# 99068. DoD Seeks Funds for Seniors' Health Care Commitment

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By Douglas J. Gillert

American Forces Press Service

WASHINGTON -- The Defense Department wants to make sure all 

people eligible for health benefits get the care they need, 

including those over age 65, a senior health official said here 

Feb. 2. 

Speaking at the 1999 TRICARE Conference, Mary Gerwin said DoD is 

committed to providing health care to all eligible retired 

service members and their families, but it has to find a way to 

fund the care. She said the group represents the fastest growing 

segment of the DoD beneficiary population, and DoD is looking at 

several options for their health care.

"The number of retirees is growing disproportionately to active 

duty," said Gerwin, a senior adviser to DoD health chief Dr. Sue 

Bailey and former staff director of the Senate Committee on 

Aging. She said there are 1.3 million military retirees over age 

65 today and the number will rise to 1.6 million by 2005. Since 

1994, over-65 retirees have increased 5 percent while the active 

duty population has decreased 12 percent, she said. 

Federal statutes prohibit staffing military hospitals to treat 

patients 65 and older, who also are eligible for Medicare 

benefits. Military treatment facilities can only provide over-

65s with space-available health care. Even as the over-65 

population is rising, however, space-available care has been 

shrinking due to base closures and reduced clinic and hospital 

capacity.

Compounding cost issues, most retirees living close to military 

facilities depend on space-available care and don't have 

separate health insurance, Gerwin said. "They benefit from the 

free prescription drugs, even when they don't use the military 

treatment facility for their primary care," she said. Medicare 

doesn't cover outpatient drugs.

The department currently is looking at several ways to deliver 

care to its elderly population. These include a three-year 

demonstration of Medicare Subvention in six geographical 

locations; Medicare will reimburse participating military 

hospitals that enroll over-65 patients in TRICARE Senior Prime. 

About 22,000 seniors enrolled to take part in the test.

"We will be able to use Medicare reimbursement to leverage and 

expand care we deliver to over-65s," Gerwin said. However, she 

said, some seniors may not want to enroll because the 

demonstration will last just three years. If DoD doesn't adopt 

the plan, retirees would have to pay higher premiums to rejoin 

Medicare Plan B.

Retirees also can enroll in Medicare health maintenance 

organizations rather than risk losing temporary military health 

benefits, she said. DoD has matched the benefits offered by 

Medicare HMOs. "Once we get them in, we're hooked for all their 

Medicare-based care," Gerwin said. "We have to be able to 

deliver these benefits" -- home care, for example.

DoD recently announced a second demonstration at eight sites. Up 

to 66,000 over-65 retirees and eligible family members will be 

allowed to enroll in the Federal Employees Health Benefits Plan. 

The Office of Personnel Management will negotiate with the plans 

and carriers, and enrollees will receive information this 

summer, Gerwin said. 

Two other demonstrations beginning Jan. 1, 2000, will begin 

supplemental TRICARE coverage at two sites and will expand 

pharmacy benefits to retirees over 65 in selected areas, 

including use of a national mail order pharmacy.

Each of these programs comes at a cost, Gerwin said, with the 

FEHBP option being the most expensive at $1.4 billion to $1.6 

billion a year. Estimated annual costs are up to $300 million 

for the pharmacy plan and $600 million for the TRICARE 

supplement, she said. The figures are based on estimates of 

participation rates and a cost analysis provided by CNA Corp., 

which has done other studies of DoD health care programs.

Gerwin said she doesn't think DoD can expect more money from 

Congress, but it would, instead, need "a major pull down in our 

system" to pay for something as costly as the federal employees 

plan. She said the costs of the pharmacy benefit could mean 

larger co-pays for name-brand drugs and higher charges to other 

beneficiaries. "Or Congress could just put us in the OPM 

budget."

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