Local Military News

Tricare for young adults carries high premium

Adult children of military members and retirees now can buy Tricare health insurance coverage out to age 26, and the coverage can be purchased back to Jan. 1, 2011.

The cost is steep, however, with the premium set at $186 a month, or $2,232 a year, for coverage under the fee-for-service Tricare Standard plan or the preferred provider network offered under Tricare Extra.

No other Standard and Extra beneficiaries have to pay a premium. But in approving Tricare Young Adult, Congress mandated the premium be set high enough to cover the entire cost. That includes both for medical services and internal administrative costs. So Tricare officials said they had no other choice than to set premiums at these levels.

Given the premiums, Tricare officials project only a modest "take rate" the first year of about six percent, or about 14,000 participants out of an eligible population of 233,000 young adult dependents.

For now, Tricare Standard will be the only TYA option. Tricare Prime will become another option for TYA enrollees effective Oct. 1, the start of the new fiscal year. But to use Prime, young adults will have to live in areas where a Tricare managed-care network is available.

The monthly premium for TYA Prime will be $213, or $2,556 a year, not counting Prime co-pays. That is more than five times what a military family pays to enroll in Tricare Prime.

There will be no retroactive coverage back to January 2011 offered under the TYA Prime option when it begins in October.

Families with multiple children between age 21 and 26 won't get a discount either. Each participant will have to pay the full monthly premium, under either Prime or Standard. Additional features -- cost-shares, deductibles and catastrophic cap protection -- will be based on the sponsor's status and the type of coverage selected.

Retired Navy Chief Hospital Corpsman Henry Popell of Vista, Calif., had wanted TYA Prime to cover his 20-year-old son, Colin, when he completes his studies in a few years. But Popell is reconsidering, given the premium rates, which would total more than $10,000 over four years of coverage eligibility.

"Wow!" said Popell, when we shared with him the rate. "That's a hell of a jump" from what he now pays for covering Colin as a full-time student. "It puts me in a pickle."

In better economic times, Popell said, he would count on his son landing a job with health benefits after graduate school. In this economy, that's not at all certain.

"The burden's going to be on me to provide him with health care because I won't let him go without," he added. "Tricare Prime would be the best way to go. But if we're talking about $2,500 a year, that's a good hunk of money. There would have to be some very compelling reasons for me to continue that (coverage) after he got out of college."

Details on the TYA program were published April 27 in the Federal Register as an "interim final rule." Though the department solicits comments from beneficiaries and interest groups, the program is starting immediately to accept applications and to extend coverage as applications are approved.

The rule explains that assistant secretary of defense for health affairs, Dr. Jonathan Woodson, "had determined that following the standard practice," to delay implementation until after a 60-day comment period, "is unnecessary, impractical and contrary to the public interest."

The final details confirm that Congress failed to deliver to military families what was gained for other families on young adult coverage under the 2009 Patient Protection and Affordable Care Act. As that controversial health reform package moved toward enactment, opponents had warned that it had better not impact prized military health care coverage in any way.

That protectionist posture, however, left military families behind. The health reform law directed other health insurance plans to extend coverage of dependent children out to age 26. Tricare coverage continued to end at age 21 or age 23 for children attending college full time.

Last year the armed services committees considered but rejected the idea of adding TYA as another subsidized feature of the Tricare benefit. That would have added $300 million a year to Tricare costs, which Defense officials complained long have complained are rising dramatically.

So lawmakers opted instead for a full-cost, premium-based Tricare Young Adult program to take effect Jan. 1, 2011.

Congress imposed two other limitations unique to young adult Tricare users versus other American young adults: only unmarried dependents are eligible for TYA; and young adult dependents are disqualified if they are eligible for medical coverage through an employer-sponsored insurance program.

Tricare officials needed longer than expected to write implementing regulations. But TYA applicants who pay premiums of $186 back as far as January can qualify for retroactive coverage under Tricare Standard coverage if young adults can show their medical receipts.

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