Defense Health Care: Most Reservists Have Civilian Health Coverage but More Assistance Is Needed When TRICARE Is Used
Published: 2002-09-06T00:00:00

Fast Facts:

Highlights:
section_title: What GAO Found
paragraphs: To expand the capabilities of the nation's active duty forces, the Department of Defense (DOD) relies on the 1.2 million men and women of the Reserve and National Guard. Currently, reserve components constitute nearly half of the total armed forces. Although DOD requires reservists to use TRICARE DOD's health care system for their own health care, using TRICARE is an option for their dependents. Nearly 80 percent of reservists had health care coverage when they were not on active duty, according to a GAO survey. The most frequently cited sources of coverage were civilian employer health plans and spouses' employer health plans. Few dependents of mobilized reservists experience disruptions in their health coverage--primarily because most maintained civilian health coverage while reservists were mobilized. Ninety percent of the reservists with civilian health coverage maintained that coverage. The 5-year cost of the coverage options delineated in the 2002 National Defense Authorization Act range from $89 million, for expanding the transition benefit allowing mobilizations, to $19.7 billion, for continuous coverage under the Federal Employees Health Benefits Program, as estimated by the Congressional Budget Office.

section_title: Letter
paragraphs: To expand the capabilities of our nation’s active duty forces, the  Department of Defense (DOD) relies on the 1.2 million men and women of  the Reserve and National Guard. Currently, reserve components  constitute nearly half our total armed forces. Reservists mobilized under  federal authorities are covered by TRICARE, DOD's health care system.  Also, their dependents, which include spouses, children, and others who  qualify, are eligible for TRICARE benefits. While DOD requires reservists  to use TRICARE for their own health care, using TRICARE is an option for  their dependents. During mobilizations some reservists may choose to  save the cost of premiums by dropping civilian insurance for their  dependents and relying on TRICARE, which has no associated premium.  However, doing so means that dependents must learn the benefits and  requirements of a new health plan. It also means that they may be unable  to use the same civilian providers if these providers do not participate in  TRICARE networks or accept TRICARE patients. To minimize potential  disruptions resulting from dropping and resuming civilian coverage,  military advocates have recommended that DOD provide a health benefit  to reservists and their dependents when reservists are not on active duty.
The National Defense Authorization Act (2002 NDAA) for Fiscal Year 2002  directed that we study the health care benefits of reserve component  members and dependents and the effect mobilization may have on these  benefits. We (1) identified the health care coverage reservists have when  not on active duty, (2) determined the extent to which mobilizations cause  disruptions in coverage for reservists and their dependents, and   (3) assessed the costs of various options specified in the 2002 NDAA,  including providing reservists and their dependents health care through  TRICARE, the Federal Employees Health Benefits Program (FEHBP), or  civilian coverage.
To determine the coverage reservists have when not on active duty and the  extent to which mobilizations cause disruptions in coverage, we obtained  preliminary analyses of responses to health care related questions from  DOD’s 2000 Survey of Reserve Component Personnel.  We also used a  questionnaire to obtain information from 360 mobilized reservists on the  type of civilian health care coverage they and their dependents had and  the extent to which mobilizations caused disruptions in coverage.  Included in these contacts were 286 reservists from three judgmentally  selected reserve component units of at least 50 reservists—representing  the Army, Navy, and Air Force—that, at the time of our audit, were  currently mobilized or had recently completed a mobilization. We also  contacted by telephone 74 reservists (or knowledgeable dependents) from  a randomly selected sample of 100 reservists, from about 100,000 who had  been mobilized since July 2000. We interviewed officials and  representatives from the Office of the Assistant Secretary of Defense for  Reserve Affairs, the Office of the Assistant Secretary of Defense for Health  Affairs, the TRICARE Management Activity (TMA), reservist advocacy  groups, and others. We also reviewed our prior work on reservists and  military health care. For costs of the different 2002 NDAA options for  providing coverage to reservists and their dependents, we relied on  estimates made by the Congressional Budget Office (CBO).  (For more on  our scope and methodology, see app. I.) We conducted our work from  November 2001 through July 2002 in accordance with generally accepted  government auditing standards.
subsections: section_title: Background
paragraphs: Reserve components participate in military conflicts and peacekeeping  missions in areas such as Bosnia, Kosovo, and southwest Asia, and assist  in homeland security. From fiscal year 1996 through fiscal year 2001, an  average of about 11,000, or 1 percent, of the roughly 900,000 reservists  were mobilized each year.  The length of mobilizations can be as long as   2 years with the mean length of mobilizations for the 6-year period we  reviewed being 117 days. As of April 2002, about 80,000, or 8 percent, of  reservists had been mobilized for 1 year for operations related to  September 11, 2001. At the same time, additional reserve personnel  continued to be deployed throughout the world on various peacekeeping  and humanitarian missions.
