Health Care: Information on Coverage Choices for Servicemembers, Former Servicemembers, and Dependents
Published: 2014-12-12T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In fiscal year 2013, there were about 53 million servicemembers and former servicemembers—those who retired from military service or left for reasons other than retirement—and their dependents. These individuals may be eligible for health care coverage through DOD, VA, Medicare, or Medicaid and may purchase coverage through the exchanges established by PPACA. These sources provide individuals opportunities for choosing the coverage that is most suited to their needs, but may also require consideration of complex factors when making choices.
GAO was asked to examine federal health care programs and exchange-purchased coverage available to servicemembers, former servicemembers, and their dependents. GAO examined (1) eligibility for coverage, (2) the key benefits offered by this coverage and the individuals' costs, (3) the extent to which information on exchange-purchased coverage and federal subsidies is provided by DOD and VA, and (4) the extent to which these individuals have coverage through DOD, VA, Medicare, and Medicaid. GAO reviewed agency documents and relevant laws and regulations, analyzed U.S. Census Bureau data, and interviewed agency officials.
section_title: What GAO Found
paragraphs: Servicemembers', former servicemembers', and their dependents' eligibility for health care coverage through the Department of Defense (DOD) and the Department of Veterans Affairs (VA) is primarily based on military status, while eligibility for Medicare, Medicaid, and coverage purchased through an exchange established by the Patient Protection and Affordable Care Act (PPACA) is based on age, income, or other factors. The Centers for Medicare & Medicaid Services (CMS)—an agency within the Department of Health and Human Services (HHS)—oversees health care coverage provided through Medicare, Medicaid, and the exchanges. Most servicemembers, and former servicemembers who retired from military service, and their dependents are entitled to DOD coverage, according to DOD officials. Those who are not entitled to DOD coverage, such as reservists and certain of their dependents, may be eligible to purchase it. Former servicemembers who left military service for reasons other than retirement are not eligible for DOD coverage. All former servicemembers are generally eligible for VA coverage. Servicemembers, former servicemembers, and their dependents may also be eligible for Medicare or Medicaid, if they meet eligibility criteria, and may purchase coverage through an exchange.
Federal programs and exchange-purchased plans generally offer comprehensive coverage, which includes coverage for certain benefit categories such as inpatient hospital and outpatient medical services. These forms of coverage may have cost-sharing, subject to certain limits. Cost limits vary and depend on factors such as military status and income. For example, servicemembers do not pay an annual enrollment fee for certain DOD coverage, but former servicemembers do. VA does not generally require cost-sharing for those with certain service-connected conditions or low incomes, while it may for others.
DOD and VA provide information about exchange-purchased coverage on their websites, including that their coverage satisfies the requirement for minimal essential coverage (MEC) established by PPACA. VA informs its beneficiaries that they do not qualify for federal subsidies that lower the cost of exchange plans, even if they meet income and other requirements, because VA coverage satisfies the requirement for MEC. VA also informs its beneficiaries that they may opt out of VA coverage, and thus potentially qualify for federal subsidies. DOD, however, does not provide information indicating that most individuals with DOD coverage cannot opt out of it and, therefore, cannot qualify for federal subsidies. Nor does DOD inform those that have the option of purchasing DOD coverage that they may qualify for federal subsidies, if they do not choose DOD coverage. This is inconsistent with federal internal controls that require communication with stakeholders, and by providing this information, DOD could potentially help servicemembers, certain former servicemembers, and their dependents make more informed decisions regarding their health care coverage.
About 27 million servicemembers, former servicemembers, and their dependents had health care coverage through DOD, VA, Medicare, or Medicaid, or a combination of these in 2012, according to U.S. Census Bureau data. Of these, about 7 million had health care coverage through two or more programs in 2012, most often VA and Medicare (2.4 million), Medicare and Medicaid (1.3 million), and DOD and Medicare (1.2 million).
section_title: What GAO Recommends
paragraphs: GAO recommends that DOD provide information on how its coverage affects individuals' qualification for federal subsidies for exchange-purchased coverage. DOD concurred with GAO's recommendation. VA generally agreed with GAO's conclusions. HHS had no comments on this report.

section_title: Letter
paragraphs: In fiscal year 2013, there were an estimated 53 million servicemembers,  former servicemembers, and their dependents. Servicemembers, former  servicemembers, and their dependents may be eligible for health care  coverage through programs administered by the Department of Defense  (DOD) or the Department of Veterans Affairs (VA). Servicemembers,  former servicemembers, and their dependents may also be eligible for  Medicare, a federal health insurance program for individuals who are 65  or older or have certain disabilities or conditions, such as end-stage renal  disease, or Medicaid, a joint federal-state program that finances health  care coverage for certain low-income individuals. In addition, these  servicemembers, former servicemembers, and their dependents may also  choose to purchase health insurance coverage through the exchanges  established by the Patient Protection and Affordable Care Act (PPACA).
The Centers for Medicare & Medicaid Services (CMS)—an agency within  the Department of Health and Human Services (HHS)—oversees health  care coverage provided through Medicare, Medicaid, and the exchanges.  Coverage available through DOD, VA, Medicare, and Medicaid, and  coverage purchased through an exchange provides a range of health  care benefits at different costs to eligible servicemembers, former  servicemembers, and their dependents. Eligibility for more than one  program may provide servicemembers, former servicemembers, and their  dependents with opportunities for choosing the health coverage that is  most suited to their needs, but also may require these individuals to  consider complex factors when making these choices.
These federal programs and the exchanges offer health care coverage in  different ways, subject to the oversight of three federal agencies. DOD  administers TRICARE, a health care program through which beneficiaries  may obtain care either from military hospitals and clinics, referred to as  military treatment facilities, or from civilian providers. VA’s health care  program provides care directly through its medical centers and clinics  and, in certain situations, may pay for services provided by private  providers. CMS oversees Medicare and Medicaid, public programs that,  for eligible individuals, pay for specified health care services provided by  participating private providers. CMS also oversees the exchanges in each  state.insurance by individuals. In addition, PPACA provides federal subsidies to  qualifying individuals that reduce the cost of coverage purchased through  an exchange, provides states the option to expand Medicaid to adults   These exchanges facilitate the purchase of private health  who may not have been previously eligible, and requires individuals to  maintain minimum essential coverage (MEC) for themselves and their  dependents or be subject to a tax penalty, subject to certain exceptions.  Individuals covered by certain government-sponsored programs  (including DOD’s TRICARE program, VA’s health care program,  Medicare, and Medicaid), an employer-sponsored health insurance plan,  or a health insurance plan purchased on or off the exchanges that  provides certain health benefits (referred to as essential health benefits),are generally considered to have MEC and will not be subject to a penalty  when filing their federal taxes.
