Mandatory Spending

Function 550 - Health

Introduce Enrollment Fees Under TRICARE for Life

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

Billions of Dollars 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2021–
Change in Outlays  
  MERHCF 0 0 -1.2 -1.9 -2.4 -2.6 -2.8 -2.9 -3.1 -3.2 -5.5 -20.1
  Medicare 0 0 0.2 0.5 0.7 0.8 0.8 0.8 0.9 0.9 1.4 5.6
  Total 0 0 -1.0 -1.4 -1.7 -1.8 -2.0 -2.1 -2.2 -2.3 -4.1 -14.5

This option would take effect in January 2023.
MERHCF = Department of Defense Medicare-Eligible Retiree Health Care Fund.

TRICARE for Life (TFL) is a supplement to Medicare for military retirees and their Medicare-eligible family members. Beneficiaries who are eligible for TRICARE are automatically enrolled in TFL, and there are no enrollment fees (although beneficiaries must pay their premium for Medicare Part B, which covers physicians’ and other outpatient services).

This option would require most Medicare-eligible beneficiaries who choose to enroll in TFL to pay an annual enrollment fee of $550 for individual coverage or $1,100 for family coverage. (Members who received a disability retirement and survivors of members who died on active duty would not be required to pay the fee.) The enrollment fees would be set to match the Congressional Budget Office’s estimate (for 2023) of the fees for the preferred-provider plan in TRICARE paid by retirees who are not yet eligible for Medicare and who entered service after 2017. The enrollment fees would be indexed to grow at the same rate as average Medicare costs in later years. This option would result in some beneficiaries switching to other Medicare supplemental plans, which would cause Medicare spending to increase because some costs currently paid by TFL would shift to Medicare.