The rights of mobilized personnel of the reserve components are protected  under the Soldiers’ and Sailors’ Civil Relief Act of 1940 (SSCRA), as  amended, and by the Uniformed Services Employment and Reemployment  Rights Act of 1994 (USERRA), as amended. Included in these acts are  protections related to health care coverage. For example, SSCRA provides  protections for reservists who have individual health coverage.  Specifically, for individually covered reservists returning from active duty,  SSCRA requires private insurance companies to reinstate coverage at the  premium rate they would have been paying had they never left. Under  SSCRA, the insurance company cannot refuse to cover most preexisting  conditions. During military service, USERRA protects reservists’  employer-provided health benefits. Specifically, for absences of 30 days or  less (training periods typically last 2 weeks or less), health benefits  continue as if the employee had not been absent. For absences of 31 days  or more, coverage stops unless (1) the employee elects to pay for the  coverage, including the employer contributions, or (2) the employer  voluntarily agrees to continue coverage. Under USERRA, employers must  reinstate reservists’ health coverage the day they apply to be reinstated in  their civilian positions—even if the employers cannot put the employees  back to work immediately.
Reservists mobilized under federal authorities are covered by TRICARE,  DOD's health care system. If they are ordered to active duty for 31 days or  more, reservists are enrolled in Prime, TRICARE’s managed care option,  and—like other active duty personnel—are required to receive care  through TRICARE, either through 1 of 580 MTFs worldwide, or through  TRICARE’s network of civilian providers. When reservists’ mobilization  orders are for 31 to 178 days, their dependents are eligible for the Standard  and Extra options—TRICARE’s fee-for-service and preferred provider  options, respectively. Once eligible for TRICARE, reservists and their  dependents also become eligible for prescription drug benefits. When  reservists’ orders are for 179 days or more, dependents are eligible for  health care under Prime. Under TRICARE, active duty personnel,  including mobilized reservists, do not pay premiums for their health care  coverage; however, depending on the option chosen, they may be  responsible for copayments, deductibles, and enrollment requirements for  their dependents. (For an overview of these benefits, see table 1.)
Mobilized reservists are eligible for dental care through the military health  care system. However, like active duty dependents, mobilized reservists’  dependents are only eligible for dental care if they participate in DOD’s  voluntary dental insurance program, which requires enrollment and has  monthly premiums.
Because mobilized reservists’ dependents could be liable for two health  coverage deductibles in 1 year—their civilian insurers’ deductible prior to  mobilization and the TRICARE Standard or Extra deductible once  mobilized—DOD has used authorities included in the National Defense  Authorization Acts for 2000 and 2001 to provide financial assistance  through several demonstration programs. For example, the Reserves  Component Family Member Demonstration Project—available for those  currently mobilized under DOD’s Operation Noble Eagle and Operation  Enduring Freedom—eliminates the TRICARE deductible and the  requirement that dependents obtain statements that inpatient care is not  available in an MTF before obtaining nonemergency treatment from a  civilian hospital. In addition, DOD may pay non-network physicians up to  15 percent more than the TRICARE rate for treating dependents of  mobilized reservists—a cost that otherwise would be borne by dependents  if physicians required this additional payment.
