Originally created 07/03/97

Report: Offer free prescriptions to military retirees

WASHINGTON - Offering free prescriptions by mail order would be the most cost-effective way to fill a major gap in health coverage for older military retirees, according to a new federal government report.

But organizations that represent military retirees see the prescription plan as little more than a Band-Aid on a much larger problem, and question the price tags the General Accounting Office study put on more far-reaching solutions.

The GAO report concluded that offering free prescriptions by mail would cost a relatively modest $229 million per year. Providing full health benefits to older military retirees by having the Department of Defense supplement their Medicare coverage would drive up the annual cost to between $1.6 billion and $2.2 billion, the GAO said.

"The mail-order pharmacy option would address a significant gap in older retirees' health coverage - Medicare's lack of outpatient prescription drug coverage," the report said. "(It) would reduce prescription expenses for retirees living far from military pharmacies."

Health coverage for older military retirees is of particular concern in Georgia, where veterans make up 9.2 percent of the population. Only 11 states have more veterans than the 677,200 Georgians who have served in the military.

Last year, the DOD switched from an insurance-based health system to managed care. But military retirees who are 65 or older are not eligible to join the new Tricare program.

That flies in the face of the military's tradition of providing lifetime care to service personnel, which has prompted members of Congress to introduce a variety of bills designed to fix the problem.

"The recruits were promised free medical care for life," said John Stone, a spokesman for Rep. Charlie Norwood, R-Ga. "Now at 65, we tell them `No, you've got Medicare,' just like a draft dodger."

Dr. Norwood introduced legislation last year that would have allowed older military retirees to join the Tricare system, with the DOD reimbursing Medicare for the costs of their treatment at medical facilities. While the measure didn't come up for a vote, the Senate has included a limited test of so-called Medicare subvention in the 1998 budget.

Supporters say the test would help decision-makers determine how much such a program would cost. The GAO report said a lack of DOD data made the cost of Medicare subvention impossible to estimate.

The American Legion dismisses the mail-order prescription option because it doesn't address such major health-care costs as hospitalization.

Both the Legion and The Retired Officers Association see advantages in allowing older military retirees to enroll in the health plan available to federal civil servants, another option examined by the GAO. But Mike Duggan, an assistant director with the Legion, said it wouldn't work unless the risk pool is widened to younger military retirees.

"The older retirees are the ones with the most medical expenses," he said. "You have to offer it to the younger retirees, or it's too expensive."

The GAO estimated that offering the civil-service employee plan to older military retirees would cost $1.6 billion per year, based on a projection that 83 percent of the eligible population would sign up.

But Paul Arcari, director of governmental relations for The Retired Officers Association, said that only 33 percent to 50 percent would be likely to participate because many retirees wouldn't switch from private-sector policies. The association is pushing for a limited test to get a better fix on the likely participation rate.

Mr. Arcari gave the prescription plan a lukewarm endorsement as an "interim step." He said the long-term solution probably lies in a combination of approaches, including Medicare subvention.


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