I

106TH CONGRESS

1ST SESSION H. R. 1067

To amend title 10, United States Code, to improve the access to military

treatment facilities for retired members of the uniformed services, and

their dependents, who are over 65 years of age, to provide for Medicare

reimbursement for health care services provided to such persons, and

to permit such persons to enroll in the Federal Employees Health Benefits program.

IN THE HOUSE OF REPRESENTATIVES

MARCH 10, 1999

Mr. THORNBERRY introduced the following bill; which was referred to the

Committee on Ways and Means, and in addition to the Committees on

Commerce, Armed Services, and Government Reform, for a period to be

subsequently determined by the Speaker, in each case for consideration

of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To amend title 10, United States Code, to improve the

access to military treatment facilities for retired members

of the uniformed services, and their dependents, who

are over 65 years of age, to provide for Medicare reimbursement for health care services provided to such persons, and to permit such persons to enroll in the Federal

Employees Health Benefits program.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

2 (a) SHORT TITLE.—This Act may be cited as the

3 ‘‘Uniformed Services Retiree and Dependents Health Care

4 Availability Act’’.

5 (b) TABLE OF CONTENTS.—The table of contents of

6 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—ENROLLMENT OF RETIREES IN TRICARE PRIME AND

MEDICARE REIMBURSEMENT

Sec. 101. Definitions.

Sec. 102. Availability of TRICARE-prime for Medicare-eligible uniformed services retirees.

Sec. 103. Medicare reimbursement.

Sec. 104. Determination of reimbursement amounts.

Sec. 105. Maintenance of defense health care effort.

Sec. 106. Department of Defense payment of late enrollment penalty under

Medicare.

Sec. 107. Medigap special open enrollment period for certain uniformed services

retirees and dependents.

TITLE II—FEHBP OPTION FOR RETIREES

Sec. 201. Inclusion of Medicare-eligible uniformed services retirees in Federal

Employees Health Benefits program.

Sec. 202. Improved benefits under CHAMPUS and TRICARE standard.

7 TITLE I—ENROLLMENT OF RE8 TIREES IN TRICARE PRIME

9 AND MEDICARE REIMBURSE10 MENT

11 SEC. 101. DEFINITIONS.

12 For purposes of this title:

13 (1) MEDICARE-ELIGIBLE UNIFORMED SERVICES

14 RETIREE.—The term ‘‘Medicare-eligible uniformed

15 services retiree’’ means a member or former member

16 of a uniformed service who is entitled to retired pay
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1 or retainer pay (or equivalent pay), or a dependent

2 covered by section 1076(b) of title 10, United States

3 Code, who is entitled to hospital insurance benefits

4 under part A of title XVIII of the Social Security

5 Act (42 U.S.C. 1395c et seq.).

6 (2) TRICARE PROGRAM.—The term

7 ‘‘TRICARE program’’ means the managed health

8 care program that is established by the Secretary of

9 Defense under the authority of chapter 55 of title

10 10, United States Code, principally section 1097 of

11 such title, and includes the competitive selection of

12 contractors to financially underwrite the delivery of

13 health care services under the Civilian Health and

14 Medical Program of the Uniformed Services.

15 (3) SUBVENTION PROGRAM.—The term ‘‘sub16 vention program’’ means the program established

17 under section 103 to reimburse the Department of

18 Defense, from the Medicare program under title

19 XVIII of the Social Security Act (42 U.S.C. 1395 et

20 seq.), for health care services provided to Medicare21 eligible uniformed services retirees through the

22 TRICARE program.

23 (4) DEPENDENT.—The term ‘‘dependent’’ has

24 the meaning given the term in section 1072(2) of

25 title 10, United States Code.
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1 (5) SECRETARIES.—The term ‘‘Secretaries’’

2 means the Secretary of Defense and the Secretary of

3 Health and Human Services acting jointly.

4 SEC. 102. AVAILABILITY OF TRICARE-PRIME FOR MEDI5 CARE-ELIGIBLE UNIFORMED SERVICES RE6 TIREES.

7 The Secretary of Defense may not prohibit the enroll8 ment of Medicare-eligible uniformed services retirees in

9 the managed care option of the TRICARE program

10 (known as TRICARE prime) solely on account of age or

11 the entitlement of such persons to hospital insurance bene12 fits under part A of title XVIII of the Social Security Act

13 (42 U.S.C. 1395c et seq.).