Until recently, DOD had administered a transitional benefit program that  provided demobilized reservists and their dependents 30 days of additional  TRICARE coverage as they returned to their civilian health care. The 2002  NDAA extended the transitional period during which reservists may  receive TRICARE coverage from 30 days to 60--120 days, depending on the  length of active duty service. This change more closely reflects the 90 days  that USERRA provides reservists to apply for civilian reemployment when  they are mobilized for more than 181 days, and the change will provide  health care coverage if they elect to delay return to their employment  subsequent to demobilization. However, the 2002 NDAA did not provide  any transitional benefit for dependents.
section_title: Percentage of Reservists with Coverage Is Similar to That Found in the General Population
paragraphs: Overall, the percentage of reservists with health care coverage when they  are not mobilized is similar to that found in the general population—and,  like the general population, most reservists have coverage through their  employers. According to DOD’s 2000 Survey of Reserve Component  Personnel, nearly 80 percent of reservists reported having health care  coverage. In the general population, 81 percent of 18 to 65 year olds have  health care coverage. Officers and senior enlisted personnel were more  likely than junior enlisted personnel to have coverage. Only 60 percent of  junior enlisted personnel, about 90 percent of whom are under age 35, had  coverage—lower than the similarly aged group in the general population.  Of reservists with dependents, about 86 percent reported having coverage.  Of reservists without dependents, about 63 percent reported having  coverage.
More than three-quarters of reservists were provided health care coverage  by their civilian employers’ health plans or their spouses’ health plans.  (See fig. 1.) Some reservists were covered by more than one health plan.
section_title: Most Mobilized Reservists Maintain Civilian Coverage; Dropping It May Result in TRICARE Problems
paragraphs: Most reservists maintained their civilian coverage when mobilized.  Reservists generally maintained this coverage to better ensure continuity  of health benefits and care for their dependents, sometimes at an  additional cost. However, some reservists who dropped their civilian  insurance to use TRICARE reported that their dependents had problems  finding providers, establishing eligibility, understanding TRICARE’s  benefits, and obtaining assistance when questions or problems arose. We  found that such problems could be ameliorated through additional  education and assistance targeted to reservists and their dependents.
subsections: section_title: Few Mobilized Reservists’ Dependents Experience Disruptions Because Most Reservists Maintain Civilian Coverage, Some at Additional Cost
paragraphs: Because most reservists maintained their civilian coverage when  mobilized, few dependents experienced disruptions in coverage.  According to DOD’s 2000 survey, about 87 percent of reservists who had  been mobilized at least once reported having civilian insurance at the time  they were mobilized. The remaining 13 percent did not have civilian  coverage. Of those who had civilian coverage, about 90 percent  maintained it while mobilized.
According to DOD officials and reservists we interviewed, many reservists  maintained their civilian coverage to avoid disruptions associated with a  change to TRICARE and to ensure that their dependents could continue  seeing their current providers—who may not accept TRICARE  reimbursements, either as network providers or under the Standard  option. Preserving provider relationships was especially important to  reservists whose dependents with special needs had specialists familiar  with their care or to dependents who had long-standing relationships with  civilian providers.
Reservists we contacted reported varying financial arrangements for  covering the costs of their civilian premiums while they were mobilized.  USERRA does not require employers to continue paying their share of  health insurance premiums when mobilizations extend beyond 30 days.  However, employers continued to pay at least their portion of health  insurance premiums beyond this 30-day period for about 80 percent of the  reservists we contacted who maintained their employer-sponsored  coverage. Sometimes, these employers paid all costs, both their own and  the employee portion, while in other instances reservists continued to pay  the employee portion of the premium. The remaining reservists paid the  total insurance premium while mobilized. In the general population in  2001, the average employer-sponsored premium for a family plan was $588  per month with the employee generally paying about 26 percent of this  premium.
section_title: Mobilized Reservists Who Dropped Their Civilian Insurance Sometimes Experienced Problems with TRICARE
paragraphs: Mobilized reservists who used TRICARE reported a variety of problems  that they and their dependents experienced when they tried to access the  system. However, when DOD provided information and assistance  targeted toward the situations reservists and their dependents face, these  types of problems were more likely to be averted.
subsections: section_title: Reservists Reported Problems Moving into System
paragraphs: The most common problems that reservists reported were difficulties they  and their dependents had moving into the system—finding TRICARE  providers, establishing eligibility, understanding TRICARE’s benefits, and  obtaining assistance when questions or problems arose. While similar  problems have been reported by other active duty personnel, reservists  and their dependents are more likely to experience such problems  because they often live in areas distant from MTFs, and their active duty  service is brief and episodic.
