the highest premiums but lowest deductibles and copayments.33 Consider the example of a single income, thirty-something, married couple with two young children living in Virginia, with $70,000 annual income. One spouse is eligible for health insurance through his employer but checks the Health Insurance Marketplace for better options. HealthCare.gov estimates that this family would qualify for a $1,725 credit on premiums each month. With this credit taken into account, they are offered Bronze plans with an average premium of $29 per month, average deductible of $13,200, and average out-of-pocket maximum of $13,900 with $25 copayments for generic drugs and $40 to $60 copayments after the deductible for doctor visits; Silver plans with an average premium of $500 per month, average deductible of $7,450, and average out-of-pocket maximum of $12,950 with $25 copayment for generic drugs after the deductible and $30 to $60 copayments for doctor visits; or a Gold plan with a premium of $1,538 per month, deductible of $3,000, and out-of-pocket maximum of $14,700 with $25 copayments for generic drugs and $35 to $65 copayments for doctor visits. If neither spouse were eligible for health insurance through an employer, the marketplace estimates the family would qualify for a higher credit on the premiums, amounting to a monthly premium of less than $9 on a Bronze plan, but the rest of the numbers in each of the plan options remain similar. Though individual family medical situations would dictate the value of these insurance plans, in general, they appear to be very expensive options.
Reserve Component TRICARE Options
So you decide to get out and are considering your health insurance options. Maybe you are fortunate enough to find an amazing new employer that offers a plan as good as TRICARE, or maybe you are fortunate enough to get such a high-paying job that expensive health care is a non-issue for you. But many of you will face sticker shock when you see your new health insurance costs in the civilian world. The highly valuable military benefits—namely the pension and health care coverage—should make you strongly consider not taking off your uniform completely.34 While activated National Guard and Reserve members and their families are eligible for active duty TRICARE benefits up to 180 days before and during their activations, even non-activated members and their families are eligible for TRICARE benefits.35 TRICARE Reserve Select may be purchased by members of the Selected Reserve36 who are not in an activated status.37 It is a premium-based health plan with coverage similar to TRICARE Select for active duty family members.38 The monthly premiums have remained relatively stable over the past few years, $47.82 for individual coverage and $217.51 for family coverage in Calendar Year 2017.39 The annual deductible and out-of-pocket costs are the same as for active duty family members enrolled in TRICARE Select.40 Upon retirement, additional insurance options include TRICARE Retired Reserve, TRICARE Prime, and TRICARE for Life.41
Quality of Military Health Care
Most of you, like me, have probably appreciated the access to free health care, not having to worry whether a doctor or hospital visit was worth the cost, and knowing that you would receive any treatment needed without any financial hardship. It is even worth the headache of dealing with referrals and inefficient scheduling and medical advice lines. One significant concern, however, is with the quality of care which seems to vary greatly across Military Treatment Facilities.
TRICARE beneficiaries are overall more satisfied with their health care plans than civilians in private-sector health plans, likely due to the broad coverage of benefits and low out-of-pocket costs.42 However, the military has underperformed in regard to health outcomes and functioning of the health care delivery system.43 Survey results for access measures (such as getting an appointment with a specialist and getting care quickly), as well as for quality measures (such as primary care physician and specialty care physician) fall short of civilian benchmarks.44 The Military Health System has consistently had higher than expected rates of harm and complications in maternity care and surgery.45 Statistics show that babies born at military hospitals are twice as likely to be injured during delivery as newborns nationwide, and their mothers are more likely to hemorrhage after childbirth than mothers at civilian hospitals.46 According to a review from the American College of Surgeons, in surgeries, half of the military’s largest hospitals performed worse than established benchmarks in categories including infections and improperly done procedures.47 While this is certainly disturbing, it is encouraging that the Military Health System is currently moving forward initiating its most significant changes in decades.48 Lawmakers have recently begun incorporating comprehensive recommendations from respected groups of experts to reform the Military Health System in order to better support the readiness of medical providers, delivery higher quality services, and achieve a more efficient system.49
The Future of Military Health Care
The design of the Military Health System and aspects of the military health care benefit have attracted intense scrutiny recently, and for the first time in many years, lawmakers have initiated major changes to military health care.50 While changes involving delivery, quality, and efficiency of services have been enacted, lawmakers have not supported recommendations involving substantial changes to the TRICARE benefit.51 While changes were recently implemented to modestly increase TRICARE fees for future retirees, changes to the TRICARE benefit design and costs for beneficiaries are very controversial, and thus unlikely to be enacted in any manner to substantially affect current military members.52
Although not without its faults, TRICARE likely offers the best health care coverage available. The broad coverage and low or no cost for active duty service members and their families would be very hard to beat. Even service members and their families in the Reserve Component are offered TRICARE plans that appear to be better deals than much of what may be available in the private sector. And by staying active duty or by going into the Reserves, you can maintain your eligibility for TRICARE coverage upon retirement, which has become increasingly valued and utilized by retirees in recent years. So whatever your reasons are for staying in the Army so far, think hard about the benefits before leaving, including TRICARE, which may be the most valuable benefit of them all. TAL
MAJ Grimm is the Chief of National Security Law for the 8th Theater Sustainment Command in Fort Shafter, Hawaii.
