GAO: Law Enables Estimated $436 Million TRICARE Savings

The Defense Department estimates a realization of $436 million in health-care cost savings between Oct. 1, 2009, and Sept. 30, 2015, according to a Feb. 16 report by the Government Accountability Office. The Defense Department projects that while the number of retirees and dependents under age 65 would decline by 2 percent per year until 2015, TRICARE costs would rise 8 percent for 2010 and 7 percent annually between 2011 and 2015, because of inflation in medical costs, according to GAO. But the Defense Department could not link any savings directly to a law Congress passed in 2007, which forbade civilian employers from providing incentives to military-retiree employees who opted for health-care coverage under TRICARE instead of company-sponsored plans, according to GAO. “DoD reported that it was not able to determine [the law’s] effects … on TRICARE participation and costs … because of data limitations and multiple factors affecting the health insurance choices of retirees and their dependents under age 65,” GAO wrote. For the same reason, DoD could not determine why retirees chose either TRICARE or employer-sponsored coverage, GAO wrote.