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Updated December 14, 2020
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 FY2019, there were 9.57 million total MHS beneficiaries
Code) through the Military Health System (MHS). The
(see Figure 1).
MHS offers health care benefits and services through its
TRICARE program to approximately 9.5 million
Figure 1. MHS Beneficiaries, FY2019
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
(10 U.S.C. §401) and to perform medical research (10
Source: Defense Health Agency, Evaluation of the TRICARE Program:
U.S.C. §2358).
Fiscal Year 2020 Report to Congress, Washington, DC, 2020, p. 23.
Organization
Note: Numbers may not add up to total because of rounding.
The Under Secretary of Defense for Personnel and
Military Treatment Facilities (MTFs)
Readiness (USD[P&R]) is the principal staff assistant and
On October 1, 2018, administration and management of the
advisor to the Secretary and to the Deputy Secretary of
MTFs began to transfer from each Military Department to
Defense, for Total Force Management as it relates to
the DHA. The DHA administers all MTFs in the United
readiness issues, including health affairs (see 10 U.S.C.
States, while each respective Service Surgeon General
§136).
administers the overseas MTFs. These facilities provide a
Key MHS Organizations
wide range of clinical services depending on size, mission,
and level of capabilities. MTFs provide inpatient and
Office of the Assistant Secretary of Defense for Health Affairs
outpatient medical care and dental services. There are 721
(OASD[HA])
MTFs, with 109 located overseas. The facilities are
generally on or near a U.S. military base and are typically
Defense Health Agency (DHA)
staffed by military, civil service, and contract personnel.
TRICARE Options
Surgeons General of the Army, Navy, and Air Force
With the exception of active duty servicemembers (who are
assigned to the TRICARE Prime option and pay no out-of-
The Assistant Secretary of Defense for Health Affairs
pocket costs for TRICARE coverage), MHS beneficiaries
(ASD[HA]) reports to the USD(P&R). The ASD(HA) is the
may have a choice of TRICARE plan options depending
principal advisor to the Secretary of Defense on all "DOD
upon their status (e.g., active duty family member, retiree,
health policies, programs and activities" and has primary
reservist, child under age 26 ineligible for family coverage,
responsibility for the MHS (see DOD Directive 5136.01).
Medicare-eligible) and geographic location. Each plan
Reporting to the USD(P&R) through the ASD(HA), the
option has different beneficiary cost-sharing features. Cost
Defense Health Agency (DHA) is a joint combat support
sharing may include an annual enrollment fee, annual
agency whose purpose is to enable the Army, Navy, and Air
deductible, monthly premiums, copayments, and an annual
Force medical services to provide a medically ready force
catastrophic cap. Pharmacy copayments are established
and a ready medical force to combatant commands in both
separately and are the same for all beneficiaries under each
peacetime and wartime.
option. The current major plan 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 FY2021 includes a plan to
enroll in this option if they live within or near a designated
reduce its active duty medical force by 9.6% (7,422
Prime Service Area. TRICARE Prime features an annual
personnel) to “meet the [National Defense Strategy] NDS
enrollment fee for retirees but does not have an annual
as well as allow the MHS to optimize operational training
deductible and has minimal copayments.
and beneficiary care delivery.” DOD’s plan to implement
TRICARE Select
these reductions would: (1) transfer UMB-funded positions
TRICARE Select is a self-managed, preferred-provider
from the MHS to new health service support positions in
option. This plan allows beneficiaries greater flexibility in
deployable or warfighting units, military service
managing their own health care and typically does not
headquarters, or combatant commands; (2) transfer
require a referral for specialty care. Eligible beneficiaries
personnel billets from the MHS to the Military Departments
must enroll annually and may be subject to an enrollment
for repurposing as nonmedical billets; and (3) convert
fee, annual deductible, and copayments depending on their
certain military positions to civilian positions.
status. Lower out-of-pocket costs are associated with care
Sustaining Wartime Medical Readiness Skills
delivered by a TRICARE network provider.
As U.S. combat operations decline, sustaining readiness of
TRICARE for Life
the medical force remains an ongoing challenge for DOD.
In general, certain retired TRICARE beneficiaries must
The FY2017 NDAA created new authorities for the
enroll in Medicare and pay Medicare Part B premiums to
Secretary of Defense to expand partnerships with certain
retain TRICARE coverage. The coverage provided is
civilian health care systems and Veterans Affairs medical
known as TRICARE for Life. There is no enrollment fee or
facilities and to expand access to care at MTFs to non-
premium; beneficiaries pay no out-of-pocket costs for
beneficiaries for the purposes of preserving core clinical
services covered by both Medicare and TRICARE for Life.
competencies, combat casualty care capabilities, and
Budget
enhancing wartime medical readiness skills.
Congress funds the MHS through several defense
Implementing a New Electronic Health Record
appropriations accounts, including the Defense Health
In 2015, DOD awarded a $4.3 billion contract to develop a
Program (within the Operation & Maintenance account),
modern, interoperable electronic health record that can be
Military Personnel, Military Construction, Medicare-
used in all care settings, including austere operational
Eligible Retiree Health Care Fund (MERHCF), and
environments and in MTFs. Initial deployment of the
Overseas Contingency Operations (OCO). Together, DOD
system began in February 2017 in the Pacific Northwest
refers to these funds as the Unified Medical Budget (UMB).
and is designed to be a multi-year rollout across the MHS
The UMB does not include health-related spending or
through 2024.
personnel covered by other defense accounts or medical
research performed by the Defense Advanced Research
Relevant Statutes and Regulations
Projects Agency or other military research agencies. The
Title 10, U.S. Code, Chapter 55 – Medical and Dental Care
FY2021 request for the UMB is $50.8 billion—about 7.2%
of DOD’s total budget. The request includes $33.1 billion
Title 10, U.S. Code, Chapter 56 – DOD MERHCF
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 $16.1 billion would be for “Private Sector Care.” Also
included in the request are $8.9 billion in the Military
CRS Products
Personnel account, $0.5 billion for Military Construction,
CRS Report R45399, Military Medical Care: Frequently Asked
and $8.4 billion for accrual payments to the MERHCF.
Questions, by Bryce H. P. Mendez
Current Challenges
CRS In Focus IF11442, FY2021 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 In Focus IF11273, Military Health System Reform, by Bryce
attracted congressionally directed reform efforts and
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 2020 Report
respective Service Surgeon General to the DHA Director;
to Congress, 2020.
(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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