Tricare pharmacy clients get a reprieve on co-pay hikes

Published: Monday, September 17, 2012, 12:01 a.m.

The 112th Congress has reconvened after a five-week recess, primarily to pass a continuing appropriation resolution that will allow federal departments, including defense, to continue to spend at 2012 budget levels until new funding bills are passed after the Nov. 6 election.

The measure that both chambers are expected to approve next week, before lawmakers resume campaigning, would expire March 27. That date, however, does not remove the threat of budget sequestration on Jan. 2 when deep, across-the-board cuts in federal programs are scheduled to take effect unless Republicans and Democrats can cut a major deficit-reduction deal.

The measure will allow the House and Senate to delay passing a final defense authorization for fiscal 2013, which begins Oct. 1. And that is where the reprieve occurs for users of the Tricare pharmacy benefit.

Both the House and Senate versions of the defense bill block the Obama administration's plan to increase Tricare enrollment fees for military retirees, but they would allow hefty increases in co-pays at Tricare retail pharmacies and through mail order or "home delivery" program.

Language in the House bill (HR 4310) is more favorable to beneficiaries, allowing only part of co-pay increases sought by the Department of Defense. Out-of-pocket costs for drugs dispensed at retail pharmacies in the Tricare network would increase from $12 to $17 on brand name drugs listed on the military formulary. Co-pays for non-formulary brand name drugs would climb from $17 to $44.

For mail order, the House plan would increase the co-pay for a 90-day supply of brand name drugs on the formulary from $9 to $13, while the $25 co-pay for non-formulary drugs would jump to $43. There would be no cost for generic drugs by mail order and the charge would be $5 at retail outlets.

The House bill also would allow annual increases in these drug co-pays beginning Oct. 1, 2013, but these adjustments would be capped to the percentage rise in cost-of-living adjustments for military retired pay.

The House also would require Defense to conduct a pilot program for five years on Tricare for Life users -- beneficiaries age 65 and older. They would be required to obtain refills of all maintenance drugs through the mail order pharmacy. They could opt out of this arrangement after a year. Also, the mail order requirement for life beneficiaries could be waived, on an individual basis, if personal circumstances warrant.

These House-passed changes were to take effect Oct. 1 to save the Department of Defense an estimated $590 million in the new fiscal year. But that is likely to be delayed given stalled progress toward passing a final bill.

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Tricare pharmacy clients get a reprieve on co-pay hikes