I
105TH CONGRESS
1ST SESSION
H. R. 1456
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,
as an alternative health care approach, to permit such persons to enroll
in the Federal Employees Health Benefits program.
IN THE HOUSE OF REPRESENTATIVES
APRIL 24, 1997
Mr. THORNBERRY introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committees on
Commerce, National Security, and Government Reform and Oversight,
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 reim-
bursement for health care services provided to such per-
sons, and, as an alternative health care approach, to
permit such persons to enroll in the Federal Employees
Health Benefits program.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Uniformed Services Retiree and Dependents Health Care
Availability Act’’.
(b) TABLE OF CONTENTS.—The table of contents of
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 serv-
ices 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.
TITLE I—ENROLLMENT OF RE-
TIREES IN TRICARE PRIME
AND 
Medicare 
REIMBURSE-
MENT
SEC. 101. DEFINITIONS.
For purposes of this title:
(1) MEDICARE-ELIGIBLE UNIFORMED SERVICES
RETIREE.—The term ‘‘Medicare-eligible uniformed
services retiree’’ means a member or former member
of a uniformed service who is entitled to retired pay
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or retainer pay (or equivalent pay), or a dependent
covered by section 1076(b) of title 10, United States
Code, who is entitled to hospital insurance benefits
under part A of title XVIII of the Social Security
Act (42 U.S.C. 1395c et seq.).
(2) 
TRICARE 
PROGRAM.—The 
term
‘‘TRICARE program’’ means the managed health
care program that is established by the Secretary of
Defense under the authority of chapter 55 of title
10, United States Code, principally section 1097 of
such title, and includes the competitive selection of
contractors to financially underwrite the delivery of
health care services under the Civilian Health and
Medical Program of the Uniformed Services.
(3) SUBVENTION PROGRAM.—The term ‘‘sub-
vention program’’ means the program established
under section 103 to reimburse the Department of
Defense, from the Medicare program under title
XVIII of the Social Security Act (42 U.S.C. 1395 et
seq.), for health care services provided to Medicare-
eligible uniformed services retirees through the
TRICARE program.
(4) DEPENDENT.—The term ‘‘dependent’’ has
the meaning given the term in section 1072(2) of
title 10, United States Code.
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(5) SECRETARIES.—The term ‘‘Secretaries’’
means the Secretary of Defense and the Secretary of
Health and Human Services acting jointly.
SEC. 102. AVAILABILITY OF TRICARE-PRIME FOR Medicare-
ELIGIBLE UNIFORMED SERVICES RETIREES.
The Secretary of Defense may not prohibit the enroll-
ment of Medicare-eligible uniformed services retirees in
the managed care option of the TRICARE program
(known as TRICARE prime) solely on account of age or
the entitlement of such persons to hospital insurance bene-
fits under part A of title XVIII of the Social Security Act
(42 U.S.C. 1395c et seq.).
SEC. 103. Medicare REIMBURSEMENT.
(a) REIMBURSEMENT REQUIRED.—To increase the
number of Medicare-eligible uniformed services retirees
able to enroll in the managed care option of the TRICARE
program, the Secretary of Defense and the Secretary of
Health and Human Services shall jointly establish a pro-
gram to provide the department of Defense with reim-
bursement, beginning October 1, 1997, from the Medicare
program under title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.) for health care services provided to
Medicare-eligible uniformed services retirees through the
TRICARE program. Reimbursement will only be provided
in the case of Medicare-eligible uniformed services retirees
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who are also enrolled in the supplementary medical insur-
ance program under part B of title XVIII of the Social
Security Act (42 U.S.C. 1395j et seq.).
(b) VOLUNTARY ENROLLMENT.—For purposes of the
subvention program, enrollment of Medicare-eligible uni-
formed services retirees in an option of the TRICARE pro-
gram shall be voluntary, except that the total number of
Medicare-eligible uniformed services retirees so enrolled
shall be subject to the capacity and funding limitations
specified in sections 104 and 105.