You asked us to review federal health care programs and exchange- purchased health care coverage available to servicemembers, former  servicemembers, and their dependents. This report addresses four  objectives:  1.  What factors determine servicemembers’, former servicemembers’,  and their dependents’ eligibility for health care coverage through  DOD, VA, Medicare, Medicaid, and the exchanges?  2.  What key benefits do DOD, VA, Medicare, Medicaid, and exchange- purchased coverage offer and at what potential cost to  servicemembers, former servicemembers, and their dependents?  3.  To what extent is information on exchange-purchased coverage and  federal subsidies available to servicemembers, former  servicemembers, and their dependents through DOD and VA  websites?  4.  To what extent do servicemembers, former servicemembers, and their  dependents have health care coverage through DOD, VA, Medicare,  and Medicaid?
To examine the factors used to determine servicemembers’, former  servicemembers’, and their dependents’ eligibility for health care  coverage through DOD, VA, Medicare, Medicaid, and to purchase  coverage through an exchange, we reviewed relevant federal laws, or  program descriptions provided on agency websites or in program  materials, such as handbooks and fact sheets. We also interviewed DOD,  VA, and CMS officials knowledgeable about the eligibility requirements for  these respective programs and the eligibility requirements for purchasing  coverage through an exchange.
To examine the key benefits offered by DOD, VA, Medicare, Medicaid,  and exchange-purchased coverage, we identified and summarized  benefit categories for each form of coverage as described by program  descriptions provided on agency websites or in program materials, such  as handbooks and fact sheets. We also reviewed relevant federal laws,  regulations, or our prior work. Due to the potential differences in the  individual services offered and definitions for terms used to describe  individual services provided by DOD, VA, Medicare, Medicaid, and  exchange-purchased coverage, we did not compare the individual  services covered by each type of coverage within each benefit category,  or differences in the amount, duration, or scope of covered services. Nor  did we examine the differences in coverage within individual health plans  that some programs or the exchanges may offer, such as different  managed care plan options. To examine the potential cost to  servicemembers, former servicemembers, and their dependents, we  identified and summarized individuals’ costs for coverage through DOD,  VA, Medicare, Medicaid, and exchange-purchased coverage as  described by program descriptions provided on agency websites or in  program materials, such as handbooks and fact sheets. For exchange- purchased coverage, we also identified and summarized available federal  subsidies and their effect on individuals’ costs. We also interviewed  agency officials knowledgeable about the costs to individuals for each  program and reviewed relevant federal laws, regulations, or our prior  work.
To examine the extent to which information on exchange-purchased  coverage and related federal subsidies is available to servicemembers,  former servicemembers, and their dependents through DOD and VA, we  reviewed agency materials that address this coverage, including  information provided on agency websites and in downloadable program  materials, such as fact sheets. We also reviewed federal internal control  standards related to effective and timely communications, including  sharing information externally and with stakeholders, and interviewed  knowledgeable DOD and VA officials.
These estimates from the ACS cover the January 1, 2012, to December 31, 2012,  calendar year and represent the average value over the full period. served on active duty and who reported having health care coverage  through one or more federal programs—DOD’s TRICARE program, VA,  Medicare, Medicaid, or a combination of these. We also supplemented  these results with fiscal year 2012 and 2013 DOD and VA administrative  data, such as eligibility and enrollment data. We used these data as a  basis of comparison to the most currently available ACS data and to  assess the extent to which servicemembers, former servicemembers, and  their dependents had health care coverage through DOD and VA.
We assessed the reliability of the three data sources we obtained—the  ACS data provided by VA, DOD administrative data, and VA  administrative data—in several ways, including reviewing each data  source for reasonableness and cross-referencing the ACS data with the  agencies’ administrative data from fiscal year 2012. To assess the  reasonableness of the ACS data, we reviewed related documents, such  as the ACS guidebooks, which describe how the ACS data are collected  and processed and how researchers should use the data. To assess the  reasonableness of DOD’s and VA’s administrative data, we reviewed  prior DOD and VA reports to Congress that use these agency data to  report on eligibility and enrollment. We also interviewed DOD and VA  officials knowledgeable about these data. Based on these checks, we  determined that the data we used were sufficiently reliable for the  purposes of this report.
We conducted this performance audit from December 2013 to December  2014 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: Individuals within the population of servicemembers and former  servicemembers are generally designated by their military status.  Dependents are generally designated by the military status of their  sponsor—the uniformed servicemember or retiree with which the spouse  or dependent child is associated. Servicemembers, which include  individuals who are currently serving on active duty in the U.S. military  and members of the military’s Selected Reserve, and their dependents,  accounted for a small proportion of the total population—about 4.3 million  of the 53 million total—in fiscal year 2013. Former servicemembers,  which include individuals who either retired from active duty or the  Selected Reserve, or left active duty military service for reasons other  than retirement, and their dependents, accounted for the remainder of this  population. Generally speaking, individuals who served on active duty for  a certain period of time, usually a minimum of 20 years, may choose to  retire from military service. Additionally, individuals with service  connected injuries or illnesses may be retired from the military for medical  reasons. Former servicemembers who retired from military service  accounted for about 5.3 million of this population. All servicemembers  who retire from active duty military status or the Selected Reserve are  considered to be veterans, according to DOD officials. Individuals who  served on active duty for less than 20 years, were not medically retired,  and did not choose to re-enlist are generally not eligible to retire from the  military. Former servicemembers who left military service for reasons  other than retirement—who are also considered to be veterans— generally join the civilian workforce after leaving the military. Former  servicemembers who left the military for reasons other than retirement  and their dependents accounted for the majority—about 43.7 million of  the 53 million total—of this population (see fig. 1).
