Some of the 12 recommendations of the Task Force on the Future of Military Health Care can be implemented by the Department of Defense, but the increased pass-along fees and higher deductibles would have to be approved by Congress. In the past, Congress has balked at sharply increasing fees and authorized the task force’s creation to assess the military’s health care system. In its 2008 resolutions, the Association of the United States Army has called for no increases in fees and deductibles and no erosion of pharmacy and quality-of-care benefits.

Speaking to reporters at the Pentagon the day the report was released, Gordon England, deputy secretary of defense, said the 14-member task formed a year ago was “challenged to provide an assessment of and recommendations for sustaining our military health care services, and that’s for our military members, for their families and for our retirees.”

Among the recommendations that emerged after more than 15 sessions with affected groups would be changing enrollment fees for the under-65 retirees to restore the cost-sharing relationships that existed when TRICARE was started in 1995. This would mean a charge of $100 a month on the average for these retirees, defense officials said. For TRICARE Standard there is a recommendation to create an enrollment fee and raise the deductibles. Another recommendation calls for a $10 a month enrollment fee for retirees in the TRICARE for Life programs.

The increases would be phased in over four years.

“This is the best course of action for the future of military health care,” Gen. John Corley, USAF, co-chair of the task force, said, and added the panel did not see the increases as excessive because they have not been changed since TRICARE was established. He added the report adhered to the guiding principles that created the task force. “I’m a military member, so my first focus is on readiness of the force, not just today, but in the future as well.”

The principles were to maintain or improve the health of military forces and allow its practitioners to provide operational health care worldwide; to maintain or improve the quality and productivity of care; and to improve military health care efficiency by adopting best practices in the private sector.

Defense officials said that at the time TRICARE was started the government’s share was 91 percent of the cost and the beneficiary’s share was 9 percent.

Gail Wilensky, co-chair and who also served on the Dole-Shalala panel, said at the Pentagon press conference that in looking at the standard and prime programs, “It’s the worse of fragmented health care that you can have, and it is, we believe, frequently occurring in conjunction with the use of another insurance system, which again exacerbates both the spending and less-than-ideal quality of health care because you have two completely independent, unrelated groups, systems, providing health care.”

Directly affecting active duty families is the proposed changes in the pharmacy benefit. “We believe that using tiers and co-payment structures can increase the use of preferred medications and increase the use of the most cost-effective points of services,” she said.

For example, costs for formulary medications for retail and mail would rise from the current $9 to $25 for retail and $15 for mail. For those brands not in the formulary the costs for retail and mail would rise from $22 to $45.

The recommendations also call for annual indexing for inflation. Wilensky said the task force favored this because it did not want to find the military health care system in the same position as it is in now 10 to 15 years in the future.

“We think it is important that there be additional collaboration with other payers on best practices – other departments within the government, such as the VA and Health and Human Services, but also partnering with private payers as well, making sure that we are aligned in the Department of Defense to make cost and quality more transparent, to strengthen incentives and to systematically use strategies of pilots and demonstrations in order to further these results and then, importantly, to evaluate the results that occur,” she said.

When asked whether the recommendations were designed to move people from TRICARE to health care plans offered by employers, Wilensky said, the task force was trying “to find a way to encourage individuals to choose a single health care plan.”

Like health care costs in the private sector, TRICARE costs are rising. The defense health care budget for Fiscal Year 2007 was $39 billion. Some government estimates for 2015 put military health care costs at $64 billion or 12 percent of the defense budget.