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TRICARE pharmacy fees will increase in FY 2013

Wednesday, August 01, 2012

Changes ahead for TRICARE pharmacy beneficiaries. One way or another TRICARE pharmacy fees are going to increase starting in Fiscal Year 2013. By how much they will increase in FY 2013, and how much they will increase in the out-years is the question.

The defense budget for Fiscal Year 2013 called for co-pays for a 30-day supply of brand name drugs in the retail network to climb from $12 to $26 until reaching $34 in Fiscal Year 2017.

Co-pays for brand name drugs obtained by mail order, now $9 for a 90-day supply, also would climb to $26 and rise steadily to $34 by 2017. Generic drugs obtained from retail would remain unchanged at $5.

The DoD proposal would also block retail outlets from dispensing "third tier" drugs, those deemed too expensive to be on the military formulary of more than 5,000 drugs. There are 179 such drugs now on the third tier.

In its version of the Fiscal Year 2013 Defense Authorization Bill, the House rejected the defense proposal and instead came up with an alternative plan.

The bill includes a more moderate increase in TRICARE pharmacy co-pays in 2013 and a cap on pharmacy co-pays beginning in 2014 that would allow fees to rise by no more than the annual retiree cost-of-living allowance (COLA).

The legislation would also leave the co-pay for generic drugs at retail outlets at $5.

Co-pays at retail stores would be raised from $12 to $17 for brand names on the military formulary and from $17 to $44 for non-formulary brand names.

For mail order, the current $9 co-pay for 90 days of brand drugs on formulary would be raised to $13, and the $25 co-pay for non-formulary drugs would increase to $43. Prescriptions filled at military treatment facilities would remain free.

The chart found on Page 22 shows the differences in the plans.

To pay for the difference in the DoD proposal and its version, the House established a five-year pilot program that would require TRICARE for Life (TFL) beneficiaries to obtain refills of maintenance drugs through the TRICARE Mail-order Program.

However there are loopholes to the requirement: Beneficiaries would be allowed to drop the program after a yearlong trial period and waivers would be allowed under certain circumstances.

The Senate’s version of the defense authorization bill is silent on the pharmacy issue. Their silence means that the Defense Department could proceed with its plan.

While AUSA does not believe that pharmacy co-pays should increase at all, we realize that they will effective October 2012, the beginning of the new fiscal year.

Therefore, we recognize that the House plan is the best deal we can get for our members.

Forget the dramatically higher co-pays the DoD proposal would implement in October, for 2017 and beyond, co-pays would be adjusted yearly to match medical inflation.

Again, the House bill limits co-pay adjustments to no more than percentage increase in military retirement.

What’s next for Congress: The full Senate still has to vote on their version of the Fiscal Year 2013 Authorization Bill.

Senate Armed Services Committee Chairman Carl Levin, D-Mich., anticipates that the bill will go the Senate floor sometime before the August recess. After that, representatives from the two chambers will meet in conference to iron out any differences.

What’s next for AUSA: We will push very hard for the Senate to recede to the House and adopt their version of the authorization bill with respect to the pharmacy fees.

Once the Senate has passed its bill and we see exactly what’s in it, then our campaign will begin.

You can be sure you will hear much more about this!

New Legislation spotlight. Sen. Jack Reed, D-R.I., has introduced legislation that would strengthen protections for military members and their families under the Servicemembers Civil Relief Act (SCRA).

The Servicemember Housing Protection Act (S. 3179) would help military families in three ways by:

Allowing a family to terminate a lease without financial penalty when government housing becomes available. The bill would permit a service member to terminate a lease agreement under the SCRA in situations where on-post housing suddenly opens up.

Enabling military families to gain SCRA protections with a letter from a commanding officer. There have been many cases in recent years where service members are activated prior to the issuance of formal orders.

S.3179 would apply the broader definition of military orders, allowing for commanding officer letters in all sections of the SCRA in which a service member is required to submit copies of military orders.

This change will make it easier for service members to more quickly get their affairs in order prior to deployment.

Extending the nine-month window of foreclosure protections to surviving spouses. After suffering such an unspeakable loss, a military spouse should not have the additional burden of dealing with the potential of a mortgage foreclosure.

AUSA and its partners in The Military Coalition support Reed’s legislation.