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Web Posted : 05/04/2002 12:00 AM Facing the military's beefed-up health-care plan, USAA has decided to discontinue selling supplemental healthcare coverage to active-duty military, retirees and their families. In March, USAA stopped selling new, supplemental coverage to the government's Tricare program, formerly called CHAMPUS. Now, company officials are notifying existing customers that USAA will cease renewing Tricare supplemental coverage on Dec. 1. The Department of Defense revamped its 40-year health- care program and launched the Tricare managed-care program in the mid-1990s to slow medical expenses that were growing at a rate 36 percent faster than national health-care expenditures, according to one General Accounting Office Report. The new program offered three insurance choices that range from a restrictive HMO to a traditional, high-deductible plan. Private insurance companies and military associations successfully sold supplemental policies because Tricare required up to $7,500 in out-of-pocket expenses on one policy and didn't subsidize drug coverage for the retirees who didn't live near military clinics. USAA had been offering supplemental health-care coverage to military families since 1986 and sold most of its Tricare supplements to retirees and their family members under the age of 65, according to the company. But last year, the Department of Defense discontinued co-payments for most active-duty personnel and their families; cut the out-of-pocket expense cap to $3,000; began paying for any services not covered by Medicare and introduced a drug benefit that charges less than $10 per refill for the average prescription. The changes dramatically affected about three-fourths of the estimated 8.7 million participants, based on Tricare figures. So, USAA decided that, "There would be little left for the supplement to insure, creating a 'dollar-swapping' situation where the cost of the supplemental policy is about the same as members' claims," according to USAA spokeswoman Lesli Hicks. However, few other competitors have dropped the coverage, according to the Military Benefit Association, which sells a competing product to about 5,000 customers. Tricare officials say the supplemental market is still strong among retirees who don't yet qualify for Medicare. "They are still in a situation of having some out-of-pocket costs," said Steve Lillie, director of program development with the Tricare Management Activity division of the Department of Defense. "And only half of the retirees under the age of 65 have employer-based insurance." 05/04/2002 |
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