American members of the armed forces are set to battle a sneaky new enemy: rising healthcare costs.
Health insurance premiums and prescription drug copays are set to jump for some members of the U.S. military and their families in 2022.
Tricare, the government-run health care system for uniformed service members, retirees and their families, will raise premiums for several plans on Jan. 1, 2022. The rate hikes, which mainly impact retired reservists and family members of service members, include an 11.5% increase for enrollees of the Young Adult Prime program.
Meanwhile, some members of the military will also pay anywhere from $1 to $8 more for prescription drugs. U.S. Public Health Service Cmdr. Teisha Robertson, a pharmacist with the Defense Health Agency’s Pharmacy Operations Division, said in a statement that the prescription drug hikes are needed to “help fund improvements in military readiness and modernize the Tricare healthcare benefit.”
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Tricare Premiums on the Rise
The rising health insurance premiums will mostly affect retired reservists, service members transitioning out of the military and young adults with Tricare coverage. The rate hikes were published in the Tricare Operations Manual in September.
Individuals and families enrolled in the Tricare Retired Reserve plan will see their monthly premiums rise 3.6%, while those enrolled in the Tricare Young Adult Select plan will pay 3.1% more per month in 2022. Tricare Young Adult (TYA) Prime enrollees face one of the steepest increases in monthly premiums, which will go from $459 in 2021 to $512 in 2022. The TYA Prime plan is for the adult children of eligible sponsors who otherwise do not have access to an employer-sponsored health plan.
The Continued Health Care Benefit Program (CHCBP), which temporarily covers members who will lose Tricare eligibility within three years, also saw its quarterly premiums jump significantly on Oct. 1. Family premiums rose 11.6% from $3,605 to $4,079, while individual enrollees saw their quarterly premiums rise 3.4% from $1,599 to $1,654. CHCBP acts as a bridge between person’s military health benefits and their civilian health plan.
Of course rising health insurance premiums aren’t unique to the military. The annual family premiums of employer-sponsored health insurance jumped 55% between 2010 and 2020, more than twice the rate of both wage growth and inflation during that time, according to the Kaiser Family Foundation.
But premiums aren’t going up for all Tricare beneficiaries. Individual enrollees in the Tricare Reserve Select (TRS) plan will actually see their monthly insurance bills drop by 1%. Families enrolled in the plan will pay 3.8% less per month in 2022 than they did in 2021. The plan is available to qualified reservists and their families.
Prescription Drug Copays Increase
Some Tricare beneficiaries who get their prescription drugs through the network’s home delivery service or at a retail network pharmacy will see their copays rise on Jan. 1, 2022.
The copay increase won’t affect all beneficiaries, though. Active duty service members will still receive prescription medications for free at military pharmacies, retail network pharmacies and through home delivery. Medically retired service members and their families also won’t see a change to their copayments.
But families and retirees will be impacted by the changes. Here are the copay increases for prescription drugs obtained through the Tricare Pharmacy Home Delivery (up to a 90-day supply):
- Generic formulary drugs will increase from $10 to $12
- Brand-name formulary drugs will increase from $29 to $34
- Non-formulary drugs will increase from $60 to $68
Here are the changes being made to the copays for prescription drugs obtained at Tricare retail network pharmacies (up to a 30-day supply):
- Generic formulary drugs will increase from $13 to $14
- Brand-name formulary drugs will increase from $33 to $38
- Non-formulary drugs will increase from $60 to $68
Tricare notes that military pharmacies remain the lowest cost option for beneficiaries. Covered generic drugs and brand-name medications will remain free at military pharmacies.
Bottom Line
Some current and former members of the military may see their health insurance premiums and/or prescription drug copays increase in 2022. Premiums are set to rise for retired reservists, service members transitioning out of the military and young adults. Meanwhile, prescription drug copays are also set to increase anywhere from $1 to $8 per medication for certain Tricare beneficiaries who use home delivery or retail network pharmacies, but not active duty service members.
Tips for Managing Healthcare Costs
- Health savings accounts can be valuable assets when it come to saving and ultimately paying for medical care. Contributions are tax deductible and can be spent tax-free, provided they are used on qualified health expenses. However, there’s a limit to how much you can contribute to an HSA each year. You’ll also need to be enrolled in a high deductible health plan to be eligible for one.
- A financial advisor may be able to help you budget better for future health care expenses. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors in your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor, get started now.
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