Limits on TRICARE for Reservists: Frequently Asked Questions
Released: 2019-10-17T00:00:00

Background

The Department of Defense (DOD) operates a Military Health System (MHS) that delivers certain health entitlements under Chapter 55 of Title 10, U.S. Code. The Defense Health Agency (DHA)âa component of the MHSâadministers the TRICARE program, which offers health care services to approximately 9.5 million beneficiaries, composed of military personnel, retirees, and their families. Beneficiaries may receive health care services in DOD-operated hospitals and clinicsâknown as military treatment facilities (MTFs)âor through participating civilian health care providers. DOD operates 723 MTFs in the United States and in overseas locations. Each MTF provides a range of clinical services depending on its size, mission, and level of capabilities. Only active duty servicemembers are entitled to care in any MTF. Dependents and retirees may receive care on a space-available basis that takes into account patient capacity, beneficiary category (e.g., servicemember, family member, retiree), and enrollment status.

When care is not available at an MTF, beneficiaries may receive care from a civilian health care provider who participates in TRICARE. The three main health plan options offered to eligible beneficiaries include TRICARE Prime, TRICARE Select, and TRICARE for Life.

TRICARE also offers premium-based health plan options for certain beneficiaries, such as qualified members of the Selected Reserve, retired reservists, young adults, and transitioning servicemembers. Other TRICARE benefits include a pharmacy program, optional dental plans, and a vision plan for certain beneficiaries.

This report answers frequently asked questions about TRICARE health plan options tailored for certain reservists, retired reservists, and their families (i.e., TRICARE Reserve Select and TRICARE Retired Reserve) and certain statutory prohibitions that limit their participation in the plans.

Questions and Answers

1. What is TRICARE Reserve Select and TRICARE Retired Reserve?

TRICARE Reserve Select (TRS) is a premium-based health plan available worldwide for some members of the Selected Reserve and their families. TRS was established by Section 701 of the Ronald W. Reagan National Defense Authorization Act (NDAA) of Fiscal Year 2005 ( P.L. 108-375 ). TRICARE Retired Reserve (TRR) is a premium-based health plan available worldwide for qualified retired members of the reserve components. TRR was established by Section 705 of the NDAA for FY2010 ( P.L. 111-84 ) as a TRICARE coverage option for so-called gray area reservists, defined as those who have retired but are too young to draw retired pay.

The plans are similar to TRICARE Select (i.e., preferred provider option), which feature monthly premiums, annual deductibles, and fixed co-pays when receiving care from a network provider or paying a percentage of the allowable charge when receiving care from a TRICARE-authorized, nonnetwork provider. Eligible beneficiaries residing outside of the United States are also eligible for TRS and TRR; however, the availability of network providers may be limited based on geographic location.

By law, the Department of Defense (DOD) is required to subsidize the cost of TRS. Servicemembers pay 28% of the cost of the program in the form of premiums. For TRR, enrollees pay the full cost of the calculated premium as determined by the Secretary of Defense. DOD does not subsidize the program costs for TRR. DOD annually updates the premiums for each program on an "appropriate actuarial basis." Monthly TRS and TRR premiums for calendar years 2019 and 2020 are listed in Table 1 .

DOD reports that at the end of FY2018, 383,683 beneficiaries were covered by TRS and 9,019 beneficiaries were covered by TRR.

2. Who qualifies for TRS, and what are the statutory prohibitions on TRICARE Reserve Select eligibility for certain members of the reserve components?

Members of the Selected Reserve (i.e., drilling reservists) and their families qualify for TRS if the following criteria are met:

the reservist is not on active duty orders; the reservist or their family members are not covered under the Transitional Assistance Management Program; and the reservist or their family members are not eligible for the Federal Employee Health Benefits (FEHB) program.

