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Health Care Reform: Does it Affect TRICARE?


After great huffing and puffing by both major political parties, and a challenge mounted by 26 state attorneys general that went all the way to the Supreme Court, The Patient Protection and Affordable Care Act was declared constitutional by a narrow 5-4 majority – under the taxing authority of Congress authorized under the Constitution.

Among other provisions, the new law established a universal mandated to buy health insurance, enforced “barely” by a penalty for noncompliance of $95 in the first year of implementation in 2014, and going up from there. The law also prohibited health insurance companies from discriminating against applicants with pre-existing medical conditions beginning in the fall of 2010, and makes that prohibition universal as of 2014. Insurance companies must also continue accepting adults on their parents’ plans up to the age of 26, if the adult child is enrolled full-time in college.

The law also requires insurance companies to cover certain screening, testing and preventative health care procedures for free.

These provisions and others in the law will have tremendous effect on health insurance plans in the private sector – and the civilian employers who sponsor them. But how will this affect TRICARE?

For most military families, not much. The existing versions of TRICARE, in the main, already met the standards on health care plans imposed by the mandate. Any uniformed service member and qualified dependents can enroll in TRICARE, regardless of medical history. So the requirement to accept all comers without regard to medical underwriting was already satisfied.

Testing, screening and preventive care is also readily available through TRICARE at little or no cost, so TRICARE was also already in compliance with the law in that regard.

The major new development in TRICARE, prompted indirectly by the Affordable Care Act, was the implementation of TRICARE Young Adult, or TYA. However, the National Defense Authorization Act signed in 2011 required TRICARE officials to quickly set up a program to expand TRICARE eligibility to qualified military dependents up to age 26.

To qualify for the program, the dependent must be under age 26, unmarried, and not eligible for their own employer-sponsored health insurance plan.

According to TRICARE, the program had more than 17,000 beneficiaries – 11,171 in TYA Standard, and another 6,407 enrolled in TYA Prime, as of the end of May 2012.

Eligibility

To enroll in TYA, a dependent must be at least age 21, but not over age 26, unmarried, unable to enroll in an employer plan on his or her own, not otherwise eligible for TRICARE (for example, as a uniformed service member) and sponsored by someone in the following service categories:
  • Active duty service members
  • Retired service members
  • Activated Guard/Reserve members
  • Non-activated Guard/Reserve members using TRICARE Reserve Select
  • Retired Guard/Reserve members using TRICARE Retired Reserve
If the dependent is enrolled in a full course of study at an approved institution of higher learning and the sponsor is providing more than 50 percent of the financial support for the student, eligibility for TYA may not begin until age 23 or upon graduation, whichever comes first.

Don’t Have an ID Card?

No problem: You can enroll in TRICARE Young Adult without a current military ID card. Once you complete the application, you will receive an enrollment card in the mail. Take your enrollment card to the nearest DEERS office, with other standard forms of identification, and you can get a dependents’ military ID card reissued.

How Much Does It Cost?

This stuff ain’t cheap.

As of mid-2012, the monthly premium for TRICARE Young Adult Standard was $176 per month. The monthly premium for TRICARE Prime is $201 per month.

Why is it so expensive? In part because deductibles are so low. In addition, most people in this age group are generally healthy. Healthy people can frequently enroll in individual plans, or via a school-sponsored group plan, for much less money. The people who can’t get coverage elsewhere go back to TRICARE, in a phenomenon called “adverse selection.” The same phenomenon affects COBRA premiums as well – the program to extend workplace insurance plans for private sector workers and dependents who lose their workplace group health insurance coverage.

Should I Buy It?

A lot of young people go “naked.” That is, they go without coverage. That may be a rational strategy after 2014, because you can buy insurance when you need it, and the penalty for not buying health insurance is very low compared to paying premiums. (This is one of the serious flaws in the health reform bill, and is going to lead to a massive amount of red ink, according to the Congressional Budget Office.)

But for now, going naked is plain stupid. I wouldn’t recommend taking gambles you can’t afford to lose. Students can deliver pizzas to come up with a couple hundred bucks a month. It’s a lot different delivering pizzas to cover the cost of a $50,000 to $100,000 cancer course of treatment. That could drive students into bankruptcy before they even really get started.

The covered benefits are fairly generous under TRICARE. But most students at large campuses have access to free or reduced-cost basic medical services. Those at large colleges and universities may be better off taking advantage of these services via their school plans, or purchasing a policy with a fairly high deductible that’s designed to cover catastrophic care only.

Premiums vary substantially by state, though, and even by zip code. So shop around and get some quotes on an individual policy. High-deductible policies on healthy people in their 20s are generally very affordable. Pocket the difference, and use it to reduce the amount of student loans you have to take out, or stick it in a health savings account while you still can.

If the applicant has a medical history that causes him or her to get “rated up” or declined by insurers, you may still be able to get coverage via the school plan. But in this instance, TRICARE Young Adult may be worth a look.

Think ahead, though: What happens when the applicant turns 26? Where will coverage come from then? If the 26th birthday falls before January 1, 2014, there should be no problem, in theory. Even with a pre-existing condition, you can go to the state exchange and get an individual plan without being discriminated against for your pre-existing condition.

But a number of Republican governors have already stated they will not be setting up the health insurance exchanges the PPACA calls for at the state level. What happens then is still unclear, and will likely result in another round of litigation.

Also, the law may well be repealed: Because the Supreme Court blessed off on the Constitutionality of ObamaCare under the taxing authority, and not under the Commerce Clause, and defined the fee for non-compliance with the mandate as a tax and not a penalty, the Court defined ObamaCare as a revenue measure. And revenue bills don’t need a 60-vote majority in the Senate to overcome a filibuster.

This makes the law much easier to overturn. The Republican-led House of Representatives has already voted to repeal the bill. If the Republicans maintain control of the House (likely) and if they win the White House and pick up just a few seats in the Senate (entirely possible), repealing the PPACA will be among the first items on their agenda.

For this reason, don’t count on being able to buy health insurance regardless of pre-existing conditions come 2014. There are too many possible eventualities that would change that. Get catastrophic coverage, and keep it.


Contributed by Jason Van Steenwyk

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