14 SEC. 103. MEDICARE REIMBURSEMENT.

15 (a) REIMBURSEMENT REQUIRED.—To increase the

16 number of Medicare-eligible uniformed services retirees

17 able to enroll in the managed care option of the TRICARE

18 program, the Secretary of Defense and the Secretary of

19 Health and Human Services shall jointly establish a pro20 gram to provide the Department of Defense with reim21 bursement, beginning October 1, 2000, from the Medicare

22 program under title XVIII of the Social Security Act (42

23 U.S.C. 1395 et seq.) for health care services provided to

24 Medicare-eligible uniformed services retirees through the

25 TRICARE program. Reimbursement will only be provided
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1 in the case of Medicare-eligible uniformed services retirees

2 who are also enrolled in the supplementary medical insur3 ance program under part B of title XVIII of the Social

4 Security Act (42 U.S.C. 1395j et seq.).

5 (b) VOLUNTARY ENROLLMENT.—For purposes of the

6 subvention program, enrollment of Medicare-eligible uni7 formed services retirees in an option of the TRICARE pro8 gram shall be voluntary, except that the total number of

9 Medicare-eligible uniformed services retirees so enrolled

10 shall be subject to the capacity and funding limitations

11 specified in sections 104 and 105.

12 (c) EFFECT OF ENROLLMENT.—In the case of a

13 Medicare-eligible uniformed services retiree who enrolls in

14 an option of the TRICARE program, payments may not

15 be made under title XVIII of the Social Security Act (42

16 U.S.C. 1395 et seq.) other than under the subvention pro17 gram for health care services provided through the

18 TRICARE program, except that the Secretaries may pro19 vide exceptions for emergencies or other situations as the

20 Secretaries consider appropriate.

21 (d) TRICARE PROGRAM ENROLLMENT FEE WAIV22 ER.—The Secretary of Defense shall waive the enrollment

23 fee applicable to any Medicare-eligible uniformed services

24 retiree enrolled in the managed care option of the
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1 TRICARE program for whom reimbursement may be

2 made under section 104.

3 (e) MODIFICATION OF TRICARE CONTRACTS.—In

4 carrying out the subvention program, the Secretary of De5 fense may amend existing TRICARE program contracts

6 as may be necessary to incorporate provisions specifically

7 applicable to Medicare-eligible uniformed services retirees

8 who enroll in an option of the TRICARE program.

9 (f) COST SHARING.—The Secretary of Defense may

10 establish cost sharing requirements for Medicare-eligible

11 uniformed services retirees who enroll in an option of the

12 TRICARE program and for whom reimbursement may be

13 made under section 104.

14 SEC. 104. DETERMINATION OF REIMBURSEMENT AMOUNTS.

15 (a) REIMBURSEMENT OF DEPARTMENT OF DE16 FENSE.—Beginning October 1, 2000, monthly payments

17 to the Department of Defense under the subvention pro18 gram shall be made from the Medicare program under title

19 XVIII of the Social Security Act (42 U.S.C. 1395 et seq.)

20 on the basis that payments are made under section

21 1876(a) of the Act (42 U.S.C. 1395mm(a)).

