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American Forces Press Service

Rumsfeld, Pace Support Tricare Changes

By Donna Miles
American Forces Press Service

WASHINGTON, May 19, 2006 The Defense Department's top leaders today defended proposed changes in the Tricare fee system, telling a Pentagon town hall audience the increases are essential to keeping the system solvent and strong.

Click photo for screen-resolution image
Defense Secretary Donald Rumsfeld and Joint Chiefs Chairman Marine Gen. Peter Pace talked about Tricare at their Pentagon town hall meeting May 19. Today, users pay just about 12 percent of the bill, and the government pays 88 percent, a formula Pace said can't sustain itself. Photo by Petty Officer 1st Class Chad McNeeley, USN   (Click photo for screen-resolution image);high-resolution image available.
Tricare "was a great program" when Congress passed the legislation creating it in 1995, "and it is today a great program," Marine Gen. Peter Pace, chairman of the Joint Chiefs of Staff, said in response to a question from the audience about Tricare benefits.

Recommended changes will help ensure Tricare remains a great program 10, 15, 20 years from now, he said. "What we have recommended is that we re-norm today's premiums to the level that they were in 1995," Pace explained. "In 1995, the individual was paying, on norm, about 27 percent, and the government was paying about 73 percent of the bill."

Today, users pay just about 12 percent of the bill, and the government pays 88 percent, a formula Pace said can't sustain itself.

"If we do not get back to a more rational way of sharing the cost, we will kill this golden goose," he said. Defense Secretary Donald Rumsfeld assured audience members they have "the best program in the world" and will continue to receive great medical assistance through Tricare.

He warned, however, that they should expect to pay "some modest increase" more over time as rising costs and inflation drive up the health care bill.

"(To) anyone who says that the proposals that were made to Congress are in any way unfair or excessive, they're not," Rumsfeld said. "They are very modest increases." And they're the only way to ensure DoD will be able to sustain what he called "a terrific health-care program."

The proposed changes, part of the president's fiscal 2007 defense budget request, won't change the benefits military beneficiaries receive under the program. They affect enrollment costs and other fees paid by military retirees served by Tricare.

DoD officials estimate that if the fee system is not changed, the health system will take up 12 percent of the DoD budget, at $64 billion, by 2015.

Donald H. Rumsfeld
Gen. Peter Pace, USMC

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Updated: 19 May 2006
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