INSIGHTi
TRICARE Cost-Sharing Changes in 2021
November 16, 2020
The Department of Defense (DOD) administers a statutory health entitlement (under Chapter 55 of Title
10, U.S. Code) through the Military Health System (MHS). The MHS offers health care benefits and
services through its TRICARE program to approximately 9.6 million beneficiaries composed of
servicemembers, military retirees, and family members. Health care services are available through DOD-
operated hospitals and clinics, collectively referred to as military treatment facilities (MTFs), or through
civilian health care providers participating in the TRICARE program. The Defense Health Agency (DHA)
manages the TRICARE program, in collaboration with the military departments.
With the exception of active duty servicemembers, beneficiaries are subject to certain cost-sharing
requirements based on beneficiary status, health plan or benefit program, and the sponsor’s initial
enlistment or appointment date. Beneficiary cost-sharing requirements include premiums (i.e., enrollment
fees), deductibles, co-payments, coinsurance, and a catastrophic cap. Periodically, DHA reviews and
adjusts certain beneficiary cost-sharing amounts for the various TRICARE health plans and benefit
programs based on statutory requirements or changes to the cost of coverage. This Insight reviews
changes to TRICARE’s beneficiary cost-sharing amounts that are scheduled to take effect on January 1,
2021.
What TRICARE health plans and benefit programs are
scheduled to have modified cost sharing amounts in
2021?
For calendar year (CY) 2021, DHA is increasing certain beneficiary cost-sharing amounts for the
following TRICARE health plans and benefit programs:
TRICARE Prime;
TRICARE Select;
TRICARE Reserve Select;
TRICARE Retired Reserve;
TRICARE Young Adult; and the
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Continued Health Care Benefit Program.
Certain TRICARE dental plans may also have revised cost-sharing amounts. There are no scheduled
changes to the cost-sharing amounts for TRICARE pharmacy benefits or TRICARE for Life. A detailed
listing of CY2020 and CY2021 cost sharing amounts by health plan or benefit program is available using
the TRICARE compare cost tool.
Why are certain military retirees going to be required to
pay an enrollment fee for TRICARE Select?
Section 701 of the FY2017 National Defense Authorization Act (NDAA; P.L. 114-328) directed certain
reforms to the MHS and the TRICARE program, including the establishment of a new preferred provider
option (PPO), referred to as TRICARE Select, to replace TRICARE Standard, the previous PPO option.
The provision also revised the cost sharing structure for most TRICARE plan options and included
several actions to ease the application of new cost sharing requirements to certain grandfathered
beneficiaries (i.e., non-Medicare-eligible military retirees and their family members) who originally
enlisted or commissioned into military service prior to January 1, 2018. DHA refers to these beneficiaries
as Group A, whereas military retirees (and their family members) who began military service on/after
January 1, 2018 are referred to as Group B.
Prior to these congressionally-directed MHS reform efforts, Group A beneficiaries could participate in
TRICARE’s PPO plan (i.e., TRICARE Standard) and were not subject to mandatory enrollment fees.
Section §1075(e) of Title 10, U.S. Code, directs DOD to establish an annual enrollment fee for Group A
beneficiaries no earlier than 90 days after the Government Accountability Office (GAO) submission of a
report to Congress on certain beneficiary access, satisfaction, and the status of TRICARE reform actions.
GAO delivered its report in February 2020. DOD announced the change on June 22, 2020. It requires
Group A beneficiaries to pay an annual (or monthly) enrollment fee for TRICARE Select beginning on
January 1, 2021. All TRICARE contractors, including Humana Military, HealthNet Federal Services, and
International SOS, are in the process of executing this statutorily-required change. Group B beneficiaries
are not impacted by this change as they have been subject to TRICARE Select enrollment fees since
January 1, 2018. Table 1 compares the 2020 and 2021 TRICARE Select enrollment fees by beneficiary
category.
Table 1. TRICARE Select Annual Enrollment Fees
Calendar Years 2020 and 2021
2020
2021
(Individual/Family)
(Individual/Family)
Active Duty Family Member
$0 / $0
$0 / $0
Group A Beneficiaries
$0 / $0
$150 / $300
Group B Beneficiaries
$471 / $942
$474 / $948
Source: 10 U.S.C. §1075(e); DOD, “TRICARE Costs and Fees 2020,” October 2020, https://tricare.mil/Costs; and DOD,
“TRICARE Select Enrol ment Fees,” accessed October 30, 2020, https://tricare.mil/Plans/Enrol /Select/Enrol mentFees.
Notes: DHA also al ows TRICARE Select enrol ees to pay the enrol ment fee in equal monthly payments.
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How does DHA determine the change in cost-sharing
amounts?
DHA generally adjusts the TRICARE beneficiary cost-sharing amounts based on (1) specified amounts
established in federal statutes; (2) statutory formulas; or (3) actuarial adjustments equal to the cost of
coverage. Table 2 specifies the method by which DHA determines periodic adjustments to beneficiary
cost-sharing amounts.
Table 2. Adjustment Methods used for TRICARE enrollee cost-sharing amounts
Health Plan or Benefit Program
Adjustment Method
Authority
TRICARE Prime
Amounts specified in statute and statutory formula
10 U.S.C. §1075a
TRICARE Select
Amounts specified in statute and statutory formula
10 U.S.C. §1075
Enrol ment fee: actuarial adjustment
TRICARE Reserve Select
10 U.S.C. §1076d
Other cost-sharing amounts: mirrors TRICARE Select
Enrol ment fee: actuarial adjustment
TRICARE Retired Reserve
10 U.S.C. §1076e
Other cost-sharing amounts: mirrors TRICARE Select
Enrol ment fee: actuarial adjustment
TRICARE Young Adult (Prime or Select) Other cost-sharing amounts: mirrors TRICARE Prime 10 U.S.C. §1110b
or TRICARE Select
Enrol ment fee: actuarial adjustment
Continued Health Care Benefit Program
10 U.S.C. §1078a
Other cost-sharing amounts: mirrors TRICARE Select
TRICARE Pharmacy
Amounts specified in statute and statutory formula
10 U.S.C. §1074g
DHA-administered dental benefit: actuarial adjustment
10 U.S.C. §1076a
TRICARE Dental
Federal Employee Dental and Vision Insurance
Program: actuarial adjustment
5 U.S.C. §8958
Source: See various statutes in Chapter 55 of Title 10 and Chapter 89A of Title 5, U.S. Code.
Notes: DHA makes actuarial adjustments based on enrol ment-weighted average annual costs of previous calendar years
and projected administrative and health care costs. For more on how DHA makes actuarial adjustments, see
https://www.health.mil/Reference-Center/Policies/2019/06/13/Methodology-Determination-of-2020-Premium-Rates-for-
TRICARE-Reserve-Select. Certain beneficiaries are eligible for dental benefits through the Federal Employee Dental and
Vision Insurance Program (FEDVIP). FEDVIP annually adjusts its cost-sharing amounts in accordance with Chapter 89A of
Title 5, U.S. Code, Part 894 of Title 5, Code of Federal Regulations, and Office of Personnel Management policies.
Author Information
Bryce H. P. Mendez
Analyst in Defense Health Care Policy
Congressional Research Service
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