22 (b) AMOUNT OF PAYMENTS.—The Secretary of

23 Health and Human Services shall make payments to the

24 Department of Defense from the Federal Hospital Insur25 ance Trust Fund and the Federal Supplementary Medical
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1 Insurance Trust Fund (allocated by the Secretary of

2 Health and Human Services between each trust fund

3 based on the relative weight that each trust fund contrib4 utes to the required payment) at a per capita rate equal

5 to 93 percent of the applicable adjusted average per capita

6 cost for each Medicare-eligible uniformed services retiree

7 enrolled in the TRICARE program in excess of the num8 ber of such uniformed services retirees calculated under

9 section 105 for the Department of Defense maintenance

10 of health care effort.

11 SEC. 105. MAINTENANCE OF DEFENSE HEALTH CARE EF12 FORT.

13 (a) MAINTENANCE OF EFFORT REQUIRED.—The

14 Secretary of Defense shall maintain the Department of

15 Defense health care efforts for Medicare-eligible uni16 formed services retirees so as to avoid imposing on the

17 Medicare program those costs that the Department of De18 fense would be expected to incur to provide health care

19 services to Medicare-eligible uniformed services retirees in

20 the absence of the subvention program.

21 (b) ESTIMATE OF PRIOR EFFORT.—For the first fis22 cal year of the subvention program, the Secretaries shall

23 estimate the amount expended by the Department of De24 fense for fiscal year 2000 for providing health care items

25 and services (other than pharmaceuticals provided to out-
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1 patients) to Medicare-eligible uniformed services retirees.

2 For subsequent fiscal years, the amount so estimated shall

3 be adjusted for inflation, for differences between estimated

4 and actual amounts expended, and for major changes in

5 the Department of Defense health care budget.

6 (c) TARGET FOR DEFENSE EFFORT.—On the basis

7 of the estimate made under subsection (b), the Secretaries

8 shall establish monthly targets of the number of Medicare9 eligible uniformed services retirees for whom reimburse10 ment will not be provided to the Department of Defense

11 under section 104.

12 (d) PROTECTION OF MEDICARE PROGRAM AGAINST

13 INCREASED COSTS.—

14 (1) PURPOSE.—The purpose of this subsection

15 is to protect the Medicare program against costs in16 curred under section 104 in connection with the pro17 vision of health care services to Medicare-eligible

18 uniformed services retirees that would not have been

19 incurred by the Medicare program in the absence of

20 the reimbursement requirement.

21 (2) REVIEW BY COMPTROLLER GENERAL.—Not

22 later than December 31 of each year, the Comptrol23 ler General shall determine and submit to the Sec24 retaries and Congress a report on the extent, if any,

25 to which the costs of the Secretary of Defense under
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1 the TRICARE program and the costs of the Sec2 retary of Health and Human Services under the

3 Medicare program have increased as a result of the

4 subvention program.

5 (3) ACTIONS TO PREVENT INCREASED COSTS.—

6 If the Secretaries determine that the trust funds

7 under title XVIII of the Social Security Act (42

8 U.S.C. 1395 et seq.) still incur excess costs as a re9 sult of the subvention program, the Secretaries shall

10 take such steps as may be necessary to offset those

11 excess costs (and prevent future excess costs), in12 cluding suspension or termination of the subvention

13 program, adjustment of the payment rate under sec14 tion 104(b), or an adjustment of the maintenance of

15 effort requirements of the Department of Defense

16 under this section.

17 SEC. 106. DEPARTMENT OF DEFENSE PAYMENT OF LATE

18 ENROLLMENT PENALTY UNDER MEDICARE.

19 (a) DEPARTMENT OF DEFENSE PAYMENT.—In the

20 case of any Medicare-eligible uniformed services retiree

21 who enrolls under part B of title XVIII of the Social Secu22 rity Act and who, because of the date of such enrollment,

23 is subject to the late enrollment penalty imposed pursuant

24 to section 1839(b) of the Social Security Act on the

25 monthly premium under part B of such title, the Secretary
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1 of Defense shall reimburse the Medicare-eligible uniformed

2 services retiree for the cost of such penalty by—

3 (1) increasing the amount of a payment other4 wise made by the Department of Defense to the

5 Medicare-eligible uniformed services retiree, such as

6 retired or retainer pay; or

7 (2) making a special payment to the Medicare8 eligible uniformed services retiree to cover the cost

9 of such penalty.