Of the 360 reservists with recent mobilization experience that we  contacted, about 38 percent reported some kind of problem with  TRICARE. One problem, constituting about a quarter of the reported  problems, was finding a TRICARE provider. Mobilized reservists and their  dependents can have more difficulty finding TRICARE providers because  many do not live in areas where the network is robust. Compared to 5  percent of active duty personnel, about 70 percent of reservists live and  work more than 50 miles (or an hour’s drive) from an MTF—areas DOD  has designated as remote. Because DOD’s civilian contractors are  generally not required to establish TRICARE civilian networks in these  areas, a network of providers may not exist. Where networks do exist,  provider choice may be limited.  TRICARE Prime Remote (TPR) and TPR  for Active Duty Family Members were established to help improve access  to care in remote areas for active duty and mobilized reservists and their  dependents. However, dependent eligibility is statutorily based on residing  with a service member who both lives and works in a remote area. As a  result, because mobilized reservists are most often assigned to work in a  location near an MTF or deployed overseas, few dependents of reservists  who are mobilized for 179 days or more are eligible for these programs.
About 17 percent of reported problems involved documenting and  establishing eligibility. For example, reservists had problems with DOD  not providing identification cards acknowledging that they and their  dependents were TRICARE beneficiaries. They also had difficulties with  the accuracy of information in the Defense Enrollment Eligibility  Reporting System (DEERS), DOD’s database that maintains benefit  eligibility status. In order to ensure TRICARE eligibility, any status  changes must be reported to DEERS, and according to a DOD civilian  contractor, the services do not always send these changes to DEERS  promptly.
Reservists reported a variety of situations in which DEERS inaccuracies  created problems. DEERS did not reflect that some reservists were on  active duty; therefore, they and their dependents appeared to be ineligible  for services and were denied care or medications. Further, in instances in  which DEERS failed to reflect Prime enrollment for a dependent, claims  were paid under Extra, resulting in charges for copayments that should  not have been required. Also, mobilized reservists married to active duty  personnel reported problems ensuring that DEERS accurately reflected  their mobilized status so that they were eligible for active duty, rather than  dependent, benefits and access privileges. Active duty families also have  problems with DEERS, but, according to a TRICARE adviser at one site  we visited, DEERS problems are accentuated for reservists because they  move in and out of the system. However, determining the extent of such  DEERS problems was beyond the scope of our work.
Finally, about 40 percent of the problems reservists reported related to  understanding TRICARE’s benefits and obtaining assistance when  questions or problems arose. According to DOD officials, mobilized  reservists have greater difficulty understanding and navigating TRICARE  than other active duty personnel. First, reservists have less incentive to  become familiar with TRICARE because mobilizations are for a limited  period and because TRICARE only becomes important to them and their  dependents if they are mobilized. Further, when first mobilized, reservists  must accomplish many tasks in a compressed period. For example, they  must prepare for an extended absence from home, make arrangements to  be away from their civilian employment, obtain military physical  examinations, and ensure that their families are registered in DEERS. DOD  officials told us that learning about TRICARE may be a low priority for  reservists when they are mobilizing.
section_title: Targeted Education and Assistance Have Helped Minimize Some Reservists’ and Dependents’ TRICARE Problems
paragraphs: According to interviews with reservists and support personnel at sites we  visited, problems with TRICARE could be reduced if education and  administrative assistance were available and information was targeted to  the needs of reservists. In addition, when beneficiaries, especially  reservists’ dependents, were provided assistance with using the TRICARE  system—identifying contact points and understanding TRICARE benefits  and how to use them—they generally were able to obtain appropriate,  timely health care through TRICARE.
At one site we visited, assistance had been lacking or inadequate, and  reservists were experiencing numerous difficulties with TRICARE. Here,  1,100 personnel, who were mobilized beginning in late September 2001  under Operation Noble Eagle and Operation Enduring Freedom, initially  had no on-base MTF or TRICARE assistance. As a result, when questions  arose, these mobilized reservists and their dependents sometimes  obtained and passed along inaccurate information. In other instances they  contacted TRICARE’s civilian contractor directly, sometimes waiting for  over an hour on hold trying to obtain information. In November 2001, two  administrative personnel were assigned, including a health benefits expert,  and at the time of our visit in February 2002, progress was being made to  resolve reservists’ and their dependents’ health care questions. However,  because this assistance was initially delayed, two staff members were  insufficient to address the volume of misinformation and problems that  existed on site. Beneficiaries told us they were still confused about  TRICARE regulations at the time we visited. Some mobilized reservists  still did not understand that they had to select a TRICARE primary care  manager and were continuing to use their non-network providers, even  though regulations require active duty personnel to participate in Prime.  Likewise, their dependents were continuing to have problems, such as  determining whether they could continue to see their civilian providers  under TRICARE.
