Mandatory Spending
Function 550 - Health
Introduce Minimum Out-of-Pocket Requirements Under TRICARE for Life
CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.
| Billions of dollars | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2015-2019 | 2015-2024 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Change in Mandatory Outlays | ||||||||||||||
| MERHCF | 0 | 0 | -1.2 | -2.0 | -2.2 | -2.4 | -2.5 | -2.7 | -2.9 | -3.0 | -5.4 | -18.9 | ||
| Medicare | 0 | 0 | -0.4 | -0.9 | -1.1 | -1.2 | -1.2 | -1.3 | -1.4 | -1.5 | -2.4 | -9.0 | ||
| Total | 0 | 0 | -1.6 | -2.9 | -3.3 | -3.5 | -3.8 | -4.0 | -4.3 | -4.5 | -7.8 | -27.9 | ||
Notes: This option would take effect in January 2017. Estimates are relative to CBO’s August 2014 baseline projections.
MERHCF = Department of Defense Medicare-Eligible Retiree Health Care Fund.
TRICARE for Life (TFL) is a supplement to Medicare for military retirees and their family members who are eligible for Medicare. The program pays nearly all medical costs not covered by Medicare and requires few out-of-pocket fees. This option would introduce minimum out-of-pocket requirements for TFL beneficiaries. For calendar year 2017, TFL would not cover any of the first $650 of an enrollee’s cost-sharing payments under Medicare and would cover only 50 percent of the next $5,850 in such payments. Those dollar limits would be indexed to growth in average Medicare costs (excluding Part D drug benefits) for later years. This option also would require TFL beneficiaries seeking care from military treatment facilities to make payments that would be roughly comparable to the charges they would face at civilian facilities.