DOD primarily provides health coverage through TRICARE, a health care  program that combines the resources available at military treatment  facilities with private health care providers and, for certain types of care,  VA medical centers. TRICARE health plans offer standard health benefits  packages nationwide for eligible individuals. Generally speaking,  TRICARE consists of three main health plan options: TRICARE Prime, a  managed care option; TRICARE Standard, a fee-for-service option; and  TRICARE Extra, a preferred provider option. DOD also offers TRICARE  for Life, a Medicare supplemental coverage option for TRICARE  beneficiaries that are covered by Medicare; TRICARE Reserve Select  and TRICARE Retired Reserve, coverage options available to certain  current or retired reservists and their dependents; and TRICARE Young  Adult, a program that provides services for dependent children up to   age 26.
VA, through the Veteran’s Health Administration, operates an integrated  health care delivery system. VA’s health care system provides services at  its medical centers, outpatient clinics, and residential facilities located  nationwide. When necessary, VA also pays for services provided by  private providers. VA provides a standard health care benefits package  nationally to veterans enrolled in VA health care.provides health care for certain individuals through programs such as the  Civilian Health and Medical Program of the Department of Veterans  Affairs and the Spina Bifida Program.
subsections: section_title: Medicare
paragraphs: Medicare consists of four parts—Parts A, B, C (also known as Medicare  Advantage), and D. Medicare Part A covers hospital, certain other  inpatient stays, and hospice care services. Medicare Part B covers  hospital outpatient, physician, and other medical services. Instead of  choosing to receive Part A and B services through Original Medicare,  Medicare beneficiaries generally also have the option of obtaining  coverage for Medicare services from private health plans that participate  in Medicare Advantage—also known as Part C. Individuals who select  coverage through Medicare Advantage receive their Medicare Part A and  Part B coverage from a Medicare Advantage plan. These plans cover all  Medicare medical services, except hospice, and may cover additional  services, but may charge different out-of-pocket costs than Original  Medicare and these plans may have different requirements for how  individuals get services, such as requiring a referral to see a specialist. All  Medicare beneficiaries may purchase coverage for outpatient prescription  drugs through Part D, either as a stand-alone benefit or as part of a  Medicare Advantage plan.
section_title: Medicaid
paragraphs: Medicaid is a joint federal-state health program where each state designs  and operates its own program, in accordance with federal parameters. As  a result, there is variation between states. For example, while states must  cover certain populations, such as low-income children, they also have  the option to cover additional ones, such as low-income adults without  children. Additionally, states’ Medicaid programs must cover a set of  mandatory services, including services provided by physicians and  inpatient and outpatient hospital services. States may elect to cover  additional, optional benefits and services, such as clinic services or  hospice, resulting in variation across the states.
section_title: Exchange-Purchased Coverage
paragraphs: PPACA required states to establish health insurance exchanges, or  marketplaces, where eligible individuals can compare and select among  health plans offered by participating private issuers of health care  coverage. In states electing not to establish and operate such an  exchange, PPACA requires the federal government to establish and  operate an exchange in the state. Individuals purchasing insurance  through the exchanges may also qualify for income-based federal  subsidies to reduce the cost of that coverage.
section_title: Eligibility for DOD and VA Coverage Is Primarily Based on Military Status, and Eligibility for Medicare, Medicaid, and Exchange- Purchased Coverage Is Based on Age, Income, or Other Factors
paragraphs: Servicemembers’, former servicemembers’, and their dependents’  eligibility for coverage through DOD and VA is primarily based on military  status. However, these individuals’ eligibility for Medicare, Medicaid, and  to purchase coverage through an exchange is based on age, income, or  other factors.
subsections: section_title: Eligibility for DOD and VA Coverage Is Based Primarily on Military Status
paragraphs: Eligibility for DOD health care coverage, TRICARE, is primarily based on  military status—whether or not individuals are on active duty, assigned to  a designated reserve component, or retired from the military. Similarly,  dependents’ eligibility is largely determined by the military status of their  sponsor. According to DOD officials, the vast majority of those who are  eligible for TRICARE are statutorily entitled to this coverage. Certain  individuals who are statutorily entitled to coverage must enroll in  TRICARE Prime, while others may choose the TRICARE plan through  which they wish to receive coverage. Specifically, servicemembers must  enroll in TRICARE Prime. Former servicemembers who retired from  military service and their dependents who are under the age of 65,  eligible spouses of servicemembers and former servicemembers, and  eligible children of servicemembers and former servicemembers who are  under the age of 21 may choose either enrolling in TRICARE Prime or  receiving coverage through TRICARE Standard or Extra. Individuals who  choose coverage through TRICARE Standard or Extra do not go through  an enrollment process. All former servicemembers who retired from  military service and their dependents who are aged 65 and older are  entitled to coverage through TRICARE for Life.
Certain dependents of servicemembers and former servicemembers who  retired from military service, reservists, and retired reservists are not  statutorily entitled to TRICARE coverage, but may choose to purchase  TRICARE coverage through specified plans, according to DOD officials.  Specifically, unmarried dependent children, who lose their entitlement to  TRICARE because of their age and are not eligible for coverage through  an employer, may choose to purchase TRICARE coverage through the  TRICARE Young Adult plan until age 26. Members of the Selected  Reserve who are not serving on active duty or do not have other  coverage may choose to purchase TRICARE Reserve Select for  themselves or their dependents. Retired Reserve members who are  younger than age 60 may choose to purchase TRICARE Retired Reserve  for themselves and their dependents. Generally speaking, former  servicemembers who choose to leave military service for reasons other  than retirement are not eligible for TRICARE after their military  separation.