Prior to 2006, TRS availability was limited to members of the Selected Reserve (including family members) after serving on continuous active duty in support of a contingency operation for 90 or more days and signing an agreement to continue serving in the Selected Reserve for one or more years. TRS coverage was also limited to the lesser of:

one year (in cases where an activated reservist does not continuously serve on active duty for at least 90 days due to an "injury, illness, or disease incurred or aggravated while deployed"); one year for each consecutive period of 90 days of continuous active duty service; or the number of years agreed upon in the military service obligation agreement.

Section 706 of the John Warner NDAA for FY2007 ( P.L. 109-364 ) amended 10 U.S.C. Â§1076d to expand TRS eligibility, including removal of the military service obligation agreement, active duty service length, and period of coverage requirements. In revising TRS, the law also added a prohibition on members of the Selected Reserve and their family members from being eligible for TRS if they are also eligible for, or enrolled in, "a health benefits plan under Chapter 89 of Title 5," U.S. Code. This health benefit plan is known as the FEHB program.

3. Who is eligible for TRR, and what are the statutory prohibitions on TRICARE Retired Reserve eligibility for qualified retired reservists?

Retired members of the reserve components and their family members qualify for TRR if the following criteria are met:

the retiree is qualified for non-regular retirement under chapter 1223 of Title 10, U.S. Code; the retiree is under age 60; and the retiree or their family members are not eligible for the FEHB program.

P.L. 111-84 , which established TRR, incorporated a similar prohibition on qualified retired members of the reserve components and their family members from being eligible for TRR if they are eligible for the FEHB program. For example, a reservist or qualified retired reservist who is also a civil service or U.S. Postal Service (USPS) employee, annuitant, or family member that is eligible for the FEHB program is barred from enrolling in TRS or TRR. This restriction does not apply to other TRICARE programs for which reservists or retired reservists may also be eligible under other criteria (e.g., TRICARE Prime, TRICARE Select, TRICARE for Life, TRICARE Dental Program, or the Transition Assistance Management Program).

4. How many beneficiaries do the TRS eligibility restrictions affect?

In 2019, the Congressional Budget Office (CBO) estimated approximately 110,000 members of the Selected Reserve are prohibited from enrolling in TRS because they are eligible for FEHB. This represents approximately 13.7% of the total Selected Reserve force. CBO also estimated that about "one third would enroll in TRS if given the opportunity." Neither DOD nor CBO has published any similar estimates for TRR.

5. Why did Congress enact these statutory prohibitions?

The congressional record, the committee and conference reports accompanying the enacting and amending legislation for TRS and TRR, do not articulate why the prohibitions are in place. Nevertheless, observers have speculated that the prohibition may be related to potential increases in mandatory or discretionary costs associated with certain risk-pool adjustments to FEHB and expansion of the TRICARE program.

As the House of Representatives considered the FY2007 NDAA, as reported by the House Armed Services Committee, the Office of Management and Budget issued a Statement of Administration Policy (SAP) that expressed cost concerns with the proposal to expand to TRS. The SAP noted:

â¦ the Administration strongly opposes Section 709, which expands TRICARE eligibility to all Selected Reserve members and their families and dramatically worsens the fiscal situation by increasing the government subsidy for non-mobilized reservists and their families at an estimated cost of $400 million in FY 2007 and $3.6 billion from FY 2007 through FY 2011. By FY 2011, it is estimated that the annual cost for this expanded benefit will reach $1.2 billion. It is critical for Congress to eliminate these unfunded expansions and work with the Administration to place the system on a sound fiscal foundation.

6. What health insurance options are available to those prohibited from enrolling in TRS or TRR?

Reservists, qualified retired reservists, or their family members subject to the statutory prohibitions may obtain health insurance coverage, if eligible, through any of the following health insurance options:

FEHB; Medicaid; private individual health insurance; or employer-sponsored insurance (e.g., personally or as offered through a spouse's employer).

Reservists serving in a federal active duty status for greater than 30 days are eligible to participate in TRICARE programs for active duty servicemembers, including TRICARE Prime.

