TRICARE Program at a Glance

The U.S. Dept. of Defense recently awarded $136 billion in contracts for its TRICARE program that provides health care benefits to military service members, retirees and their families. The contract award for the West region went to TriWest Healthcare Alliance of Phoenix, which is partnering with Regence health plans and Health Care Service Corp. to administer the program. Humana Government Business Inc. will continue to serve the East region when the next contracts begin in 2024. Currently, Health Net Federal Services LLC, a subsidiary of Centene Corp., covers the West region with about 2.8 million beneficiaries, and Humana covers the East region with more than 6.8 million enrollees. In 2024, six states in the East region — Arkansas, Illinois, Louisiana, Oklahoma, Texas and Wisconsin, with a total of 1.5 million beneficiaries — will transfer to the West region in order to balance out the number of beneficiaries served by the two regions.

In fiscal year 2021, about 9.6 million beneficiaries were enrolled in TRICARE, with about half choosing a TRICARE Prime health plan that is comparable to health maintenance organization (HMO) plans, according to “The Evaluation of the TRICARE Program: Fiscal Year 2022 Report to Congress.”

The report compared utilization and costs associated with TRICARE plans to similar civilian health plans. Between FY 2019 and FY 2021, the overall TRICARE Prime inpatient utilization rate dropped 11%, yet it was still 53% higher than the civilian HMO utilization rate in 2021. For the beneficiaries who enrolled in non-Prime health plans, the overall utilization rate decreased by 5% between 2019 and 2021, and the rate remained well above the civilian employer-sponsored preferred provider organization (PPO) plans’ benchmark. The overall inpatient cost per beneficiary slightly decreased from $844 in 2019 to $826 in 2021.

The overall TRICARE Prime outpatient utilization rate declined between 2019 and 2021, while the civilian HMO outpatient rate increased by 8%. Yet the overall Prime outpatient rate was still 21% higher than its civilian counterpart in 2021. For non-Prime enrollees, the outpatient utilization rate remained well below the level observed for civilian PPOs over the three years. The overall outpatient cost per TRICARE beneficiary rose 4%, from $2,155 in 2019 to $2,251 in 2021.

From FY 2009 to FY 2021, the average private health insurance family premium soared 44%, whereas the TRICARE Prime enrollment fee remained essentially flat. Meanwhile, civilian counterpart families enrolled in HMO and PPO plans had significantly higher out-of-pocket costs than TRICARE beneficiaries.

NOTE: Currently, parts of Texas are covered by Centene Corp., while parts of Missouri are covered by Humana Inc.

SOURCES: “Contracts For Dec. 22, 2022,” U.S. Department of Defense. “Patient Numbers By State,” Health.mil. “Evaluation of the TRICARE Program: Fiscal Year 2022 Report to Congress,” Defense Health Agency (DHA), Analytics and Evaluation Division.

This infographic was reprinted from AIS Health’s weekly publication Health Plan Weekly.

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