Eligibility for VA health care coverage is primarily based on military status,  income, and service-connected disabilities. Generally, former  servicemembers—both retired and those who left military service for  reasons other than retirement—are eligible for VA coverage. VA assigns  individuals who have enrolled in VA health care to one of eight priority  groups, which are established by law. These groups, which are designed  to manage access to services in relation to available resources, define  the conditions under which a particular individual is eligible for benefits.  Priority is generally determined by the individual’s degree of service- connected or other disability, financial need, or other special status.  Priority Group 1, which has the highest priority for enrollment, includes  former servicemembers with 50 percent or more service-connected  disability or those who VA has determined to be unemployable due to  service-connected conditions. Priority Group 8, which has the lowest  priority for enrollment, includes individuals with no disability and an  income exceeding certain VA income thresholds. Former  servicemembers with a low income—individuals with an annual income or  net worth that is less than certain VA income thresholds or who are  eligible for Medicaid—are placed in a higher priority group than  individuals with higher incomes. Additionally, certain servicemembers  are also eligible for VA coverage, such as those seeking care in  emergency situations or upon referral. Although dependents are generally  not eligible for VA coverage, there are certain dependents, caregivers,  and survivors of certain former servicemembers who may qualify for VA  coverage through the Civilian Health and Medical Program of the  Department of Veterans Affairs. For example, the primary family caregiver  may be eligible for this coverage if the caregiver is without other health  care coverage.
section_title: Eligibility for Medicare, Medicaid, and Exchange- Purchased Coverage Is Based on Age, Income, or Other Factors
paragraphs: Eligibility for Medicare is generally based on age or disability. Generally  speaking, former servicemembers and their dependents are eligible for  coverage through Medicare if they are aged 65 or older. If these  individuals are under age 65, they may be eligible for Medicare if they are  disabled; have end-stage renal disease; amyotrophic lateral sclerosis,  also known as Lou Gehrig’s disease; or a condition resulting from an  environmental health hazard. Part A coverage is generally automatic for  eligible individuals, but Part B coverage is voluntary, and eligible  individuals who elect this coverage must generally pay a monthly  premium. Certain individuals must maintain Medicare coverage in order to  remain eligible for DOD or VA coverage. Specifically, former  servicemembers who retired from the military and their dependents who  are eligible for TRICARE for Life and entitled to Medicare Part A must be  enrolled in Medicare Part B coverage to maintain their TRICARE benefits.  Additionally, dependents and survivors who are covered through the  Civilian Health and Medical Program of the Department of Veterans  Affairs who are entitled to Medicare Part A must be enrolled in Medicare  Part B coverage to maintain their VA benefits.
Medicaid eligibility for all individuals, including servicemembers, former  servicemembers, and their dependents, is based on a set of factors that  includes income, age, disability, citizenship status, and state residency.  Minimum income and other eligibility criteria are established by federal  law; although states may opt to cover additional individuals beyond these  federal minimums under their Medicaid state plans or under Medicaid  demonstrations. Additionally, as a result of PPACA, states have the  option to expand eligibility for Medicaid to certain adults whose income  does not exceed 133 percent of the federal poverty level. As of  September 2014, 28 states had expanded their Medicaid programs to  cover these individuals. As a result, adults who reside in a state that has  chosen to expand Medicaid and who do not fall into one of the other  Medicaid-eligible population groups (e.g., are low-income parents and  pregnant, aged, or disabled individuals) may now be eligible for Medicaid,  whereas those residing in other states may not be. To further add to this  complexity, Medicaid eligibility can affect a former servicemember’s  access to health care through VA. Specifically, former servicemembers  who are eligible for Medicaid in the state in which they reside may be  placed in a higher VA priority group. As a result, a former servicemember  residing in a state with broader Medicaid eligibility criteria may receive VA  health care at a lower cost than a former servicemember with an identical  income that resides in a state with more restrictive Medicaid eligibility  criteria. Dependents of servicemembers and former servicemembers  are primarily eligible for Medicaid coverage under the same conditions as  servicemembers and former servicemembers, providing they are low- income and meet other eligibility criteria.
Individuals, including servicemembers, former servicemembers, and their  dependents, may purchase coverage through an exchange if they meet  certain criteria established by PPACA. Specifically, to purchase coverage  through an exchange, individuals must reside in the state where the  exchange is located, must be U.S. citizens or otherwise lawfully present  in the United States, and must not be incarcerated. To obtain exchange- purchased coverage, individuals sign up for plans through the exchanges  and pay their first monthly premiums.
section_title: DOD, VA, Medicare, Medicaid, and the Exchanges Generally Offer Comprehensive Coverage Subject to Certain Limits
paragraphs: DOD, VA, Medicare, Medicaid, and exchange-purchased coverage  generally offer comprehensive health care coverage to their respective  beneficiaries, which include servicemembers, former servicemembers,  and their dependents. However, the key benefits within these programs  may vary. DOD, VA, Medicare, Medicaid, or exchange plans may have  cost-sharing requirements for their respective beneficiaries, including  servicemembers, former servicemembers, and their dependents, but  each is subject to certain limits.
subsections: section_title: DOD, VA, Medicare, Medicaid, and Exchange- Purchased Coverage Generally Offer Comprehensive Health Care Coverage; Key Benefits within Programs May Vary
paragraphs: DOD, VA, Medicare, Medicaid, and health plans offered through the  exchanges generally offer comprehensive care to their respective  beneficiaries, which include servicemembers, former servicemembers,  and their dependents—coverage that includes certain benefit categories  such as inpatient hospital services, outpatient medical services, and  certain prescription drugs, though some of these benefits may vary. For  example, DOD’s TRICARE program offers a variety of plans that  generally cover all of these categories of services (see fig. 2). DOD’s  TRICARE program may also provide health care to servicemembers and  former servicemembers who retired from military service, and their  dependents who are living and working in designated overseas locations  where other major federal programs may not provide care.
VA offers a standard, nationwide benefits package to former  servicemembers—both retired and those who left military service for  reasons other than retirement—and certain dependents of these former  servicemembers. VA’s benefits package includes a full range of hospital  and outpatient services, prescription drugs, and long-term care services  provided in individuals’ own homes and in other locations in the  community (see fig. 3). VA also provides some services that other major  federal programs may not provide, such as long-term nursing home  care.