At another site we visited, which had an MTF and better on-base  assistance, we observed that reservists and their dependents generally  were not experiencing problems with TRICARE. In this location DOD had  a mobilization team on site to help explain the benefits and had a staff on  base to offer assistance when needed. To help ensure that reservists and  dependents understood the various TRICARE options, the mobilization  team presented general information on TRICARE and tailored benefits  discussions to beneficiaries’ specific circumstances. For example, the  mobilization team tailored TRICARE information depending on whether  reservists’ dependents lived in areas with established networks or in areas  where TRICARE networks were minimal or nonexistent. For the latter, the  mobilization team discussed how TRICARE’s Standard option could  permit dependents to continue relationships with civilian physicians by  paying copayments similar to those required by many civilian insurers. The  mobilization team members also referred reservists to TRICARE offices,  Internet Web links, and toll-free information lines, and provided backup  telephone numbers, including their own, to handle additional questions.
section_title: Alternative Coverage Options Presented in 2002 NDAA Vary Widely in Cost
paragraphs: The 2002 NDAA directed us to evaluate several health coverage options  through TRICARE, FEHBP, or civilian insurance as possible mechanisms  for ensuring continuity in benefits for reservists and their dependents.  Some of the options would provide coverage on a continuous basis during  the entire enlistment period, regardless of reservists’ mobilization status,  while others would provide additional or alternative coverage only during  or following periods of mobilization. Cost estimates for these options,  which were provided by CBO, range from a low of about $89 million to a  high of about $19.7 billion over a 5-year period. (See app. II for estimate  assumptions.)
For 2003 through 2007, the estimated cost to DOD for providing reservists  and their dependents continuous health care coverage, regardless of  reservists’ mobilization status, would range from about $4 billion to   $19.7 billion for the 5-year period, depending on how the benefit was  provided. CBO estimates that providing the benefit through TRICARE with  no premium for reservists would cost DOD about $10.4 billion. (See   table 2.) DOD’s cost would be reduced to about $7 billion if reservists paid  a premium similar to that paid by active duty retirees under age 65 or to  about $4 billion if reservists paid a premium share similar to that paid by  federal employees for FEHBP.
Providing insurance through FEHBP would be more expensive to DOD  because CBO estimated the premium would be based on the existing  FEHBP pool—an older population using more health care services. (See  table 3.) While CBO estimates that the actual cost of providing health care  for reservists and their dependents under FEHBP would be about   $10.9 billion, similar to the cost of providing the TRICARE benefit, it  estimates the DOD health insurance premium costs for FEHBP to be about  $19.7 billion. If reservists paid the typical FEHBP employee portion of the  premium, CBO estimates that DOD premium costs would be reduced to  about $10.2 billion.
The cost for options providing health care coverage only during  mobilizations or for expanding the benefit after mobilizations would be  from $89 million to $1.8 billion over the 5-year period, according to CBO  estimates. (See table 4.) For example, in lieu of a TRICARE benefit, DOD  might assume the costs of reservists’ civilian coverage during mobilization.  The value of this benefit would vary from reservist to reservist depending  on (1) the cost of the reservist’s portion of the premium, (2) the extent of  employer coverage, and (3) whether the employer continued to pay the  premium during the reservist’s mobilization. CBO estimates that if each  year 80,000 reservists, the approximate number mobilized in April 2002,  were mobilized for a 1-year period, the cost to fully pay for civilian health  coverage for the 5-year period would be about $1.8 billion. The cost of  DOD allowing dependents with civilian insurance the choice of TRICARE  or a monetary voucher equivalent to the estimated value of the TRICARE  benefit would be about $1.1 billion over 5 years, according to CBO’s  estimate. Although the amount of this voucher would be based on the  average cost of the TRICARE benefit for which the dependent is eligible,  this option would increase DOD’s costs because historically many  dependents of mobilized reservists have relied on their civilian coverage  and have not used their TRICARE benefit. Revising the transitional period  that DOD has provided so that demobilized reservists retain their  TRICARE benefits for an additional 30 days and their dependents retain  benefits for a 90-day period would cost $89 million for the 5-year period,  according to CBO’s estimate.
section_title: Conclusions
paragraphs: Because most reservists have civilian insurance and maintain it while  mobilized, few of their dependents experience problems with disruptions  to their health care, such as being forced to change providers, learn new  health care plan requirements, and adjust to different benefit packages.  However, when using TRICARE some dependents of mobilized reservists  have experienced certain problems—in part, because they do not  adequately understand how the plan works.
