28 January 2013 Legislative News Update 


Legislative News is AUSA Government Affairs Directorate's
weekly electronic newsletter, and is published
every Monday when Congress is in session.

In this issue:

  • Army Chief of Staff: "National Security at Risk"
  • Changes Coming to TRICARE Prime Services Areas
  • New Legislation Spotlight
  • Pharmacy Prices Headed Up



Along with top Army leaders and members of the defense industry, key congressional staff members heard a sobering message from the Army Chief of Staff at AUSA’s Institute of Land Warfare Breakfast last week.  

Gen. Raymond Odierno’s message was clear - our national security is at risk because of the fiscal uncertainty that we face today.  The numbers are sobering - a $6 billion shortfall for FY 13 in Army operation and maintenance accounts because Congress has failed to pass appropriations legislation and the Army must spend at the FY 12 budget levels.  If sequestration triggers on March 1, another $6 billion shortfall will occur.  Combined with other underfunding, the total shortfall for FY 13 could be $17 billion – in wartime! 

Gen. Odierno outlined the steps the Army is taking to remain effective while dealing with the lack of funding – cancelling combat training center rotations, delaying depot work and cancelation of maintenance for vehicles that are not bound immediately for the current fight, freezing civilian hiring, potential furloughing of existing employees and laying off temporary workers.  The bottom line is that training and therefore readiness will suffer.  He described the endstrength reductions to 490,000 that will occur and said that if sequestration triggers, the numbers could dip further. 

Odierno told the audience that what the Army needs most is some budget predictability through several years so that endstrength, modernization and readiness can be carefully balanced and a hollow force avoided. 

Here at AUSA through a series of letters, we have been urging Congress to solve the sequestration puzzle now and have highlighted the significant dangers posed by sequestration and the repeated use of continuing resolutions to fund our Department of Defense. You can click here to read our letters on the subject, and you can add your voice to ours by clicking here, and click on the letter titled “Stop Sequestration Now”.

Unfortunately the military-related headlines in major newspapers today focus on side issues that serve only to take the eyes of the American people off of the key issue – the fiscal process must be put back in order so that our defense forces can maintain readiness and their ability to defend this nation.  Add your voice to ours and urge Congress to ACT NOW – our national security hangs in the balance.


Defense Department health officials announced that effective 1 Oct., TRICARE Prime will no longer be available to beneficiaries living in certain areas in the United States.  

Prime service areas were created to ensure medical readiness of the active duty force by augmenting the capability and capacity of military hospitals and clinics.  The affected locations are not close to existing military hospitals or clinics and have never augmented care around military hospitals or clinics or Base Realignment and Closure locations.

The plan to reduce prime service areas is not new.  It originated in 2007 when the Pentagon solicited proposals for the next generation of TRICARE contracts.  However, complications with the new contracts caused a delay in transition.  Accordingly, Defense officials determined that existing prime service areas be kept in place until all regions could fully transition to the new contract requirements.

In a news release, Pentagon officials said that if you live in an area affected by the changes, you will receive a letter that will include information about your TRICARE health care options as well as how to get more information.  Your TRICARE Prime benefit will remain available through the end of September as long as enrollment fees are paid, you do not disenroll early or lose eligibility.

Even if TRICARE Prime is no longer available where you live, you will still be able to use the TRICARE Standard and Extra options which have no enrollment fees.  Both offer the freedom to see any TRICARE-authorized provider for routine or specialty care.  An assigned primary care manager is not required, and cost shares for a wide range of preventive medical services have been eliminated.  With TRICARE Extra, you choose hospitals and providers within the TRICARE network, where available, and pay a lower cost share.

The news release outlined how different groups of beneficiaries may be affected:

* Active duty service members, including activated National Guard and Reserve members, will not be affected by prime service area reductions.  They will remain enrolled in TRICARE Prime or TRICARE Prime Remote, as appropriate.  Active duty family members enrolled in TRICARE Prime in affected areas will remain in TRICARE Prime as long as they are in the same location and eligible.  As always, active duty family members also have the option of using the TRICARE Standard and Extra health plan option. 