Medicare offers nationwide benefits to individuals—including former  servicemembers and their dependents—through Part A (standard hospital  insurance), Part B (standard medical insurance), and Part D (prescription  drug coverage). See figure 4 for examples of the categories of benefits  offered through Medicare Parts A, B, and D. Medicare Part A benefits  include inpatient hospital services, post hospital skilled nursing facility  care, hospice care, and certain home health services. Medicare Part B  coverage includes medically necessary outpatient hospital services,  physicians’ services, and durable medical equipment—such as walkers  and wheelchairs. Part B covers a limited number of outpatient  prescription drugs, such as injections administered in a physician’s office.  However, outpatient prescription drugs provided to individuals are  generally covered through Medicare Part D. Medicare Part C—Medicare  Advantage—is Medicare’s private health plan option that offers coverage  for all Part A and Part B services, but may charge different amounts and  may cover additional services, such as vision, hearing, dental, or health  and wellness programs. Additionally, Medicare Advantage plans may also  include prescription drug coverage (Medicare Part D). The number of  Medicare Advantage plans varies regionally, but nearly all Medicare  beneficiaries—including former servicemembers and their dependents  who received Medicare benefits—have a Medicare Advantage plan  available to them.
State Medicaid programs offer a package of benefits to individuals— including dependents of servicemembers and former servicemembers  and their dependents. State Medicaid programs may design their own  benefits packages, provided they fall within federal parameters. As a  result, Medicaid benefits may vary by state. State Medicaid programs  generally must cover certain categories of mandatory benefits, as defined  under federal law (see fig. 5). Additionally, states may also cover a range  of optional benefits, such as prescription drugs, physical therapy, hospice,   State Medicaid programs  and preventive and dental services for adults.may also cover benefits that are not covered through other major federal  programs, such as long-term services and supports for individuals who  have limited ability to care for themselves because of physical, cognitive,  or mental disabilities or conditions that are delivered in institutional (e.g.,  nursing facilities) and community-based (e.g., private homes) settings.
Exchange plans offer benefits to individuals—including servicemembers,  former servicemembers, and their dependents—who purchase this  coverage. Beginning in 2014, health plans offered through the exchanges  are required to cover 10 categories of benefits, referred to as essential  health benefits (see fig. 6). For example, these health plans cover certain  preventive health services, which include a variety of screenings, such as blood pressure and cholesterol screening, and certain vaccinations.Exchange plans may cover additional health care benefits beyond the  essential health benefits, such as health club memberships, hearing aids  for children, adult dental services, and infertility treatments.
section_title: DOD, VA, Medicare, Medicaid, and Exchange- Purchased Coverage May Have Premiums or Cost- Sharing Subject to Certain Limits
paragraphs: DOD, VA, Medicare, Medicaid, or exchange plans may have premiums or  cost-sharing for their respective beneficiaries, including servicemembers,  former servicemembers, and their dependents, but the costs for each are  subject to certain limits. Cost-sharing includes copayments, coinsurance,  or deductibles. DOD’s TRICARE plans may require servicemembers,  former servicemembers, and their dependents to pay a premium— referred to as an enrollment fee—or to participate in certain cost-sharing.  The amount of the premium or copayment is based on individuals’ military  status, which TRICARE plan they use, and where they choose to receive  their care. For example, servicemembers and their dependents covered  by TRICARE’s Prime plan do not pay an enrollment fee, although former  servicemembers who retired from military service and their dependents  are required to pay an annual enrollment fee of $273.84 for an individual  and $547.68 for a family for fiscal year 2014. Conversely, there are no  enrollment fees for TRICARE Standard or Extra. Additionally, former  servicemembers who retired from military service, dependents of  servicemembers, and dependents of retired servicemembers may have to  pay copayments or meet deductibles.
VA’s health care program generally does not require former  servicemembers to pay premiums and generally does not require cost- sharing for certain groups of former servicemembers, such as those with  certain service-connected disabilities or who are low income. Other  former servicemembers, such as those seeking care for non-service- connected disabilities or who have higher incomes, may be required to  participate in cost-sharing that is subject to certain limits. The average,  annual out-of-pocket costs for those required to participate in cost-sharing  was $322 for fiscal year 2013.
VA’s health care programs for eligible dependents of former  servicemembers generally require individuals to meet an annual  deductible and pay coinsurance for health care services that were not  provided at a VA facility. For example, in 2014, dependents of former  servicemembers enrolled in the Civilian Health and Medical Program of  the Department of Veterans Affairs pay an annual deductible of $50 for  outpatient care. After this deductible is paid, VA’s health care program  pays for 75 percent of covered health care expenses, and the individual is  responsible for the remaining 25 percent of expenses until the  catastrophic cap—$3,000 per family per calendar year—is reached.
Medicare may require beneficiaries—including former servicemembers  and their dependents—to pay premiums and other cost-sharing,  depending on their income and other factors. For example, Medicare Part  A coverage does not generally require payment of premiums, but  beneficiaries who did not pay Medicare taxes while working may be  required to pay a monthly premium (of up to $426 in 2014). Part A beneficiaries—including former servicemembers and their  dependents—may be responsible for a deductible, coinsurance, or a  copayment for services. Medicare Parts B and D coverage generally  requires individuals to pay a monthly premium. The monthly premium for  Medicare Part B in 2014 ranges from $104.90 to $335.70, depending on  the beneficiary’s income. Additionally, Medicare Part B generally requires  individuals to pay 20 percent of the cost of the medical service received.  Medicare Parts A and B have a per service limit on cost-sharing, but no  annual limit on these out-of-pocket costs. The costs, including premiums  and copayments, for Medicare Part C vary by health plan though there  are certain, established cost limits. For example, Medicare Advantage  plans are not able to charge more in cost-sharing than Original Medicare  for certain services, such as chemotherapy, renal dialysis, and skilled  nursing facility care. Specifically, Medicare Advantage plans cannot  require beneficiaries to share in the cost of the services beyond what is  allowed for Medicare Part B for services, which generally requires  beneficiaries to pay 20 percent of the Medicare-approved amount.  Additionally, Medicare Advantage plans have a yearly limit, which varies  by plan, on an individual’s out-of-pocket costs for medical services. There  are no such annual out-of-pocket cost limits in the Original Medicare  program.
A beneficiary generally pays no premium for this coverage unless the beneficiary or  spouse has worked fewer than 40 quarters in his or her lifetime, but the beneficiary is  responsible for required deductibles, coinsurance, and copayment amounts.
Certain servicemembers and former servicemembers and their  dependents who have Medicare Parts A and B are also automatically  covered by TRICARE for Life. Because TRICARE for Life serves as  supplemental coverage that may minimize out-of-pocket expenses, such  as copayments and deductibles, these individuals may have lower out-of- pocket expenses than an individual who does not have this additional  coverage.
