Defense Primer: Military Health System

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Updated March 4, 2024
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 Title 10, Chapter 55, of the U.S.
peacetime and wartime.
Code) through the Military Health System (MHS). The
Beneficiaries
MHS offers health care benefits and services through its
In FY2022, there were 9.5 million total MHS beneficiaries
TRICARE program to approximately 9.5 million
(see Figure 1).
beneficiaries composed of servicemembers, military
retirees, and family members. Health care services are
Figure 1. MHS Beneficiaries, FY2022
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).

Organization
Source: DHA, Evaluation of the TRICARE Program: Fiscal Year 2023
Report to Congress
, Washington, DC, 2023, p. 31.
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
advisor to the Secretary of Defense and to the Deputy
Military Treatment Facilities (MTFs)
Secretary of Defense for Total Force Management as it
DHA administers all MTFs worldwide. Generally, these
relates to readiness issues, including health affairs (see 10
facilities are located on or near a U.S. military base. There
U.S.C. §136).
are three types of MTFs that provide a range of clinical
Key MHS Organizations
services depending on facility size, mission, and level of
capabilities: (1) medical centers, (2) hospitals, and (3)
• Office of the Assistant Secretary of Defense for Health Affairs
ambulatory care centers. MTFs are typically staffed by
(OASD[HA])
military, civil service, and contract personnel. In FY2022,
there were 708 MTFs, with 104 located overseas.
• Defense Health Agency (DHA)
TRICARE Options
• Army Medical Command, Navy Bureau of Medicine and
With the exception of active duty servicemembers (who are
Surgery, and the Air Force Medical Agency
assigned to the TRICARE Prime option and pay no out-of-
pocket costs for TRICARE coverage), MHS beneficiaries
The Assistant Secretary of Defense for Health Affairs
may have a choice of TRICARE plan options depending
(ASD[HA]) reports to the USD(P&R). The ASD(HA) is the
upon their status (e.g., active duty family member, retiree,
principal advisor to the Secretary of Defense on all “DOD
reservist, child under age 26 ineligible for family coverage,
health policies, programs and activities” and has primary
Medicare-eligible) and geographic location. Each plan
responsibility for the MHS (see DOD Directive 5136.01).
option has different beneficiary cost-sharing features. Cost
Reporting to the USD(P&R) through the ASD(HA), the
sharing may include an annual enrollment fee, annual
Defense Health Agency (DHA) is a joint combat support
deductible, monthly premiums, copayments, and an annual
agency whose purpose is to enable the Army, Navy, and Air
catastrophic cap. Pharmacy copayments are established
Force medical services to provide a medically ready force
separately and are the same for all beneficiaries under each
option. The current major plan options are listed below.
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Defense Primer: Military Health System
TRICARE Prime
series of actions to reattract beneficiaries to MTF care in
TRICARE Prime is a health maintenance organization
order to “support the National Defense Strategy, increase
(HMO)-style option in which beneficiaries typically get
clinical readiness, mitigate risks to [military] requirements,
most care at an MTF. Beneficiaries may be eligible to
and reduce long-term cost growth in private sector care.”
enroll in this option if they live within or near a designated
These actions, which focus on maintaining a “stable,
Prime Service Area. TRICARE Prime features an annual
predictable workforce sufficiently staffed, trained, and
enrollment fee for retirees but does not have an annual
routinely available” to provide care to beneficiaries,
deductible and has minimal copayments.
include:
TRICARE Select
• a comprehensive review of all DOD medical workforce
TRICARE Select is a self-managed, preferred-provider
requirements (active and reserve components, civilian,
option (PPO). This plan allows beneficiaries greater
and contract personnel);
flexibility in managing their own health care and typically
• improvement of MTF capacity to “sustain clinical
does not require a referral for specialty care. Eligible
readiness of active duty health care personnel;”
