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Updated December 18, 2019
Defense Primer: Military Health System
The Department of Defense (DOD) administers a statutory
Beneficiaries
health entitlement (under Chapter 55 of Title 10, U.S.
In FY2018, there were 9.51 million total MHS beneficiaries
Code) through the Military Health System (MHS). The
(see Figure 1).
MHS offers health care benefits and services through its
Figure 1. MHS Beneficiaries, FY2018
TRICARE program to approximately 9.5 million
beneficiaries composed of servicemembers, military
retirees, and family members. Health care services are
available through DOD-operated hospitals and clinics,
referred to collectively as military treatment facilities
(MTFs), or through civilian health care providers
participating in the TRICARE program.
Purpose
The fundamental reason for an MHS is to support medical
readiness. The medical readiness mission involves
promoting “a healthy and fit fighting force that is medically
prepared to provide the Military Departments with the
maximum ability to accomplish their deployment missions
throughout the spectrum of military operations.” The MHS
also serves to “create and maintain high morale in the
uniformed services by providing an improved and uniform
program of medical and dental care for members and
certain former members of those services, and for their
dependents” (10 U.S.C. §1071). In addition, the resources
of the MHS may be used to provide humanitarian assistance
Source: Defense Health Agency, Evaluation of the TRICARE Program:
(10 U.S.C. §401) and to perform medical research (10
Fiscal Year 2019 Report to Congress, Washington, DC, 2019, p. 21.
U.S.C. §2358).
Note: Numbers may not add up to total because of rounding.
Organization
Military Treatment Facilities (MTFs)
The Under Secretary of Defense for Personnel and
On October 1, 2018, administration and management of the
Readiness (USD[P&R]) is the principal staff assistant and
MTFs began to transfer from each Military Department to
advisor to the Secretary and to the Deputy Secretary of
the DHA. The DHA administers all MTFs in the U.S.,
Defense, for Total Force Management as it relates to
while each respective Service Surgeon General administers
readiness issues, including health affairs (see 10 U.S.C.
the overseas MTFs. These facilities provide a wide range of
§136).
clinical services depending on size, mission, and level of
Key MHS Organizations
capabilities. MTFs provide inpatient and outpatient medical
care and dental services. There are 723 MTFs, with 109
located overseas. The facilities are generally on or near a
Office of the Assistant Secretary of Defense for
U.S. military base and are typically staffed by military, civil
Health Affairs (OASD[HA])
service, and contract personnel.
Defense Health Agency (DHA)
TRICARE Options
Surgeons General of the Army, Navy, and Air
With the exception of active duty service members (who
Force
are assigned to the TRICARE Prime option and pay no out-
of-pocket costs for TRICARE coverage), MHS
The Assistant Secretary of Defense for Health Affairs
beneficiaries may have a choice of TRICARE plan options
(ASD[HA]) reports to the USD(P&R). The ASD(HA) is the
depending upon their status (e.g., active duty family
principal advisor to the Secretary of Defense on all "DOD
member, retiree, reservist, child under age 26 ineligible for
health policies, programs and activities" and has primary
family coverage, Medicare-eligible, etc.) and geographic
responsibility for the MHS (see DOD Directive 5136.01).
location. Each plan option has different beneficiary cost-
Reporting to the USD(P&R) through the ASD(HA), the
sharing features. Cost sharing may include an annual
Defense Health Agency (DHA) is a joint combat support
enrollment fee, annual deductible, monthly premiums,
agency whose purpose is to enable the Army, Navy, and Air
copayments, and an annual catastrophic cap. Pharmacy
Force medical services to provide a medically ready force
copayments are established separately and are the same for
and a ready medical force to combatant commands in both
all beneficiaries under each option. The current major plan
peacetime and wartime.
options are listed below.
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Defense Primer: Military Health System
TRICARE Prime
to the DHA by September 30, 2021, while other reforms are
TRICARE Prime is a health maintenance organization
ongoing.
