MILITARY HEALTH CARE: TRICARE Cost-Sharing Proposals Would Help Offset Increasing Health Care Spending, but Projected Savings Are Likely Overestimated

In light of the fact that Department of Defense DOD health care spending more than doubled from 2000 to 2005 and continues to escalate, DOD proposed increasing the share of health care costs paid by TRICARE beneficiaries, under a proposal known as Sustain the Benefit. DOD estimated that if the proposal had been implemented in fiscal year 2007, savings would amount to over 11 billion through fiscal year 2011. As required by the National Defense Authorization Act for 2007, GAO evaluated 1 the likelihood that DOD would achieve its estimated savings from the proposed enrollment fee and deductible increases for retirees and dependents under age 65, 2 the likelihood that DOD would achieve its estimated savings from the proposed pharmacy co-payment increases for all beneficiaries except active duty personnel, and 3 the factors identified by DOD as contributing to increased TRICARE spending from 2000 to 2005. To conduct its work, GAO examined DOD analyses and interviewed DOD officials. GAO also analyzed data on many aspects of health care costs in general and interviewed health economists.