Problems that reservists and their dependents face with health coverage  during mobilizations could be mitigated if DOD improved the information  and assistance provided them. Reservists are confronted with choices and  circumstances that are more complex than those faced by active duty  personnel. Their decisions about health care are affected by a variety of  factors—length of orders, where they and their dependents live, whether  they or their spouses have civilian health coverage, and the amount of  support civilian employers would be willing to provide with health care  premiums. In addition, reservists must determine whether their existing  civilian providers would be willing to accept TRICARE while they are  mobilized since their desire not to disrupt these relationships during a  temporary mobilization may outweigh other considerations.
section_title: Recommendations for Executive Action
paragraphs: We recommend that the Secretary of Defense direct the Assistant  Secretary of Defense for Health Affairs to    ensure that reservists, as part of their ongoing readiness training, receive  information and training on health care coverage available to them and  their dependents when mobilized and    provide TRICARE assistance during mobilizations targeted to the needs of  reservists and their dependents.
section_title: Agency Comments
paragraphs: DOD reviewed and commented on a draft of this report. It concurred with  the report’s recommendation and generally agreed with its findings. DOD  stated that it recognized the importance of a well-informed TRICARE  beneficiary population and to that end has already taken a number of steps  to ensure that reservists understand their health care benefits. For  example, the TRICARE Management Activity website and the Reserve  Affairs portion of the Department of Defense website provide information  about the health benefits available for reservists. Further, DOD stated it  will continue to emphasize the importance of health care education and,  as problem areas are identified, will immediately take steps to correct  them. DOD’s comments are reprinted in appendix III.
DOD provided additional comments from the Department of the Army and  technical comments from the TRICARE Management Activity and from the  Office of the Assistant Secretary of Defense for Reserve Affairs. The Army  took exception to some of the information presented in the report that  was obtained from DOD’s 2000 Survey of Reserve Component Personnel.  The Army stated that the number of reservists who continued to retain  their civilian health care coverage “seems exceptionally high” although  they could provide no basis to support this claim. Nevertheless, because of  their concern, we subsequently contacted DOD officials at the Defense  Manpower Data Center, who were responsible for the survey, to reconfirm  the information they provided. After we explained the Army’s position to  them, they reaffirmed that the data from the survey instrument were  correct. They stated that for the period covered by this survey prior to the  2001 partial mobilization there was no reason to question the accuracy of  the estimate. The Army also asked for other analyses, such as a cost- benefit analysis of various TRICARE demonstration programs that were  beyond the scope of our work. Technical corrections and clarifications  have been incorporated into the text as appropriate.
We are sending copies of this report to the Secretary of Defense,  appropriate congressional committees, and other interested parties.  Copies will also be made available to others on request. In addition, the  report is available at no charge on the GAO Web site at  http://www.gao.gov. If you or your staffs have any questions about this  report, please contact me at (202) 512-7101. Other contacts and major  contributors are listed in appendix IV.
section_title: Appendix I: Scope and Methodology
paragraphs: To determine whether reservists had health coverage when not on active  duty and the source of any civilian coverage, we obtained analyses from  the Department of Defense’s (DOD) 2000 Survey of Reserve Component  Personnel. Although all survey questions had not been analyzed, we  obtained information from DOD on selected questions for which survey  processing had been completed. Because DOD had not yet completed  processing for all questions, we were unable to obtain a more thorough  DOD analysis or to obtain data for our own analyses. Using the analyses  DOD provided, we were able to do limited checks for consistency of  results, but, for the most part, we were not able to verify the accuracy of  DOD’s data.