State Medicaid programs may not impose premiums or cost-sharing on  certain populations or services. Specifically, states are prohibited from  imposing premiums on Medicaid beneficiaries—including dependents of  servicemembers and former servicemembers—with incomes below 150  percent of the federal poverty level. Additionally, states may not impose  cost sharing on services provided to certain populations, such as children  under the age of 18 or pregnant women. Further, states may not charge  cost-sharing for certain services, including emergency and family  planning services. States can choose to impose premiums or cost- sharing for other Medicaid beneficiaries, but these costs are subject to  certain limits. For example, total premiums and cost-sharing amounts  cannot exceed 5 percent of a family’s income.
Exchange-purchased coverage provided by participating health insurance  issuers may require beneficiaries—including servicemembers, former  servicemembers, and their dependents—to pay premiums and cost- sharing, such as deductibles and copayments. Individual premium and  cost-sharing amounts depend on the type of plan purchased, and  exchange plans are categorized according to the costs expected to be  paid by the plan—designated as bronze, silver, gold, or platinum. For  example, a bronze plan will typically have lower premiums and higher  cost-sharing when services are delivered, while a gold or platinum plan  will have higher premiums and lower cost-sharing. Additionally, PPACA established an annual limit on cost-sharing for exchange plan  beneficiaries, which in 2014, was $6,350 for self-only coverage and  $12,700 for other coverage.
PPACA established two forms of federal subsidies for exchange- purchased coverage—premium tax credits and cost-sharing reductions— which reduce costs of the coverage to individuals who qualify. To qualify  for federal subsidies, individuals must be eligible to enroll in an exchange  plan, meet income criteria, and not have MEC, including coverage  through government-sponsored programs, such as DOD or VA, Medicare,  or Medicaid. Individuals who purchase health care coverage through the  exchanges may qualify for premium tax credits if they have an income   Cost-sharing  between 100 and 400 percent of the federal poverty level. reductions, available to individuals with incomes from 100 to 250 percent  of the federal poverty limit, are only available to individuals who purchase  a silver plan through an exchange. In addition, the amounts of cost- sharing assistance vary by income. For example, in the case of one state  plan, individuals with incomes at 150 percent of the federal poverty level  and with a silver plan would have their primary care visit copayment  reduced from $45 to $3 and their specialty care visit copayment reduced  from $65 to $5.
Federal subsidies for exchange-purchased coverage may be available to  certain former servicemembers and certain dependents of  servicemembers and former servicemembers who are not covered by  DOD or VA health care, if they meet applicable income and other   Most servicemembers and former servicemembers and  requirements.their dependents have MEC and therefore are ineligible for premium tax  credits and cost-sharing reductions, regardless of their income.Therefore, in order to qualify for federal subsidies, these individuals would  first need to cancel their government-sponsored coverage. This is an  option for certain individuals, but not for others. Specifically, former  servicemembers and their dependents who have the option to enroll in  VA coverage and certain TRICARE beneficiaries who are not statutorily  entitled to TRICARE coverage—such as certain reservists and  dependents eligible for TRICARE Young Adult—may choose not to enroll  or may cancel their existing VA or TRICARE coverage. However, the  majority of servicemembers and former servicemembers who retired from  military service and their dependents are statutorily entitled to TRICARE  coverage and, therefore, do not have the option to disenroll from  TRICARE in order to potentially qualify for federal subsidies.
section_title: DOD and VA Provide Information on Eligibility for Exchange-Purchased Coverage, but DOD Provides Limited Information on Qualifying for Federal Subsidies
paragraphs: Both DOD and VA provide information to servicemembers, former  servicemembers, and their dependents on how DOD and VA coverage is  affected by PPACA requirements, as well as information on eligibility for  exchange-purchased coverage. DOD and VA disseminate this  information using a variety of mechanisms, including dedicated websites  (e.g., www.tricare.mil/aca and www.va.gov/health/aca) and program  materials available on their websites (e.g., fact sheets). The information  provided generally focuses on PPACA’s impact on their programs. For  example, as of September 2014, both DOD and VA provided the following  information through their websites:
DOD and VA health care are considered MEC, with certain  exceptions.and their dependents who have coverage through DOD or VA do not  need to take additional steps or obtain other coverage to satisfy  PPACA’s requirement that individuals have MEC in order to avoid  paying a tax penalty.
As a result, servicemembers, former servicemembers,
PPACA does not change servicemembers’, former servicemembers’,  and their dependents’ existing TRICARE and VA benefits or  individuals’ out-of-pocket costs for benefits offered through TRICARE  or VA’s health care program.
Additionally, both DOD’s and VA’s websites provide information to  servicemembers, former servicemembers, and their dependents on how  eligible individuals may get health care coverage through their respective  programs, if they are not currently covered. For example, DOD’s website  provides a link to update its eligibility database and VA provides links to  its application process. Further, agencies’ websites or program materials  suggest individuals who either do not have, or are ineligible for, coverage  through their programs consider purchasing coverage from an exchange.
VA’s website also provides information to former servicemembers and  their dependents on qualifying for federal subsidies on exchange- purchased coverage. Specifically, VA provides information on its website  that informs its users that VA coverage meets the standard for MEC  under PPACA and, as a result, individuals covered by VA do not qualify  for federal subsidies on exchange-purchased coverage. VA’s website  also provides information on how former servicemembers and their  dependents who are enrolled in VA coverage may cancel this coverage, if  they so choose. This type of information may be useful for former  servicemembers and their dependents to compare the costs and other  factors associated with VA coverage with the costs of exchange plans.  For example, in some circumstances, former servicemembers and their  dependents who do not live near a VA medical center may wish to  consider whether federal subsidies may make exchange-purchased  coverage affordable and whether that coverage may enable them to  receive care closer to home.