10 (b) ELIGIBLE MEDICARE-ELIGIBLE UNIFORMED

11 SERVICES RETIREE DESCRIBED.—A Medicare-eligible

12 uniformed services retiree referred to in this section is a

13 Medicare-eligible uniformed services retiree—

14 (1) who is at least 65 years of age and was eli15 gible to enroll under part B of title XVIII of the So16 cial Security Act, and

17 (2) who at the time the individual first satisfied

18 paragraph (1) or (2) of section 1836 of the Social

19 Security Act, did not elect to enroll (or to be deemed

20 enrolled) under section 1837 of the Social Security

21 Act during the individual’s initial enrollment period.
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1 SEC. 107. MEDIGAP SPECIAL OPEN ENROLLMENT PERIOD

2 FOR CERTAIN UNIFORMED SERVICES RETIR3 EES AND DEPENDENTS.

4 (a) MEDIGAP SPECIAL OPEN ENROLLMENT PE5 RIOD.—Notwithstanding any other provision of law, in the

6 case of a Medicare-eligible uniformed services retiree who

7 seeks to enroll in a Medicare supplemental policy (as de8 fined in section 1882(g) of the Social Security Act), the

9 issuer of the Medicare supplemental policy—

10 (1) may not deny or condition the issuance or

11 effectiveness of a Medicare supplemental policy; and

12 (2) may not discriminate in the pricing of the

13 policy on the basis of the individual’s health status,

14 medical condition (including both physical and men15 tal illnesses), claims experience, receipt of health

16 care, medical history, genetic information, evidence

17 of insurability (including conditions arising out of

18 acts of domestic violence), or disability.

19 (b) ELIGIBLE MEDICARE-ELIGIBLE UNIFORMED

20 SERVICES RETIREE DESCRIBED.—A Medicare-eligible

21 uniformed services retiree referred to in this section is a

22 Medicare-eligible uniformed services retiree—

23 (1) who is at least 65 years of age and was eli24 gible to enroll under part B of title XVIII of the So25 cial Security Act, and
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1 (2) who at the time the individual first satisfied

2 paragraph (1) or (2) of section 1836 of the Social

3 Security Act, did not elect to enroll (or to be deemed

4 enrolled) under section 1837 of the Social Security

5 Act during the individual’s initial enrollment period.

6 TITLE II—FEHBP OPTION FOR

7 RETIREES

8 SECTION. 201. INCLUSION OF MEDICARE-ELIGIBLE UNI9 FORMED SERVICES RETIREES IN FEDERAL

10 EMPLOYEES HEALTH BENEFITS PROGRAM.

11 (a) IN GENERAL.—Section 1108 of title 10, United

12 States Code, is amended to read as follows:

13 ‘‘§ 1108. Health care coverage through Federal Em14 ployees Health Benefits program

15 ‘‘(a) FEHBP OPTION.—The Secretary of Defense,

16 after consulting with the other administering Secretaries,

17 shall enter into an agreement with the Office of Personnel

18 Management under which eligible beneficiaries described

19 in subsection (b) may enroll in health benefits plans of20 fered through the Federal Employees Health Benefits pro21 gram under chapter 89 of title 5.