To learn about the type of civilian health care coverage reservists and their  dependents have and the extent to which mobilizations caused disruptions  in coverage, we obtained information from 286 mobilized, or recently  mobilized, reservists from three judgmentally selected reserve units— representing the Army, Navy, and Air Force. We selected these units with  the help of DOD personnel using two criteria: (1) the unit consisted of at  least 50 reservists and (2) at the time of our audit work, the unit was  mobilized or had recently completed a mobilization and was drilling. We  visited these sites and administered a questionnaire to identify the types  and volume of problems that reservists and their dependents were  experiencing with health care coverage. Sometimes we used the  questionnaire as a structured interview guide and administered it to  individuals; more frequently, reservists completed the questionnaires in a  group and spoke with us individually afterwards if they had issues they  wanted to discuss. During these visits, we also interviewed unit  commanders, personnel responsible for mobilization activities, TRICARE  personnel, and medical staff, when available.
We also used our questionnaire as a guide in conducting a telephone  survey of an additional 74 reservists or their family members. We obtained  a randomized list of reservists who had been mobilized during the period  July 2000 through December 2001, along with the sampled reservists’  home addresses and telephone numbers, from DOD’s Defense Manpower  Data Center. We first excluded from the sample those reservists whose  records lacked both addresses and telephone numbers; then proceeded in  order from the first name on the list, either calling the telephone number  provided or attempting to locate a telephone number using the name and  address. When we were not able to obtain a telephone number or when  the telephone number given to us had been disconnected or was  determined to be inaccurate, we also excluded that reservist. Of 100  reservists whom we were able to contact or leave messages for, we  ultimately completed an interview with 74 reservists or family members.  The remaining 26 reservists either did not return our calls or refused to  participate in our survey.
Finally, we interviewed officials in the offices of the Assistant Secretary of  Defense for Reserve Affairs and the Assistant Secretary of Defense for  Health Affairs; the TRICARE Management Activity; the National Guard  Bureau; the Department of Labor; representatives of the Army, Navy, and  Air Force Reserve Components; and reservist advocacy groups, including  the Enlisted Association of the National Guard of the United States, the  National Guard Association of the United States, the National Military  Family Association, the Ohio Air National Guard, the Reserve Officers  Association, the Retired Officers Association, and the Retired Enlisted  Association. We also reviewed our prior work on reservists and military  health care.
The Congressional Budget Office (CBO) calculated costs associated with  options specified in the 2002 NDAA for providing coverage for reservists.  We did not independently verify data used to calculate the cost estimates.  See appendix II for CBO’s assumptions.
section_title: Appendix II: CBO’s Assumptions for Cost Estimates
paragraphs: In calculating the cost estimates specified in the National Defense  Authorized Act for FY 2002 for providing health care coverage to  reservists, CBO used the following basic assumptions:    The estimates were based on 865,000 reservists, unless otherwise  indicated.
The benefit would start on January 2003.    The percentage of the reserve force with dependents is 50.42.    Reservists with dependents each have about 2.17 dependents.
Inflation would be 8.5 percent in 2003, 7.5 percent in 2004, and 6.5 percent  in the remaining years.
The 14 percent of reservists who were federal employees were excluded  from the estimates because they presumably have health insurance  coverage under Employees Health Benefits Program (FEHBP).
The specific assumptions used to develop each benefit option are  discussed below.
subsections: section_title: Options for Continuous Coverage under TRICARE (Shown in Table 2)
paragraphs: TRICARE (no premium)
Ninety percent of reservists would take advantage of this option.    Reservists and their dependents would use TRICARE-approved civilian  physicians with little use of military treatment facilities (MTF).
TRICARE costs were weighted from FEHBP costs, assuming that  reservists cost about 40 percent of the FEHBP premium and families cost  about 60 percent.
TRICARE costs were estimated at $1,513 for a single reservist and $5,173  for a family during 2003.
Costs of TRICARE Prime and TRICARE Standard are the same.    Some beneficiaries would use TRICARE as a second payer insurance. (The  14 percent of reservists who presumably were enrolled in FEHBP was  used as a proxy for this purpose.)
Second payer costs were 25 percent of the regular TRICARE costs.    Reservists will enroll over 3-year phase-in period.
TRICARE with premium similar to under 65 active duty retirees    Premium consists of $230 per year for individuals and $460 per year for  families.
Seventy percent of reservists would enroll in TRICARE under these  conditions.
Reservists and their dependents would use TRICARE-approved civilian  physicians with little use of MTFs.
TRICARE costs were weighted from FEHBP costs, assuming that  reservists would cost about 40 percent of the FEHBP premium and  families would cost about 60 percent of the FEHBP premium.