* Retirees and their family members enrolled in TRICARE Prime in the affected areas may be able to reenroll in TRICARE Prime at a military hospital or clinic or with a primary care manager in a remaining prime service area.  A new enrollment form will be required with an acknowledgment that the beneficiary is waiving their drive-time standards.  Beneficiaries should be aware that waiving drive-time standards may require them to drive long distances for primary and specialty care.  Those who do not reenroll in TRICARE Prime can use TRICARE Standard and Extra.  

* If you are a surviving spouse of a deceased active duty service member, how your coverage may change depends on your survivor status.  “Transitional survivors” (first three years following sponsor’s death) will remain in TRICARE Prime as long as they continue to live in the same location and remain eligible for TRICARE.  

* After three years, surviving spouses are no longer considered a transitional survivor and their current TRICARE Prime enrollment will end, but they may be able to reenroll in TRICARE Prime at a military hospital or clinic or with a network primary care manager in a remaining prime service area by waiving TRICARE Prime access standards.  If they do not reenroll in TRICARE Prime, you can use the TRICARE Standard and Extra health plan option.  

* Surviving children are always considered “transitional survivors.”  They are treated like active duty family members and can remain enrolled in TRICARE Prime (as long as they continue to live in the same location) until they otherwise lose eligibility for TRICARE. 

* Young adults whose sponsors are active duty service members will not be affected. Other young adults with TRICARE Young Adult (TYA) Prime in the affected areas may be able to waive their drive-time standards and fill out a new enrollment form.  Those who do not reenroll in TYA Prime can purchase coverage under TYA Standard, which is $152 monthly, compared with $176 for TYA Prime. 

* Affected beneficiaries may also have the option to enroll in the US Family Health Plan, a TRICARE Prime managed care option available through networks of not-for-profit health care systems in six areas of the United States. 

* Those who already use TRICARE for Life, TRICARE Reserve Select, TRICARE Retired Reserve, or TRICARE Standard and Extra will not be affected.

The Defense Department estimates that of the approximately 1.6 million retirees and family members currently in Prime, 171,000 will be affected.  They also estimate that the change will save the government $45-$56 million a year.


Two bills that address concurrent receipt have been introduced in the House.

Rep. Sanford Bishop, D-Ga., introduced H.R. 333, The Disabled Veterans Tax Termination Act, legislation that would permit retired members of the Armed Forces who have a service-connected disability rated less than 50 percent to receive concurrent payment of both retired pay and veterans' disability compensation.  The bill would also eliminate the phase-in period for concurrent receipt and extend eligibility for concurrent receipt to chapter 61 disability retirees with less than 20 years of service.  

Introduced by Rep. Gus Bilirakis, R-Fla., H.R. 303 would permit additional retired members of the Armed Forces who have a service-connected disability to receive both disability compensation from the Department of Veterans Affairs for their disability and either retired pay by reason of their years of military service or Combat-Related Special Compensation.  It would also eliminate the phase-in period under current law with respect to such concurrent receipt.

AUSA strongly supports both of these measures and thanks Reps. Bishop and Bilirakis for introducing them.


The fiscal 2013 National Defense Authorization Act included a provision that allowed an increase in co-pays for prescriptions drugs covered by TRICARE.  The new co-pays will be effective on 1 Feb.

There is no increase to co-pays for generic medications.  It will remain at $5 when the prescription is filled at a network pharmacy.  There is also no co-pay when generic prescriptions are filled through TRICARE’s home delivery service.  The new co-pay for a 30-day supply of a brand name medication purchased at a retail network pharmacy will be $17, up from the current $12.  Beneficiaries using TRICARE’s home delivery service will pay $13 for brand name drugs, up from $9.  However, that price is for a 90-day supply. 

The greatest change in co-pays applies to non-formulary medications.  The $25 co-pay for these drugs increases to $44 at retail pharmacies and $43 through Home Delivery. 

For fiscal 2014 and beyond, the new law directs that co-pays increase annually by the same percentage as retiree cost-of-living adjustments.  In years when a COLA increase would total less than a dollar, it will be delayed a year and combined with the next adjustment so increases will always be $1 or more.

Pharmacies at military hospitals and clinics will continue to provide medications with no co-pays.  

While the Defense Department had requested much higher co-pays, Congress disagreed.  However, they included a requirement that all TRICARE-For-Life beneficiaries will be required to have all of their maintenance drugs refilled, for at least a year, through the home delivery program or at base pharmacies.  This effort has not started yet.  AUSA will keep you informed as TRICARE rolls outs its education program.