(c) EFFECT OF ENROLLMENT.—In the case of a
Medicare-eligible uniformed services retiree who enrolls in
an option of the TRICARE program, payments may not
be made under title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.) other than under the subvention pro-
gram for health care services provided through the
TRICARE program, except that the Secretaries may pro-
vide exceptions for emergencies or other situations as the
Secretaries consider appropriate.
(d) TRICARE PROGRAM ENROLLMENT FEE WAIV-
ER.—The Secretary of Defense shall waive the enrollment
fee applicable to any Medicare-eligible uniformed services
retiree enrolled in the managed care option of the
TRICARE program for whom reimbursement may be
made under section 104.
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(e) MODIFICATION OF TRICARE CONTRACTS.—In
carrying out the subvention program, the Secretary of De-
fense may amend existing TRICARE program contracts
as may be necessary to incorporate provisions specifically
applicable to Medicare-eligible uniformed services retirees
who enroll in an option of the TRICARE program.
(f) COST SHARING.—The Secretary of Defense may
establish cost sharing requirements for Medicare-eligible
uniformed services retirees who enroll in an option of the
TRICARE program and for whom reimbursement may be
made under section 104.
SEC. 104. DETERMINATION OF REIMBURSEMENT AMOUNTS.
(a) REIMBURSEMENT
OF DEPARTMENT
OF DE-
FENSE.—Beginning October 1, 1997, monthly payments
to the Department of Defense under the subvention pro-
gram shall be made from the Medicare program under title
XVIII of the Social Security Act (42 U.S.C. 1395 et seq.)
on the basis that payments are made under section
1876(a) of the Act (42 U.S.C. 1395mm(a)).
(b) AMOUNT
OF
PAYMENTS.—The Secretary of
Health and Human Services shall make payments to the
Department of Defense from the Federal Hospital Insur-
ance Trust Fund and the Federal Supplementary Medical
Insurance Trust Fund (allocated by the Secretary of
Health and Human Services between each trust fund
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based on the relative weight that each trust fund contrib-
utes to the required payment) at a per capita rate equal
to 93 percent of the applicable adjusted average per capita
cost for each Medicare-eligible uniformed services retiree
enrolled in the TRICARE program in excess of the num-
ber of such uniformed services retirees calculated under
section 105 for the Department of Defense maintenance
of health care effort.
SEC. 105. MAINTENANCE OF DEFENSE HEALTH CARE EF-
FORT.
(a) MAINTENANCE
OF EFFORT REQUIRED.—The
Secretary of Defense shall maintain the Department of
Defense health care efforts for Medicare-eligible uni-
formed services retirees so as to avoid imposing on the
Medicare program those costs that the Department of De-
fense would be expected to incur to provide health care
services to Medicare-eligible uniformed services retirees in
the absence of the subvention program.
(b) ESTIMATE OF PRIOR EFFORT.—For the first fis-
cal year of the subvention program, the Secretaries shall
estimate the amount expended by the Department of De-
fense for fiscal year 1997 for providing health care items
and services (other than pharmaceuticals provided to out-
patients) to Medicare-eligible uniformed services retirees.
For subsequent fiscal years, the amount so estimated shall
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be adjusted for inflation, for differences between estimated
and actual amounts expended, and for major changes in
the Department of Defense health care budget.
(c) TARGET FOR DEFENSE EFFORT.—On the basis
of the estimate made under subsection (b), the Secretaries
shall establish monthly targets of the number of Medicare-
eligible uniformed services retirees for whom reimburse-
ment will not be provided to the Department of Defense
under section 104.
(d) PROTECTION OF MEDICARE PROGRAM AGAINST
INCREASED COSTS.—
(1) PURPOSE.—The purpose of this subsection
is to protect the Medicare program against costs in-
curred under section 104 in connection with the pro-
vision of health care services to Medicare-eligible
uniformed services retirees that would not have been
incurred by the Medicare program in the absence of
the reimbursement requirement.
(2) REVIEW BY COMPTROLLER GENERAL.—Not
later than December 31 of each year, the Comptrol-
ler General shall determine and submit to the Sec-
retaries and Congress a report on the extent, if any,
to which the costs of the Secretary of Defense under
the TRICARE program and the costs of the Sec-
retary of Health and Human Services under the
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Medicare program have increased as a result of the
subvention program.