(HMO)-style option in which beneficiaries typically get
Reductions in Military Medical Personnel
most care at an MTF. Certain retirees may be eligible to
DOD’s budget request for FY2020 includes a plan to
enroll in this option if they live within or near a designated
reduce its active duty medical force by 22% (17,991
Prime Service Area. TRICARE Prime features an annual
personnel) in order to “support the National Defense
enrollment fee for retirees but does not have an annual
Strategy.” DOD’s plan to implement these reductions
deductible and has minimal copayments.
would: (1) transfer UMB-funded positions from the MHS to
TRICARE Select
new health service support positions in deployable or
TRICARE Select is a self-managed, preferred-provider
warfighting units, military service headquarters, or
option. This plan allows beneficiaries greater flexibility in
combatant commands; (2) transfer personnel billets from
managing their own health care and typically does not
the MHS to the Military Departments for repurposing as
require a referral for specialty care. Eligible beneficiaries
nonmedical billets; and (3) convert certain military
must enroll annually and may be subject to an enrollment
positions to civilian positions.
fee, annual deductible, and copayments depending on their
Sustaining Wartime Medical Readiness Skills
status. Lower out of pocket costs are associated with care
As U.S. combat operations decline, sustaining readiness of
delivered by a TRICARE network provider.
the medical force remains an ongoing challenge for DOD.
TRICARE for Life
The FY2017 NDAA created new authorities for the
In general, certain retired TRICARE beneficiaries must
Secretary of Defense to expand partnerships with certain
enroll in Medicare and pay Medicare Part B premiums in
civilian health care systems and Veterans Affairs medical
order to retain TRICARE coverage. The coverage provided
facilities and to expand access to care at MTFs to non-
is known as TRICARE for Life. There is no enrollment fee
beneficiaries for the purposes of preserving core clinical
or premium and beneficiaries pay no out-of-pocket costs for
competencies, combat casualty care capabilities, and
services covered by both Medicare and TRICARE for Life.
enhancing wartime medical readiness skills.
Budget
Implementing a New Electronic Health Record
Congress funds the MHS through several defense
In 2015, DOD awarded a $4.3 billion contract to develop a
appropriations accounts, including the Defense Health
modern, interoperable electronic health record that can be
Program (within the Operation & Maintenance account),
used in all care settings, including austere operational
Military Personnel, Military Construction, Medicare-
environments and in MTFs. Initial deployment of this
Eligible Retiree Health Care Fund (MERHCF), and
system began in February 2017 in the Pacific Northwest
Overseas Contingency Operations (OCO). Together, DOD
and is designed to be a multi-year rollout across the MHS
refers to these funds as the Unified Medical Budget (UMB).
through 2024.
The UMB does not include health-related spending or
personnel covered by other defense accounts or medical
Relevant Statutes and Regulations
research performed by the Defense Advanced Research
Title 10, U.S. Code, Chapter 55 – Medical and Dental Care
Projects Agency or other military research agencies. The
FY2020 request for the UMB is $49.5 billion—about 6.9%
Title 10, U.S. Code, Chapter 56 – Department of Defense
of DOD’s total budget. The request includes $33.3 billion
Medicare-Eligible Retiree Health Care Fund
for the Defense Health Program, of which $9.6 billion
Title 32, Code of Federal Regulations, Part 199 – Civilian Health
would be for “In-House Care” (also called “Direct Care”)
and Medical Program of the Uniformed Services
and $15.3 billion would be for “Private Sector Care.” Also
included in the request are $8.1 billion in the Military
CRS Products
Personnel account, $0.3 billion for Military Construction,
CRS Report R45399, Military Medical Care: Frequently Asked
and $7.8 billion for accrual payments to the MERHCF.
Questions, by Bryce H. P. Mendez
Current Challenges
CRS In Focus IF11206, FY2020 Budget Request for the Military
There are a number of perceived areas for potential
Health System, by Bryce H. P. Mendez
improvement within the MHS, many of which have
CRS Insight IN11115, DOD’s Proposal to Reduce Military Medical
attracted congressionally directed reform efforts and
End Strength, by Bryce H. P. Mendez
ongoing oversight activities.
CRS Report R45987, MHS Genesis: Background and Issues for
MHS Modernization
Congress, by Bryce H. P. Mendez
The FY2017 NDAA (and subsequent legislation) directed
several modernization efforts, including: (1) reassignment
Other Resources
of responsibilities for administering MTFs from each
DHA, Evaluation of the TRICARE Program: Fiscal Year 2019 Report
respective Service Surgeon General to the DHA Director;
to Congress, 2019.
(2) evaluation and realignment of MHS staffing to the
DHA; and (3) evaluation and restructuring the mission and
scope of each MTF. Congress directed these reforms to
streamline the MHS, enhance medical force readiness,
Bryce H. P. Mendez, Analyst in Defense Health Care
improve access and quality of care, and create a better
Policy
experience for beneficiaries. DOD must transfer the MTFs
IF10530
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Defense Primer: Military Health System
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