beneficiaries must enroll annually and may be subject to an
• prioritization of military medical personnel assignments
enrollment fee, annual deductible, and copayments
to MTFs;
depending on their status. Lower out-of-pocket costs are
• improvement of civilian recruitment and retention
associated with care delivered by a TRICARE network
through implementation of alternative salary rates; and
provider.
• reattracting at least 7% of beneficiary care to the MTFs
TRICARE for Life
by December 31, 2026.
In general, certain retired TRICARE beneficiaries must
Sustaining Wartime Medical Readiness Skills
enroll in Medicare and pay Medicare Part B premiums to
Sustaining readiness of the medical force remains an
retain TRICARE coverage. The coverage provided is
ongoing challenge for DOD. The FY2017 NDAA created
known as TRICARE for Life. There is no enrollment fee or
new authorities for the Secretary of Defense to expand
premium; beneficiaries pay no out-of-pocket costs for
partnerships with certain civilian health care systems and
services covered by both Medicare and TRICARE for Life.
Veterans Affairs medical facilities and to expand access to
Budget
care at MTFs to non-beneficiaries for the purposes of
preserving core clinical competencies, combat casualty care
Congress historically funds the MHS through several
capabilities, and enhancing wartime medical readiness
accounts in the annual Defense appropriations bill. These
skills. In 2021, the Government Accountability Office
include the Operation & Maintenance account for the
(GAO) found that the “military departments lack reasonable
Defense Health Program and the services’ Military
assurance that all enlisted medical personnel are ready to
Personnel accounts for military personnel costs and the
perform during deployed operations.” GAO made 30
Medicare-Eligible Retiree Health Care Fund (MERHCF).
recommendations for DOD to define, implement, track, and
Congress also funds MHS construction projects through the
assess wartime medical skills for enlisted medical
Defense-wide Military Construction account within the
personnel.
annual Military Construction, Veterans Affairs and Related
Agencies appropriations bill. Together, DOD refers to these
Relevant Statutes and Regulations
funds as the Unified Medical Budget (UMB). The FY2024
request for the UMB is $58.7 billion—about 7.0% of
Title 10, Chapter 55, U.S. Code – Medical and Dental Care
DOD’s total budget request. The request includes $37.1
Title 10, Chapter 56, U.S. Code – DOD MERHCF
billion for the Defense Health Program, of which $10.0
Title 32, Part 199, Code of Federal Regulations – Civilian Health
billion would be for MTF care (also called “In-House
and Medical Program of the Uniformed Services
Care”) and $19.9 billion would be for “Private Sector
Care.” Also included in the request are $9.2 billion in the
CRS Products
Military Personnel account, $0.5 billion for Military
Construction, and $10.6 billion for accrual payments to the
CRS Report R45399, Military Medical Care: Frequently Asked
MERHCF.
Questions, by Bryce H. P. Mendez
CRS In Focus IF12377, FY2024 Budget Request for the Military
Current Challenges
Health System, by Bryce H. P. Mendez
There are a number of perceived areas for potential
improvement within the MHS, many of which have
Other Resources
attracted congressionally directed reform efforts and
DHA, Evaluation of the TRICARE Program: Fiscal Year 2023
ongoing oversight activities.
Report to Congress, 2023
Reattracting Beneficiaries to MTF Care
GAO, Defense Health Care: Actions Needed to Define and Sustain
The MHS Strategy for Fiscal Years 2024-2029 lists four
Wartime Medical Skills for Enlisted Personnel, GAO-21-337, June
goals to become the “world’s role model of an integrated
17, 2021
military system of health and medical readiness.” One of
DOD, Military Health System Strategy Fiscal Years 2024-2029,
these goals focuses on “stabiliz[ing] the MHS by “attracting
2023
and reattracting beneficiaries to the MTF.” According to
DOD, the “MHS purchases more than 65 percent of the
total care provided to beneficiaries.” In a December 2023
memorandum, the Deputy Secretary of Defense directed a
https://crsreports.congress.gov

Defense Primer: Military Health System

IF10530
Bryce H. P. Mendez, Analyst in Defense Health Care
Policy


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