(3) ACTIONS TO PREVENT INCREASED COSTS.—
If the Secretaries determine that the trust funds
under title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.) still incur excess costs as a re-
sult of the subvention program, the Secretaries shall
take such steps as may be necessary to offset those
excess costs (and prevent future excess costs), in-
cluding suspension or termination of the subvention
program, adjustment of the payment rate under sec-
tion 104(b), or an adjustment of the maintenance of
effort requirements of the Department of Defense
under this section.
SEC. 106. DEPARTMENT OF DEFENSE PAYMENT OF LATE
ENROLLMENT PENALTY UNDER Medicare.
(a) DEPARTMENT OF DEFENSE PAYMENT.—In the
case of any Medicare-eligible uniformed services retiree
who enrolls under part B of title XVIII of the Social Secu-
rity Act and who, because of the date of such enrollment,
is subject to the late enrollment penalty imposed pursuant
to section 1839(b) of the Social Security Act on the
monthly premium under part B of such title, the Secretary
of Defense shall reimburse the Medicare-eligible uniformed
services retiree for the cost of such penalty by—
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(1) increasing the amount of a payment other-
wise made by the Department of Defense to the
Medicare-eligible uniformed services retiree, such as
retired or retainer pay; or
(2) making a special payment to the Medicare-
eligible uniformed services retiree to cover the cost
of such penalty.
(b) ELIGIBLE
MEDICARE-ELIGIBLE
UNIFORMED
SERVICES
RETIREE
DESCRIBED.—A Medicare-eligible
uniformed services retiree referred to in this section is a
Medicare-eligible uniformed services retiree—
(1) who is at least 65 years of age and was eli-
gible to enroll under part B of title XVIII of the So-
cial Security Act, and
(2) who at the time the individual first satisfied
paragraph (1) or (2) of section 1836 of the Social
Security Act, did not elect to enroll (or to be deemed
enrolled) under section 1837 of the Social Security
Act during the individual’s initial enrollment period.
SEC. 107. MEDIGAP SPECIAL OPEN ENROLLMENT PERIOD
FOR CERTAIN UNIFORMED SERVICES RETIR-
EES AND DEPENDENTS.
(a) MEDIGAP SPECIAL OPEN ENROLLMENT PE-
RIOD.—Notwithstanding any other provision of law, in the
case of a Medicare-eligible uniformed services retiree who
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seeks to enroll in a Medicare supplemental policy (as de-
fined in section 1882(g) of the Social Security Act), the
issuer of the Medicare supplemental policy—
(1) may not deny or condition the issuance or
effectiveness of a Medicare supplemental policy; and
(2) may not discriminate in the pricing of the
policy on the basis of the individual’s health status,
medical condition (including both physical and men-
tal illnesses), claims experience, receipt of health
care, medical history, genetic information, evidence
of insurability (including conditions arising out of
acts of domestic violence), or disability.
(b) ELIGIBLE
MEDICARE-ELIGIBLE
UNIFORMED
SERVICES
RETIREE
DESCRIBED.—A Medicare-eligible
uniformed services retiree referred to in this section is a
Medicare-eligible uniformed services retiree—
(1) who is at least 65 years of age and was eli-
gible to enroll under part B of title XVIII of the So-
cial Security Act, and
(2) who at the time the individual first satisfied
paragraph (1) or (2) of section 1836 of the Social
Security Act, did not elect to enroll (or to be deemed
enrolled) under section 1837 of the Social Security
Act during the individual’s initial enrollment period.
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TITLE II—FEHBP OPTION FOR
RETIREES
SEC. 201. INCLUSION OF Medicare-ELIGIBLE UNIFORMED
SERVICES RETIREES IN FEDERAL EMPLOY-
EES HEALTH BENEFITS PROGRAM.