7. What are the premium rates for the FEHB program?

The FEHB program establishes several premium rates based on geographic location, coverage option, and federal employee category. The monthly average premium rates (non-USPS employee and annuitant) for calendar year 2019 are listed in Table 2 .

8. What are the potential implications of extending TRS or TRR eligibility to all members of the Selected Reserve and qualified retired reservists?

Parity in TRS or TRR Eligibility for Reservists

Reservists who are eligible for FEHB, for any reason, are disqualified from participation in TRS or TRR. Reservists not employed by the federal government (and not eligible for FEHB) may participate in TRS or TRR.

Certain military service organizations (MSOs) perceive and advocate that the removal of the statutory prohibition for TRS or TRR would create equality among all members of the Selected Reserves or qualified retired reservists. These advocacy groups also note that in doing so, all members of the Selected Reserves would be able to access TRS as a "more affordable option" than FEHB, which has higher premiums and cost shares.

In a 2018 report to Congress on reserve component health care, DOD states that reservists have "expressed strong feelings of discontent with the law that disqualifies Selected Reserve members from purchasing TRICARE Reserve Select (TRS) for themselves or for family members if they are eligible for, or enrolled in, the FEHB program." DOD also noted in its report that reservists "would like Congress to repeal the FEHB exclusion and DOD fully supports its repeal;" however, DOD made no recommendation concerning this issue at the time it produced the report nor has it any time since.

Cost Implications

While expanding TRS or TRR eligibility would have certain cost implications for DOD, there are also cost considerations for other federal agencies that fund FEHB benefits for their respective federal employees. In June 2019, CBO published a cost estimate of a proposal to remove the TRS prohibition starting in 2030âSection 703 of the FY2020 NDAA ( H.R. 2500 ; as reported by the House Armed Services Committee). Overall, there would be an estimated savings to the federal government. However, given certain statutory or House pay-as-you-go (PAYGO) rules, increases in mandatory spending must be offset by "direct spending cuts, revenue increases, or a combination of the two," rather than by savings in discretionary spending. CBO estimates that expanding TRS eligibility would produce an increase in mandatory costs, noting that:

Because members of the Selected Reserve are younger and healthier than the average federal employee, reservists and their family members who discontinue FEHB coverage would cause an increase in premiums for all remaining FEHB beneficiaries, including federal retirees and active postal employees, whose premiums are paid from mandatory accounts. When implemented, CBO estimates this section would increase direct spending by about $40 million each year beginning in 2030.

Concurrently, CBO also estimates there would also be savings in discretionary spending, greater than the increase in mandatory costs:

On net, CBO estimates section 703 would eventually reduce discretionary costs to the government by about $250 million per year beginning in 2030 because the cost of TRS is less than the government's share of the premium for FEHB. Section 703 would also affect spending for other FEHB beneficiaries.

Beneficiary Satisfaction

DOD asserts that reservists and their spouses "show satisfaction with the TRICARE program in general, and TRS in particular." Beneficiaries enrolled in TRS are reportedly satisfied with their TRICARE plan and the quality of health care provided. For example, DOD observed in the 2014 Survey of Reserve Component Spouse s that 48% found "no difference" between TRS and civilian health insurance plans. DOD also observed that 32% of survey participants believed that TRS provides "better" or "much better" health care than civilian health plans. Similar results can be found in certain MSO-conducted surveys of beneficiaries.

While many TRS enrollees express a general satisfaction with their TRICARE plan, some beneficiaries have described certain challenges, such as:

difficulty in finding health care providers and facilities that accept TRICARE; maintaining continuity of care for a family member when a reservist is activated and ordered to active duty; and having to reenroll in TRS after a reservist transitions from active duty to the Selected Reserve.

9. Has Congress previously considered extending TRS or TRR eligibility?

Since the creation of TRS and TRR, Congress has considered a number of proposals to eliminate the statutory prohibitions described above (see Table 3 ). To date, none of the proposals have been enacted.