22 ‘‘(b) ELIGIBLE BENEFICIARIES; COVERAGE.—(1) An

23 eligible beneficiary under this subsection is—

24 ‘‘(A) a member or former member of the uni25 formed services described in section 1074(b) of this
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1 title who is entitled to hospital insurance benefits

2 under part A of title XVIII of the Social Security

3 Act (42 U.S.C. 1395c et seq.);

4 ‘‘(B) an individual who is an unremarried

5 former spouse of a member or former member de6 scribed in section 1072(2)(F) or 1072(2)(G));

7 ‘‘(C) an individual who is—

8 ‘‘(i) a dependent of a deceased member or

9 former member described in section 1076(b) or

10 1076(a)(2)(B) of this title or of a member who

11 died while on active duty for a period of more

12 than 30 days; and

13 ‘‘(ii) a member of family as defined in sec14 tion 8901(5) of title 5; or

15 ‘‘(D) an individual who is—

16 ‘‘(i) a dependent of a living member or

17 former member described in section 1076(b)(1)

18 of this title who is entitled to hospital insurance

19 benefits under part A of title XVIII of the So20 cial Security Act, regardless of the member’s or

21 former member’s eligibility for such hospital in22 surance benefits; and

23 ‘‘(ii) a member of family as defined in sec24 tion 8901(5) of title 5.
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1 ‘‘(2) Eligible beneficiaries may enroll in a Federal

2 Employees Health Benefit plan under chapter 89 of title

3 5 under this section for self-only coverage or for self and

4 family coverage which includes any dependent of the mem5 ber or former member who is a family member for pur6 poses of such chapter.

7 ‘‘(3) A person eligible for coverage under this sub8 section shall not be required to satisfy any eligibility cri9 teria specified in chapter 89 of title 5 (except as provided

10 in paragraph (1)(C) or (1)(D)) as a condition for enroll11 ment in health benefits plans offered through the Federal

12 Employees Health Benefits program under this section.

13 ‘‘(4) For purposes of determining whether an individ14 ual is a member of family under paragraph (5) of section

15 8901 of title 5 for purposes of paragraph (1)(C) or (1)(D),

16 a member or former member described in section 1076(b)

17 or 1076(a)(2)(B) of this title shall be deemed to be an

18 employee under such section.

19 ‘‘(5) An eligible beneficiary who is eligible to enroll

20 in the Federal Employees Health Benefits program as an

21 employee under chapter 89 of title 5 is not eligible to en22 roll in a Federal Employees Health Benefits plan under

23 this section.

24 ‘‘(c) PROHIBITION AGAINST USE OF MTFS AND EN25 ROLLMENT UNDER TRICARE.—Covered beneficiaries
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1 under this chapter who are provided coverage under this

2 section shall not be eligible to receive care at a military

3 medical treatment facility or to enroll in a heath care plan

4 under the TRICARE program.

5 ‘‘(d) SEPARATE RISK POOLS; CHARGES.—(1) The

6 Director of the Office of Personnel Management shall re7 quire health benefits plans under chapter 89 of title 5 that

8 participate under this section to maintain a separate risk

9 pool for purposes of establishing premium rates for eligible

10 beneficiaries who enroll in such a plan in accordance with

11 this section.

12 ‘‘(2) The Director shall determine total subscription

13 charges for self only or for family coverage for eligible

14 beneficiaries who enroll in a health benefits plan under

15 chapter 89 of title 5 in accordance with this section. The

16 subscription charges shall include premium charges paid

17 to the plan and amounts described in section 8906(c) of

18 title 5 for administrative expenses and contingency re19 serves.

20 ‘‘(e) GOVERNMENT CONTRIBUTIONS.—The Secretary

21 of Defense shall be responsible for the Government con22 tribution for an eligible beneficiary who enrolls in a health

23 benefits plan under chapter 89 of title 5 in accordance

24 with this section, except that the amount of the contribu25 tion may not exceed the amount of the Government con-
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1 tribution which would be payable if the electing beneficiary

2 were an employee (as defined for purposes of such chap3 ter) enrolled in the same health benefits plan and level

4 of benefits.’’.

5 (b) CONFORMING AMENDMENTS.—(1) The item re6 lating to section 1108 in the table of sections at the begin7 ning of chapter 55 of title 10, United States Code, is

8 amended to read as follows:

‘‘1108. Health care coverage through Federal Employees Health Benefits program.’’.

