I
106TH CONGRESS
2D SESSION
H. R. 4124
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, to
permit such persons to enroll in the Federal Employees Health Benefits
program, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 29, 2000
Mr. THORNBERRY introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committees on
Armed Services, Commerce, 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 con-
cerned
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, to permit such persons to enroll in the Federal
Employees Health Benefits program, and for other pur-
poses.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Military Retiree Health Care Options 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 for certain uniformed services retir-
ees 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 III—OTHER MATTERS
Sec. 301. Participation of medicare-eligible beneficiaries in certain Department
of Defense pharmacy programs.
Sec. 302. Nationwide enrollment card under the TRICARE program.
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 an individual—
(A) who is—
(i) a member or former member of the
uniformed services described in section
1074(b) of title 10, United States Code;
(ii) a dependent of a member de-
scribed in subsection (a)(2)(B) or (b) of
section 1076 of that title; or
(iii) a dependent of a member who
died while on active duty for a period of
more than 30 days;
(B) who is entitled to hospital insurance
benefits under part A of title XVIII of the So-
cial Security Act (42 U.S.C. 1395 et seq.); and
(C) who has attained age 65.
(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
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.—The Secretary of
Defense and the Secretary of Health and Human Services
shall jointly establish a program to provide the Depart-
ment of Defense with reimbursement, beginning October
1, 2000, 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 serv-
ices retirees—
(1) through the TRICARE program to increase
the number of Medicare-eligible uniformed services
retirees able to enroll in the managed care option of
the TRICARE program; and
(2) in a military medical treatment facility of
the uniformed services.
(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 section 105.
TRICARE program and for whom reimbursement may be
made under section 104.
SEC. 104. DETERMINATION OF REIMBURSEMENT AMOUNTS.
(a) INDIVIDUALS ENROLLED IN PART A.—In the
case of Medicare-eligible uniformed services retirees who
are enrolled in the supplementary medical insurance pro-
gram under part B of title XVIII of the Social Security
Act (42 U.S.C. 1395j et seq.), the Secretary of Health
and Human Services shall reimburse the Secretary of De-
fense for services provided under section 103 at a rate
equal to the amount paid to a Medicare+Choice organiza-
tion under part C of this title with respect to such an en-
rollee or a rate equal to the amount that otherwise would
be payable under XVIII of the Social Security Act on a
noncapitated basis for the service. In cases in which a pay-
ment amount may not otherwise be readily computed, the
Secretary shall establish rules for computing equivalent or
comparable payment amounts.
(b) INDIVIDUALS NOT ENROLLED IN PART B.— In
the case of Medicare-eligible uniformed services retirees
who are not 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.), the Secretary of
Health and Human Services shall reimburse the Secretary
of Defense for services provided under section 103 at a
rate equal to the amount that otherwise would be payable
under title XVIII of the Social Security Act on a
noncapitated basis for the service. In cases in which a pay-
ment amount may not otherwise be readily computed, the
Secretary shall establish rules for computing equivalent or
comparable payment amounts.
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 2000 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
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 Comp-
troller General shall determine and submit to the
Secretaries 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
Secretary of Health and Human Services under the
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 adjustment of the payment rate under sec-
tion 104 or an adjustment of the maintenance of ef-
fort 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—
(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) APPLICABILITY.—This section applies to a Medi-
care-eligible uniformed services retiree—
(1) who was eligible to enroll under part B of
title XVIII of the Social 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 FOR CER-
TAIN UNIFORMED SERVICES RETIREES AND
DEPENDENTS.
(a) MEDIGAP SPECIAL OPEN ENROLLMENT.—Not-
withstanding any other provision of law, in the case of a
Medicare-eligible uniformed services retiree who seeks to
enroll in a Medicare supplemental policy (as defined 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) APPLICABILITY.—This section applies to a Medi-
care-eligible uniformed services retiree who was eligible to
enroll under part B of title XVIII of the Social Security
Act.
TITLE II—FEHBP OPTION FOR
RETIREES
SECTION. 201. INCLUSION OF MEDICARE-ELIGIBLE UNI-
FORMED SERVICES RETIREES IN FEDERAL
EMPLOYEES HEALTH BENEFITS PROGRAM.
(a) IN GENERAL.—Section 1108 of title 10, United
States Code, is amended to read as follows:
‘‘§ 1108. 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 eligible beneficiaries described
in subsection (b) may enroll in health benefits plans of-
fered through the Federal Employees Health Benefits pro-
gram under chapter 89 of title 5.
‘‘(b) ELIGIBLE BENEFICIARIES; COVERAGE.—(1) An
eligible beneficiary under this subsection is—
‘‘(A) a member or former member of the uni-
formed services described in section 1074(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.);
‘‘(B) an individual who is a former spouse of a
member or former member described in section
1072(2)(F) or 1072(2)(G));
‘‘(C) an individual who is—
‘‘(i) a dependent of a deceased member or
former member described in section 1076(b) or
1076(a)(2)(B) of this title or of a member who
died while on active duty for a period of more
than 30 days; and
‘‘(ii) a member of family as defined in sec-
tion 8901(5) of title 5; or
‘‘(D) an individual who is—
‘‘(i) a dependent of a living member or
former member described in section 1076(b)(1)
of this title who is entitled to hospital insurance
benefits under part A of title XVIII of the So-
cial Security Act, regardless of the member’s or
former member’s eligibility for such hospital in-
surance benefits; and
‘‘(ii) a member of family as defined in sec-
tion 8901(5) of title 5.