However, unlike VA’s website, DOD’s website does not provide  information on circumstances under which servicemembers or former  servicememembers who retired from military service, or their dependents  might qualify for federal subsidies, which could be useful in understanding  their health care choices. Specifically, DOD’s website does not inform  servicemembers and former servicemembers that retired from military  service that they and their dependents are statutorily entitled to TRICARE  coverage and, as a result, they may not opt out of this coverage in order  to potentially qualify for federal subsidies. Nor does DOD’s website inform  those individuals who may opt in to TRICARE coverage—including  reservists, retired reservists, and dependent children under the age of 26  eligible for the young adult program—that they may choose not to enroll  or cancel their TRICARE coverage in order to potentially qualify for  federal subsidies. Not providing such information is inconsistent with  federal internal control standards.
DOD officials stated that their focus has been on ensuring that  servicemembers, former servicemembers who retired from military  service, and their dependents understand that TRICARE coverage meets  the standard for MEC and is not adversely affected by the enactment of  PPACA. DOD officials also stated that to avoid confusion, they direct  servicemembers and their dependents who are no longer eligible for  TRICARE, such as those who have separated from military service or  young adults over the age of 26, to obtain information on other coverage  options from the healthcare.gov website. However, healthcare.gov does  not inform servicemembers, former servicemembers that retired from  military service, and their dependents who may qualify for federal  subsidies that these subsidies are not available to individuals who have  coverage through TRICARE. As a result, these individuals may not have  complete information to make choices on the form of coverage that best  meets their individual financial and health care needs. DOD officials  acknowledged that changes could be made to DOD’s program materials  in order to clarify that when servicemembers, former servicemembers  who retired from military service, and their dependents are eligible for  TRICARE, they do not qualify for federal subsidies on exchange- purchased coverage.
section_title: More Than 27 Million Servicemembers, Former Servicemembers, and Their Dependents Had Coverage through Federal Programs in 2012
paragraphs: More than 27 million servicemembers, former servicemembers, and their  dependents reported that they had health care coverage through DOD,  VA, Medicare, Medicaid, or a combination of these in 2012, according to  data we reviewed from the ACS. Of these, about 20 million reported they  had coverage through a single program and 7 million reported they had  coverage through a combination of two or more of these programs.  Additionally, about 22 million servicemembers, former servicemembers,  and their dependents reported that they did not have coverage through  any of these federal programs in 2012. Of these, about 18 million  reported they had coverage through another source, such as employer- sponsored coverage, and 4 million reported they were uninsured.
We found that the number of servicemembers, former servicemembers,  and their dependents covered by DOD, VA, Medicare, and Medicaid  varies by program (see fig. 7). The number of individuals with coverage  through each of these programs includes those who have coverage  through a single program and those covered through that program and  one or more other federal programs. For example, an individual with  coverage through DOD and Medicare is counted in the DOD count and  the Medicare count. As a result, the total number of those with coverage  across all four programs is greater than the 27 million total unique  servicemembers, former servicemembers, and their dependents who  reported that they had health care coverage through these programs.
ACS survey respondents reported coverage through DOD’s TRICARE  and VA health care programs. About 7.7 million servicemembers, former  servicemembers who retired from military service, and their dependents  reported that they had health care coverage through DOD’s TRICARE  program in 2012, according to data we reviewed from the ACS. About  6.4 million former servicemembers and their dependents reported that  they had health care coverage through VA according to the 2012 ACS  data.
ACS survey respondents also reported coverage through Medicare and  Medicaid. About 16 million servicemembers, former servicemembers, and  their dependents reported that they had coverage through Medicare in  2012, according to the ACS data we reviewed. Former servicemembers  may be 65 years of age or older, as may be their spouses, and therefore  would qualify for Medicare. In fiscal year 2012, there were approximately  2.0 million individuals aged 65 and older who were covered through  DOD’s health care program and 3.6 million who were covered through  VA’s health care program. Additionally, servicemembers, former  servicemembers, and their dependents may qualify for Medicare due to  disability or illness. About 5.3 million servicemembers, former  servicemembers, or their dependents reported that they had health care  coverage through Medicaid according to the 2012 ACS data we reviewed.  These 5.3 million individuals may include former servicemembers with  low incomes, or dependents of servicemembers or former  servicemembers with special-needs children.
About 7 million servicemembers, former servicemembers, and their  dependents had health care coverage through two or more programs in  2012. Of these, most—nearly 6 million—had coverage through two  programs; far fewer were covered by three or four programs (see table 1).
According to the ACS data we reviewed, approximately 2.4 million former  servicemembers and their dependents were covered by VA and  Medicare. Generally, those covered through both VA and Original  Medicare may choose which form of coverage they would like to use for a  particular episode of care. For example, former servicemembers may  elect to use their VA coverage to obtain regular preventive care visits at a  nearby VA community-based outpatient clinic and their Medicare  coverage to obtain certain specialty services, such as surgery, from a  non-VA community-based provider. In general, if an individual chooses to  receive care from a VA provider, VA pays in full if the care is for a service- connected disability and, for a non-service-connected disability, may  assess any copayments that an individual may owe through VA rules.  Conversely, if the individual chooses a Medicare participating provider,  Medicare would cover the cost of the services and assess any cost- sharing charges owed through the Original Medicare program rules.
According to the ACS data we reviewed, approximately 1.3 million former  servicemembers and their dependents are covered by both Medicare and  Medicaid. This type of coverage may occur when former servicemembers  and their dependents, who are not covered through DOD or VA, meet the  requirements for coverage through both Medicare and Medicaid. For  these individuals, Medicare generally covers most of the cost of services,  and Medicaid may cover some or all of the cost-sharing. Additionally,  Medicaid may cover certain services that Medicare does not. For  example, a former servicemember who is 65 years of age or older who  requires long-term nursing home care may receive coverage of this  service through his or her state Medicaid program, as that service is not  covered through Medicare.
According to the ACS data we reviewed, approximately 1.2 million  servicemembers, former servicemembers, and their dependents are  covered by both TRICARE and Medicare, and which program provides  the benefits depends on where the individuals receive the services. While  these individuals are eligible to receive care directly from a military  treatment facility, DOD rules allow these individuals to receive care only if  space is available. When an individual uses this option, DOD generally  covers the full cost of that episode of care. However, if these individuals  choose to receive care from a Medicare participating provider, Medicare  generally is the primary payer, with TRICARE paying the out-of-pocket  expenses for services it covers that are owed by the individuals, such as  any copayments or deductibles.
section_title: Conclusions
paragraphs: Servicemembers, former servicemembers, and their dependents may  face complex choices in considering which forms of coverage best meet  their health care needs and financial situations given that DOD, VA,  Medicare, Medicaid, and the exchanges offer a range of benefits and  cost-sharing requirements depending on individuals’ eligibility for these  programs. In 2014, the initiation of exchange-purchased coverage, and  the expansion of Medicaid in states choosing to participate, added to the  choices and complexity these individuals face in making choices for  health care coverage. Moreover, changes in servicemembers’, former  servicemembers’, and their dependents’ military status, age, disabilities,  and other factors over time can result in the need to reconsider complex  choices in coverage through different federal programs.