9 (2) Section 724 of the Strom Thurmond National De10 fense Authorization Act for Fiscal Year 1999 (Public Law

11 105–261; 112 Stat. 2069) is amended to read as follows:

12 ‘‘SEC. 724. COMPREHENSIVE EVALUATION OF IMPLEMEN13 TATION OF DEMONSTRATION PROJECT AND

14 TRICARE PHARMACY REDESIGN.

15 ‘‘Not later than March 31, 2003, the Comptroller

16 General shall submit to the Committees on Armed Serv17 ices of the Senate and the House of Representatives a re18 port containing a comprehensive comparative analysis of

19 the TRICARE Senior Supplement under section 722 and

20 the redesign of the TRICARE pharmacy system under

21 section 723. The comprehensive analysis shall incorporate

22 the findings of the evaluation submitted under section

23 723(c).’’.
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1 (3) Chapter 89 of title 5, United States Code, is

2 amended—

3 (A) in section 8905(d), by striking ‘‘, as part of

4 the demonstration project under such section,’’;

5 (B) in section 8906(b)(4)—

6 (i) by striking ‘‘as part of the demonstra7 tion project’’; and

8 (ii) by striking ‘‘subsection (i)’’ and insert9 ing ‘‘subsection (e)’’;

10 (C) in section 8906(g)(3)—

11 (i) by striking ‘‘as part of the demonstra12 tion project’’; and

13 (ii) by striking ‘‘subsection (i)’’ and insert14 ing ‘‘subsection (e)’’; and

15 (D) in section 8909(g), by striking ‘‘the dem16 onstration project under’’.

17 SEC. 202. IMPROVED BENEFITS UNDER CHAMPUS AND

18 TRICARE STANDARD.

19 (a) COMPARABILITY.—(1) Chapter 55 of title 10,

20 United States Code, is further amended by inserting after

21 section 1108 the following new section:
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1 ‘‘§ 1109. CHAMPUS and TRICARE Standard benefits:

2 comparability with service benefit plan

3 of the Federal Employees Health Benefits

4 program

5 ‘‘(a) BENEFITS.—The health and dental care benefits

6 provided under CHAMPUS and TRICARE Standard

7 shall be comparable to the highest level of benefits pro8 vided under the service benefit plan of the Federal Em9 ployees Health Benefits program.

10 ‘‘(b) PROVIDER REIMBURSEMENT RATES.—The

11 rates prescribed for the reimbursement of health and den12 tal care providers under CHAMPUS and TRICARE

13 Standard shall be the same as those provided for the high14 est level of benefits under the service benefit plan of the

15 Federal Employees Health Benefits program.’’.

16 (2) The table of sections at the beginning of such

17 chapter is amended by inserting after the item relating

18 to section 1108 the following new item:

‘‘1109. CHAMPUS and TRICARE Standard benefits: comparability with service benefit plan of the Federal Employees Health Benefits program.’’.

19 (b) DEFINITIONS.—Section 1072 of title 10, United

20 States Code, is amended—

21 (1) in paragraph (4), by striking out ‘‘The term

22 ‘Civilian Health and Medical Program of the Uni23 formed Services’ means’’ and inserting in lieu there24 of ‘‘The terms ‘Civilian Health and Medical Pro-
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1 gram of the Uniformed Services’ and ‘CHAMPUS’

2 mean’’; and

3 (2) by adding at the end the following:

4 ‘‘(8) The term ‘TRICARE Standard’ means a

5 CHAMPUS health care benefits option that, subject

6 to the deductibles and cost-sharing requirements

7 under CHAMPUS, pays a share of the cost of cov8 ered health care services that are provided by health

9 care providers outside the Federal Government who

10 are not part of the CHAMPUS network of health

11 care providers.

12 ‘‘(9) The term ‘Federal Employee Health Bene13 fits program’ means the Federal Employee Health

14 Benefits program under chapter 89 of title 5.’’.

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