‘‘(2) Eligible beneficiaries may enroll in a Federal
Employees Health Benefit plan under chapter 89 of title
5 under this section for self-only coverage or for self and
family coverage which includes any dependent of the mem-
ber or former member who is a family member for pur-
poses of such chapter.
‘‘(3) A person eligible for coverage under this sub-
section shall not be required to satisfy any eligibility cri-
teria specified in chapter 89 of title 5 (except as provided
in paragraph (1)(C) or (1)(D)) as a condition for enroll-
ment in health benefits plans offered through the Federal
Employees Health Benefits program under this section.
‘‘(4) For purposes of determining whether an indi-
vidual is a member of family under paragraph (5) of sec-
tion 8901 of title 5 for purposes of paragraph (1)(C) or
(1)(D), a member or former member described in section
1076(b) or 1076(a)(2)(B) of this title shall be deemed to
be an employee under such section.
‘‘(5) An eligible beneficiary who is eligible to enroll
in the Federal Employees Health Benefits program as an
employee under chapter 89 of title 5 is not eligible to en-
roll in a Federal Employees Health Benefits plan under
this section.
‘‘(c) PROHIBITION AGAINST USE OF MTFS AND EN-
ROLLMENT
UNDER
TRICARE.—Covered beneficiaries
under this chapter who are provided coverage under this
section shall not be eligible to receive care at a military
medical treatment facility or to enroll in a heath care plan
under the TRICARE program.
‘‘(d) SEPARATE RISK POOLS; CHARGES.—(1) The
Director of the Office of Personnel Management shall re-
quire health benefits plans under chapter 89 of title 5 that
participate under this section to maintain a separate risk
pool for purposes of establishing premium rates for eligible
beneficiaries who enroll in such a plan in accordance with
this section.
‘‘(2) The Director shall determine total subscription
charges for self only or for family coverage for eligible
beneficiaries who enroll in a health benefits plan under
chapter 89 of title 5 in accordance with this section. The
subscription charges shall include premium charges paid
to the plan and amounts described in section 8906(c) of
title 5 for administrative expenses and contingency re-
serves.
‘‘(e) GOVERNMENT CONTRIBUTIONS.—The Secretary
of Defense shall be responsible for the Government con-
tribution for an eligible beneficiary who enrolls in a health
benefits plan under chapter 89 of title 5 in accordance
with this section, except that the amount of the contribu-
tion may not exceed the amount of the Government con-
tribution which would be payable if the electing beneficiary
were an employee (as defined for purposes of such chap-
ter) enrolled in the same health benefits plan and level
of benefits.’’.
(b) CONFORMING AMENDMENTS.—(1) The item re-
lating to section 1108 in the table of sections at the begin-
ning of chapter 55 of title 10, United States Code, is
amended to read as follows:
‘‘1108. Health care coverage through Federal Employees Health Benefits pro-
gram.’’.
(2) Section 724 of the Strom Thurmond National De-
fense Authorization Act for Fiscal Year 1999 (Public Law
105–261; 112 Stat. 2069) is amended to read as follows:
‘‘SEC. 724. COMPREHENSIVE EVALUATION OF IMPLEMEN-
TATION OF DEMONSTRATION PROJECT AND
TRICARE PHARMACY REDESIGN.
‘‘Not later than March 31, 2003, the Comptroller
General shall submit to the Committees on Armed Serv-
ices of the Senate and the House of Representatives a re-
port containing a comprehensive comparative analysis of
the TRICARE Senior Supplement under section 722 and
the redesign of the TRICARE pharmacy system under
section 723. The comprehensive analysis shall incorporate
the findings of the evaluation submitted under section
723(c).’’.
(3) Chapter 89 of title 5, United States Code, is
amended—
(A) in section 8905(d), by striking ‘‘, as part of
the demonstration project under such section,’’;
(B) in section 8906(b)(4)—
(i) by striking ‘‘as part of the demonstra-
tion project’’; and
(ii) by striking ‘‘subsection (i)’’ and insert-
ing ‘‘subsection (e)’’;
(C) in section 8906(g)(3)—
(i) by striking ‘‘as part of the demonstra-
tion project’’; and
(ii) by striking ‘‘subsection (i)’’ and insert-
ing ‘‘subsection (e)’’; and
(D) in section 8909(g), by striking ‘‘the dem-
onstration project under’’.
SEC. 202. IMPROVED BENEFITS UNDER CHAMPUS AND
TRICARE STANDARD.
(a) COMPARABILITY.—(1) Chapter 55 of title 10,
United States Code, is further amended by inserting after
section 1109 the following new section:
‘‘§ 1110. CHAMPUS and TRICARE Standard benefits:
comparability with service benefit plan
of the Federal Employees Health Benefits
program
‘‘(a) BENEFITS.—The health and dental care benefits
provided under CHAMPUS and TRICARE Standard
shall be comparable to the highest level of benefits pro-
vided under the service benefit plan of the Federal Em-
ployees Health Benefits program.
‘‘(b) PROVIDER
REIMBURSEMENT
RATES.—The
rates prescribed for the reimbursement of health and den-
tal care providers under CHAMPUS and TRICARE
Standard shall be the same as those provided for the high-
est level of benefits under the service benefit plan of the
Federal Employees Health Benefits program.’’.
(2) The table of sections at the beginning of such
chapter is amended by inserting after the item relating
to section 1109 the following new item:
‘‘1110. CHAMPUS and TRICARE Standard benefits: comparability with serv-
ice benefit plan of the Federal Employees Health Benefits pro-
gram.’’.