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Updated November 18, 2022
Defense Primer: Military Health System
The Department of Defense (DOD) administers a statutory
and a ready medical force to combatant commands in both
health entitlement (under Chapter 55 of Title 10, U.S.
peacetime and wartime.
Code) through the Military Health System (MHS). The
Beneficiaries
MHS offers health care benefits and services through its
In FY2021, there were 9.62 million total MHS beneficiaries
TRICARE program to approximately 9.62 million
(see Figure 1).
beneficiaries composed of servicemembers, military
retirees, and family members. Health care services are
Figure 1. MHS Beneficiaries, FY2021
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
U.S.C. §4001).
Source: Defense Health Agency, Evaluation of the TRICARE Program:
Organization
Fiscal Year 2022 Report to Congress, Washington, DC, 2022, p. 33.
The Under Secretary of Defense for Personnel and
Note: Numbers may not add up to total due to rounding.
Readiness (USD[P&R]) is the principal staff assistant and
Military Treatment Facilities (MTFs)
advisor to the Secretary of Defense and to the Deputy
DHA administers all MTFs worldwide. Generally, these
Secretary of Defense for Total Force Management as it
facilities are located on or near a U.S. military base. There
relates to readiness issues, including health affairs (see 10
are three types of MTFs that provide a range of clinical
U.S.C. §136).
services depending on facility size, mission, and level of
Key MHS Organizations
capabilities: (1) medical centers, (2) hospitals, and (3)
ambulatory care centers. MTFs are typically staffed by
Office of the Assistant Secretary of Defense for Health Affairs
military, civil service, and contract personnel. In FY2021,
(OASD[HA])
there were 706 MTFs, with 144 located overseas.
Defense Health Agency (DHA)
TRICARE Options
With the exception of active duty servicemembers (who are
Army Medical Command, Navy Bureau of Medicine and
assigned to the TRICARE Prime option and pay no out-of-
Surgery, and the Air Force Medical Readiness Agency
pocket costs for TRICARE coverage), MHS beneficiaries
may have a choice of TRICARE plan options depending
The Assistant Secretary of Defense for Health Affairs
upon their status (e.g., active duty family member, retiree,
(ASD[HA]) reports to the USD(P&R). The ASD(HA) is the
reservist, child under age 26 ineligible for family coverage,
principal advisor to the Secretary of Defense on all “DOD
Medicare-eligible) and geographic location. Each plan
health policies, programs and activities” and has primary
option has different beneficiary cost-sharing features. Cost
responsibility for the MHS (see DOD Directive 5136.01).
sharing may include an annual enrollment fee, annual
Reporting to the USD(P&R) through the ASD(HA), the
deductible, monthly premiums, copayments, and an annual
Defense Health Agency (DHA) is a joint combat support
catastrophic cap. Pharmacy copayments are established
agency whose purpose is to enable the Army, Navy, and Air
separately and are the same for all beneficiaries under each
Force medical services to provide a medically ready force
option. The current major plan options are listed below.
https://crsreports.congress.gov
Defense Primer: Military Health System
TRICARE Prime
access, quality, and experience of care for beneficiaries. On
TRICARE Prime is a health maintenance organization
October 6, 2022, DHA announced that they are “fully
(HMO)-style option in which beneficiaries typically get
responsible for health care delivery in the Department of
most care at an MTF. Beneficiaries may be eligible to
Defense.”
enroll in this option if they live within or near a designated
Reductions in Military Medical Personnel
Prime Service Area. TRICARE Prime features an annual
In a 2021 report to Congress, DOD described a plan to
enrollment fee for retirees but does not have an annual
reduce its active duty medical force by 12,801 positions
deductible and has minimal copayments.