TRICARE costs were estimated at $1,513 for an individual and $5,173 for a  family during 2003.
Costs of TRICARE Prime and TRICARE Standard are the same.    No second payer costs exist.    Reservists will enroll over 3-year phase-in period.
TRICARE with premium-share equal to that of FEHBP    Reservists would pay 28 percent of premium costs, which is similar to the  percentage of FEHBP premiums paid by civilian federal employees.
Fifty percent of reservists would enroll in TRICARE under these  conditions.
Reservists and their dependents would use TRICARE-approved civilian  physicians with little use of MTFs.
TRICARE costs were weighted from FEHBP costs, assuming that  reservists cost about 40 percent of the FEHBP premium and families cost  about 60 percent.
Cost for an individual would be $1,513 and cost for a family would be  $5,173 during 2003.
Costs of TRICARE Prime and TRICARE Standard are the same.    No second-payer costs exist.    Reservists will enroll over 3-year phase-in period.
section_title: Options for Continuous Coverage under FEHBP (Shown in Table 3)
paragraphs: FEHBP (no premium)
Ninety percent of reservists would enroll in this program.    DOD would pay the employee’s share of the premium for the 14 percent of  reservists who presumably were enrolled in FEHBP.
Blue Cross/Blue Shield and Kaiser Permanente premiums were used to  calculate costs.
The estimated average annual cost was $3,760 for individuals and $8,718  for families during 2003.
Reservists will enroll over 3-year phase-in period.
FEHBP (regular premium)
Seventy percent of reservists would enroll in FEHBP if they had to pay the  employee’s share of the premium.
No cost was included for the 14 percent of reservists who presumably are  enrolled in FEHBP.
Average premiums for individuals and families were based on data  provided by FEHBP actuaries.
During 2003, the estimated cost for an individual would be $3,670 with  DOD paying about 71 percent, and cost for a family would be $8,635 with  DOD paying about 73 percent.
Reservists will enroll over 3-year phase-in period.
section_title: Options during Mobilizations (Shown in Table 4)
paragraphs: Costs are based on 80,000 reservists—the approximate number mobilized  in April 2002.
No cost was included for the 14 percent of reservists who presumably are  enrolled in FEHBP.
Ninety percent of reservists would enroll in the program.    Average cost of employee premium and employer’s share were based on  Kaiser Family Foundation data.
During 2003, cost for an individual would be $2,877 with DOD paying 86  percent, and cost for a family would be $7,656 with DOD paying 74  percent.
There is no phase-in period.
Provide voucher for civilian insurance    Costs are based on 80,000 reservists—the approximate number mobilized  in April 2002.
Voucher could be used to pay for any current health insurance coverage,  including both employee’s and employer’s share.
FEHBP enrollees would not receive vouchers.    Ninety percent of reservists would use vouchers.    Voucher costs were based on 2003 estimated TRICARE costs of $1,513 for  individuals and $5,173 for families. (TRICARE costs were weighted from  FEHBP costs, assuming reservists would cost about 40 percent of the  FEHBP premium and families would cost about 60 percent.)
Voucher may not be used to cover the cost of paying second payer  insurance—only covers primary insurance.
There is no phase-in period.
section_title: Option following Mobilizations (Shown in Table 4)
paragraphs: Extend/Offer transition period following demobilization    Costs are based on 80,000 reservists— the approximate number mobilized  in April 2002.
Forty percent of demobilized reservists would use this option.    No cost was included for the 14 percent of reservists who presumably  were enrolled in FEHBP.
Reservists would use TRICARE-approved civilian physicians with little use  of MTFs.
TRICARE costs were weighted from FEHBP costs (assuming reservists  would cost about 40 percent of the FEHBP premium and families would  cost about 60 percent of the FEHBP premium).
All reservists were eligible regardless of existing insurance coverage.    Benefit for reservist is only 30 days since the first 60 days are currently  covered.
Dependents would be covered for 90 days.    There is no phase-in period.
section_title: Appendix III: Comments from the Department of Defense
section_title: Appendix IV: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Acknowledgments
paragraphs: In addition to those named above, the following staff members made key  contributions to this report: Aditi Archer, Richard Wade, Julianna  Williams, Mary W. Reich, and Karen Sloan.