For servicemembers and former servicemembers to make well-informed  decisions for themselves and their dependents, it is important that federal  agencies provide complete information about individuals’ health care  coverage choices, including the range of benefits offered, and the  potential cost-sharing associated with each program. In particular,  servicemembers, former servicemembers, and their dependents need  complete information on the complex health care coverage choices  offered by DOD, VA, and the recently implemented exchanges in order to  select the coverage that best meets their needs. This includes information  on how they may qualify for federal subsidies that may reduce the cost of  exchange-purchased coverage. While DOD and VA both provide  information on their eligibility for coverage through the exchanges, only  VA provides information on how individuals may qualify for federal  subsidies. Consequently, certain servicemembers, former  servicemembers, and their dependents may not have adequate  information to compare costs efficiently and choose the coverage that  best meets their health care needs and their available financial resources.
section_title: Recommendation for Executive Action
paragraphs: To help ensure that servicemembers, former servicemembers, and their  dependents have complete information for considering their choices for  their health care coverage, we recommend that the Secretary of Defense  disseminate information on how DOD health care coverage may affect  servicemembers’, former servicemembers’, and their dependents’ ability  to qualify for federal subsidies that reduce the costs of exchange- purchased coverage.
section_title: Agency Comments
paragraphs: We provided a draft of this report to DOD, VA and HHS for comment. In  its written comments—reproduced in appendix I—DOD concurred with  our recommendation. DOD stated that it will continue to assess and  implement strategies that strengthen the dissemination of information on  how TRICARE eligibility affects its beneficiaries’ ability to qualify for  subsidies on exchange-purchased coverage. In its written comments— reproduced in appendix II—VA generally agreed with our conclusions. VA  also provided technical comments that were incorporated, as appropriate.  HHS had no comments.
We are sending copies of this report to the Secretary of the Department  of Defense, the Secretary of the Department of Health and Human  Services, the Secretary of the Department of Veterans Affairs, the  Administrator of CMS, and the appropriate congressional committees. In  addition, the report will be available at no charge on the GAO website at  http://www.gao.gov.
If you or your staffs have any questions about this report, please contact  me at (202) 512-7114 or at iritanik@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix III.
section_title: Appendix I: Department of Defense Comments
section_title: Appendix II: Department of Veterans Affairs Comments
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the named above, key contributors to this report were  James C. Musselwhite, Jr., Assistant Director; Kathryn Black;   Sarah Harvey; Laurie Pachter; Vikki Porter; and Hemi Tewarson.
section_title: Related GAO Products
paragraphs: VA Nursing Homes: Reporting More Complete Data on Workload and  Expenditures Could Enhance Oversight. GAO-14-89. Washington, D.C.:  December 20, 2013.
Patient Protection and Affordable Care Act: Status of CMS Efforts to  Establish Federally Facilitated Health Insurance Exchanges.   GAO-13-601. Washington, D.C.: June 19, 2013.
Patient Protection and Affordable Care Act: Status of Federal and State  Efforts to Establish Health Insurance Exchanges for Small Businesses.  GAO-13-614. Washington, D.C.: June 19, 2013.
Medicaid: States Made Multiple Program Changes, and Beneficiaries  Generally Reported Access Comparable to Private Insurance.   GAO-13-55. Washington, D.C.: November 15, 2012.
Medicare Advantage: Enrollment Increased from 2010 to 2011 while  Premiums Decreased and Benefit Packages Were Stable. GAO-12-93.  Washington, D.C.: October 31, 2011.
VA Mental Health: Number of Veterans Receiving Care, Barriers Faced,  and Efforts to Increase Access. GAO-12-12. Washington, D.C.:   October 14, 2011.
DOD Health Care: Cost Impact of Health Care Reform and the Extension  of Dependent Coverage. GAO-11-837R. Washington, D.C.:   September 26, 2011.
Health Care Price Transparency: Meaningful Price Information Is Difficult  for Consumers to Obtain Prior to Receiving Care. GAO-11-791.  Washington, D.C.: September 23, 2011.
Medicaid and CHIP: Given the Association between Parent and Child  Insurance Status, New Expansions May Benefit Families. GAO-11-264.  Washington, D.C.: February 4, 2011.
VA Health Care: VA Has Taken Steps to Make Services Available to  Women Veterans, but Needs to Revise Key Policies and Improve  Oversight Processes. GAO-10-287. Washington, D.C.: March 31, 2010.
Medicare Part D: Spending, Beneficiary Out-of-Pocket Costs, and Efforts  to Obtain Price Concessions for Certain High-Cost Drugs. GAO-10-529T.  Washington, D.C.: March 17, 2010.
VA Faces Challenges in Providing Substance Use Disorder Services and  Is Taking Steps to Improve These Services for Veteran. GAO-10-242R.  Washington, D.C.: March 10, 2010.
Medicare Part D: Spending, Beneficiary Cost Sharing, and Cost- Containment Efforts for High-Cost Drugs Eligible for a Specialty Tier.  GAO-10-294R. Washington, D.C.: January 29, 2010.
Medicaid: States Reported That Citizenship Documentation Requirement  Resulted in Enrollment Declines for Eligible Citizens and Posed  Administrative Burdens. GAO-07-889. Washington, D.C.: June 28, 2007.
Medicare Part D: Challenges in Enrolling New Dual-Eligible Beneficiaries.  GAO-07-272. Washington, D.C.: May 4, 2007.
TRICARE: Enrollment of the Department of Defense’s TRICARE  Beneficiaries in Medicare Part B. GAO-06-489R. Washington, D.C.:   June 20, 2006.