(a) FEHBP OPTION.—Chapter 55 of title 10, United
States Code, is amended by adding at the end the follow-
ing new section:
‘‘§ 1107. Health care coverage through Federal Em-
ployees Health Benefits Program
‘‘(a) FEHBP OPTION.—The Secretary of Defense,
after consulting with the other administering Secretaries,
shall enter into an agreement with the Office of Personnel
Management under which a Medicare-eligible uniformed
services retiree will be offered an opportunity to enroll in
a health benefits plan offered through the Federal Em-
ployee Health Benefits program, as an additional option
for receiving health care services under this chapter. The
agreement may provide for limitations on enrollment of
Medicare-eligible uniformed services retirees in the Fed-
eral Employee Health Benefits program if the Office of
Personnel Management determines the limitations are
necessary to allow for adequate planning for access for
services under the Federal Employee Health Benefits pro-
gram.
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‘‘(b) MEDICARE-ELIGIBLE UNIFORMED SERVICES
RETIREE DEFINED.—In this section, the term ‘Medicare
eligible uniformed services retiree’ means a member or
former member of a uniformed service who is entitled to
retired pay or retainer pay (or equivalent pay), or a de-
pendent covered by section 1076(b) of this title, who is
entitled to hospital insurance benefits under part A of title
XVIII of the Social Security Act (42 U.S.C. 1395c et
seq.).
‘‘(c) CONTINUED PARTICIPATION
IN UNIFORMED
SERVICES HEALTH SYSTEM.—A Medicare-eligible uni-
formed services retiree who enrolls in a health benefits
plan offered through the Federal Employee Health Bene-
fits program pursuant to subsection (a) may continue,
after such enrollment, to receive health care services
through a treatment facility of the uniformed services.
Section 1095 of this title, relating to collection from third-
party payers, shall apply with respect to the costs of health
care services incurred by the United States on behalf
of an enrolled uniformed services retiree through a
treatment facility of the uniformed services, the Civilian
Health and Medical Program of the Uniformed Services,
or the TRICARE program.
‘‘(d) CONTRIBUTIONS.—(1) In the case of a Medi-
care-eligible uniformed services retiree who enrolls in a
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health benefits plan offered through the Federal Employee
Health Benefits program pursuant to subsection (a), the
administering Secretary concerned shall be responsible for
Government contributions that the Office of Personnel
Management determines are necessary to cover all costs
in excess of contributions under paragraph (2).
‘‘(2) The contribution required from the enrolled uni-
formed services retiree shall be equal to the amount that
would be withheld from the pay of a similarly situated
Federal employee who enrolls in a health benefits plan
under chapter 89 of title 5.
‘‘(e) MANAGEMENT OF PARTICIPATION.—If the en-
rolled uniformed services retiree is a member or former
member of the uniformed services described in section
1074(b) of this title, the authority responsible for approv-
ing retired or retainer pay or equivalent pay for the mem-
ber or former member shall manage he participation of
the enrolled member or former member in a health bene-
fits plan offered through the Federal Employee Health
Benefits program pursuant to subsection (a). If the en-
rolled uniformed services retiree is a dependent of a mem-
ber or former member, the authority that is, or would be,
responsible for approving retired or retainer pay or equiva-
lent pay for the member or former member shall manage
the participation of the enrolled dependent in a health ben-
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efits plan offered through the Federal Employee Health
Benefits program under subsection (a). The Office of Per-
sonnel Management shall maintain separate risk pools for
enrolled uniformed services retirees until such time as the
Director of the Office of Personnel Management deter-
mines that complete inclusion of enrolled uniformed serv-
ices retirees under chapter 89 of title 5 will not adversely
affect Federal employees and annuitants enrolled in health
benefits plans under such chapter.
‘‘(f) EFFECT OF CANCELLATION.—The cancellation
by a Medicare-eligible uniformed services retiree of cov-
erage under the Federal Employee Health Benefits pro-
gram shall be irrevocable except as provided by the admin-
istering Secretaries.
‘‘(g) REPORTING REQUIREMENTS.—Not later than
November 1 of each year, the administering Secretaries
and the Director of the Office of Personnel Management
shall jointly submit a report to Congress describing the
provision of health care services to Medicare-eligible uni-
formed services retirees under this section during the pre-
ceding fiscal year. The report shall address or contain the
following:
‘‘(1) The number of Medicare-eligible uniformed
services retirees enrolled in health benefits plans of-
fered through the Federal Employee Health Benefits