(i.e., billets) in order to “support the operational medical
TRICARE Select
requirements to meet the National Security Strategy (NSS),
TRICARE Select is a self-managed, preferred-provider
National Defense Strategy (NDS), and Defense Planning
option (PPO). This plan allows beneficiaries greater
Guidance.” DOD plans to implement these reductions
flexibility in managing their own health care and typically
between FY2023 and FY2027 by removing already vacant
does not require a referral for specialty care. Eligible
positions, attrition, retraining or converting billets, or “force
beneficiaries must enroll annually and may be subject to an
management actions.”
enrollment fee, annual deductible, and copayments
Sustaining Wartime Medical Readiness Skills
depending on their status. Lower out-of-pocket costs are
Sustaining readiness of the medical force remains an
associated with care delivered by a TRICARE network
ongoing challenge for DOD. The FY2017 NDAA created
provider.
new authorities for the Secretary of Defense to expand
TRICARE for Life
partnerships with certain civilian health care systems and
In general, certain retired TRICARE beneficiaries must
Veterans Affairs medical facilities and to expand access to
enroll in Medicare and pay Medicare Part B premiums to
care at MTFs to non-beneficiaries for the purposes of
retain TRICARE coverage. The coverage provided is
preserving core clinical competencies, combat casualty care
known as TRICARE for Life. There is no enrollment fee or
capabilities, and enhancing wartime medical readiness
premium; beneficiaries pay no out-of-pocket costs for
skills.
services covered by both Medicare and TRICARE for Life.
TRICARE’s Next Generation Contracts
Budget
In July 2016, DHA awarded its current generation of
TRICARE contracts (i.e., T-2017). Shortly after, multiple
Congress historically funds the MHS through several
bid protests were filed with the Government Accountability
accounts in the annual Defense appropriations bill. These
Office and in the U.S. Court of Federal Claims,
include the Operation & Maintenance account for the
subsequently delaying the contract start dates by three
Defense Health Program and the services’ Military
months. In April 2021, DHA released a request for
Personnel accounts for military personnel costs and the
proposals for TRICARE’s next generation contracts, called
Medicare-Eligible Retiree Health Care Fund (MERHCF).
T-5. The T-5 contracts could exceed the total value of the
Congress also funds MHS construction projects through the
T-2017 contracts ($58 billion in 2016). DHA anticipates
Defense-wide Military Construction account within the
awarding the T-5 contracts in November 2022.
annual Military Construction, Veterans Affairs and Related
Agencies appropriations bill. Together, DOD refers to these
funds as the Unified Medical Budget (UMB). The FY2023
Relevant Statutes and Regulations
request for the UMB is $55.8 billion—about 7.2% of
Title 10, U.S. Code, Chapter 55 – Medical and Dental Care
DOD’s total budget request. The request includes $36.9
Title 10, U.S. Code, Chapter 56 – DOD MERHCF
billion for the Defense Health Program, of which $9.9
Title 32, Code of Federal Regulations, Part 199 – Civilian Health
billion would be for MTF care (also called “In-House
Care”) and $1
and Medical Program of the Uniformed Services
8.5 billion would be for “Private Sector
Care.” Also included in the request are $8.7 billion in the
CRS Products
Military Personnel account, $0.5 billion for Military
Construction, and $9.7 billion for accrual payments to the
CRS Report R45399, Military Medical Care: Frequently Asked
MERHCF.
Questions, by Bryce H. P. Mendez
CRS In Focus IF12087, FY2023 Budget Request for the Military
Current Challenges
Health System, by Bryce H. P. Mendez
There are a number of perceived areas for potential
CRS In Focus IF11273, Military Health System Reform, by Bryce
improvement within the MHS, many of which have
H. P. Mendez
attracted congressionally directed reform efforts and
CRS Insight IN11719, TRICARE’s Next Generation Contracts: T-5,
ongoing oversight activities.
by Bryce H. P. Mendez
MHS Modernization
The FY2017 NDAA (and subsequent legislation) directed
Other Resources
several modernization efforts, including (1) reassignment of
DHA, Evaluation of the TRICARE Program: Fiscal Year 2022 Report
responsibilities for administering MTFs from the Service
to Congress, 2022.
Surgeons General to the DHA Director; (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; and improve
https://crsreports.congress.gov
Defense Primer: Military Health System
IF10530
Bryce H. P. Mendez, Analyst in Defense Health Care
Policy
Disclaimer
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