1. Comparing TRICARE Prime and TRICARE Select, Health.mil (Mar. 26, 2018), https://health.mil/News/Articles/2018/03/26/Comparing-TRICARE-Prime-and-TRICARE-Select.
3. Humana Military, https://www.humanamilitary.com/beneficiary/plans-and-programs.
4. TRICARE Costs and Fees Sheet 2018, TRICARE, https://www.tricare.mil/costs [hereinafter TRICARE Costs and Fees 2018].
5. The enrollment fee is twenty-one percent higher for retirees who enter the military after 1 January 2018. Id.
9. See id.
14. Def. Health Agency, Evaluation of the TRICARE Program: Fiscal Year 2017 Report to Congress (2017) at 170, https://health.mil/Reference-Center/Reports/2017/06/08/Evaluation-of-the-TRICARE-Program [hereinafter DHA Evaluation Report 2017].
16. The Kaiser Family Foundation, The Kaiser Family Foundation and Health Research & Educational Trust Employer Health Benefits 2017 Annual Survey, https://www.kff.org/report-section/ehbs-2017-section-1-cost-of-health-insurance/ [hereinafter Kaiser Family Survey 2017]
17. Id. at 4.
18. Id. figure 7.21.
19. Id. at 8.
21. Id. figure. 9.6.
22. Id. at 117.
23. Kaiser Family Survey 2017, supra note 16.
24. Id. at 127.
25. DHA Evaluation Report 2017, supra note 14, at 171.
26. Doug Nordman, How Much Is Your Military Pay Really Worth?, The Military Guide (Mar. 2, 2017), https://the-military-guide.com/much-military-pay-really-worth/.
27. TRICARE Choices in the United States Handbook, Mar. 2018, at 12, https://TRICARE.mil/-/media/Files/TRICARE/Publications/Handbooks/Choices_HB.ashx; https://TRICARE.mil/chcbp.
28. Continued Health Care Benefit Program, TRICARE, https://www.TRICARE.mil/Plans/SpecialPrograms/CHCBP.
29. Continued Health Care Benefit Program (CHCBP), Humana Military, https://www.humanamilitary.com/chcbp.
31. TRICARE Costs and Fees 2018, supra note 4.
32. Health Insurance Marketplace, HealthCare.gov, https://www.healthcare.gov/glossary/health-insurance-marketplace-glossary/.
33. See2018 health insurance plans & prices, HealthCare.gov, https://www.healthcare.gov/see-plans/.
34. Seegoarmy.com, https://www.goarmy.com/reserve/prior-service.html#/benefits for information on all the benefits with transitioning from active duty to the U.S. Army Reserves.
35. TRICARE Choices for National Guard and Reserve Handbook (2018), at 5, https://tricare.mil/publications [hereinafter Guard and Reserve Handbook 2018].
36. The Selected Reserve is one category of the Ready Reserve. Members of the Selected Reserve are generally required to perform one weekend of training each month and two weeks of training each year. https://fas.org/sgp/crs/natsec/IF10540.pdf.
37. Guard and Reserve Handbook 2018, supra note 35, at 6.
39. DHA Evaluation Report 2017, supra note 14, at 138, https://health.mil/Reference-Center/Reports/2017/06/08/Evaluation-of-the-TRICARE-Program.
40. TRICARE Costs and Fees 2018, supra note 4.
41. See Guard and Reserve Handbook 2018, supra note 35, at 5, 10–11.
42. Bipartisan Policy Center, Health, Health Care, and a High-Performance Force (2017), https://bipartisanpolicy.org/wp-content/uploads/2017/03/BPC-Defense-Health-Care.pdf [hereinafter Health Care and High Performance 2017].
45. Sharon LaFraniere & Andrew W. Lehren, In Military Care, a Pattern of Errors but Not Scrutiny, N.Y. Times (June 28, 2014), https://www.nytimes.com/2014/06/29/us/in-military-care-a-pattern-of-errors-but-not-scrutiny.html.
48. SeeMilitary Health System Reform, Military Officers Association of America (Apr. 21 2017), http://www.moaa.org/Content/Take-Action/Top-Issues/Currently-Serving/Military-Health-System-Reform.aspx.
49. Health Care and High Performance 2017, supra note 42.