Proposal would help offset hikes

Late-hour speeches by Republican Sens. Tom Coburn (Okla.) and John McCain (Ariz.) on runaway military health costs led the Senate Tuesday to shelve a defense bill amendment that would have spared family members and retirees more burdensome co-pays on drug prescriptions filled off base.

The timing of their opposition, in the last hours of consideration of the 2013 defense authorization bill when amendments were only being approved by unanimous consent, allowed Coburn and McCain to block the Senate from supporting the softer House-passed plan for raising prescription fees.

There will be a second chance next week when House-Senate conferees iron out differences in separate versions of the defense bill. But Coburn and McCain, using fresh scoring of costs from the Congressional Budget Office, were able to raise new doubts among some senators over the long-term cost implications of adopting the House plan.

"We are going to have to find ways to bring these costs under control and still, at the same time, provide our veterans with the benefits they have earned," McCain said, in arguing against the House plan which was presented as an amendment from Sens. Jack Reed (D-R.I.), Marco Rubio (R-Fla.) and Claire McCaskill (D-Mo.).

The reality is that pharmacy co-pays will rise this spring for family members and retirees. By how much will be determined by a House-Senate conference committee that will be meeting next week behind closed doors.

The Senate defense bill, passed 98-0, now has no language to block or alter the Obama administration's drug co-pay plan. Under it, drugs dispensed on base would stay free, and co-pays for generics in retail outlets would remain $5. But co-pays for brand names at retail on the military formulary would jump to $26 from $12. Non-formulary drugs, which cost TRICARE more, would no longer be dispensed at retail, only through mail order. Co-pays for brand names at mail order would pop to $26 from $9, but mail order prescriptions usually are for 90 days versus 30 at retail.

The administration also wants co-pays adjusted by $2 annually until they reach $34 in 2016. After that, the pharmacy fees off base would be adjusted annually to keep pace with medical inflation.

The House plan, which military associations helped to design, allows more modest initial increases in drug fees and would tie annual increases thereafter to the percentage rise in military retired pay. This plan would at least match health cost savings of the administration's plan by requiring elderly beneficiaries to use mail order to refill maintenance drugs, at least for a year.

Tom Philpott can be contacted at Military Update, P.O. Box 231111, Centreville, Va. 20120-1111, or by e-mail at:

[email protected]