1). Eligibility for DOD and VA Coverage Is Primarily Based on Military Status, and Eligibility for Medicare, Medicaid, and Exchange- Purchased Coverage Is Based on Age, Income, or Other Factors

Servicemembers’, former servicemembers’, and their dependents’  eligibility for coverage through DOD and VA is primarily based on military  status. However, these individuals’ eligibility for Medicare, Medicaid, and  to purchase coverage through an exchange is based on age, income, or  other factors. Certain dependents of servicemembers and former servicemembers who  retired from military service, reservists, and retired reservists are not  statutorily entitled to TRICARE coverage, but may choose to purchase  TRICARE coverage through specified plans, according to DOD officials. Generally, former  servicemembers—both retired and those who left military service for  reasons other than retirement—are eligible for VA coverage. Individuals, including servicemembers, former servicemembers, and their  dependents, may purchase coverage through an exchange if they meet  certain criteria established by PPACA. DOD, VA, Medicare, Medicaid, and Exchange- Purchased Coverage Generally Offer Comprehensive Health Care Coverage; Key Benefits within Programs May Vary

DOD, VA, Medicare, Medicaid, and health plans offered through the  exchanges generally offer comprehensive care to their respective  beneficiaries, which include servicemembers, former servicemembers,  and their dependents—coverage that includes certain benefit categories  such as inpatient hospital services, outpatient medical services, and  certain prescription drugs, though some of these benefits may vary. 2). 3). VA’s health care program generally does not require former  servicemembers to pay premiums and generally does not require cost- sharing for certain groups of former servicemembers, such as those with  certain service-connected disabilities or who are low income. The average,  annual out-of-pocket costs for those required to participate in cost-sharing  was $322 for fiscal year 2013. To qualify  for federal subsidies, individuals must be eligible to enroll in an exchange  plan, meet income criteria, and not have MEC, including coverage  through government-sponsored programs, such as DOD or VA, Medicare,  or Medicaid. Federal subsidies for exchange-purchased coverage may be available to  certain former servicemembers and certain dependents of  servicemembers and former servicemembers who are not covered by  DOD or VA health care, if they meet applicable income and other   Most servicemembers and former servicemembers and  requirements.their dependents have MEC and therefore are ineligible for premium tax  credits and cost-sharing reductions, regardless of their income.Therefore, in order to qualify for federal subsidies, these individuals would  first need to cancel their government-sponsored coverage. DOD and VA Provide Information on Eligibility for Exchange-Purchased Coverage, but DOD Provides Limited Information on Qualifying for Federal Subsidies

Both DOD and VA provide information to servicemembers, former  servicemembers, and their dependents on how DOD and VA coverage is  affected by PPACA requirements, as well as information on eligibility for  exchange-purchased coverage. Specifically, DOD’s website does not inform  servicemembers and former servicemembers that retired from military  service that they and their dependents are statutorily entitled to TRICARE  coverage and, as a result, they may not opt out of this coverage in order  to potentially qualify for federal subsidies. Not providing such information is inconsistent with  federal internal control standards. More Than 27 Million Servicemembers, Former Servicemembers, and Their Dependents Had Coverage through Federal Programs in 2012

More than 27 million servicemembers, former servicemembers, and their  dependents reported that they had health care coverage through DOD,  VA, Medicare, Medicaid, or a combination of these in 2012, according to  data we reviewed from the ACS. For example, an individual with  coverage through DOD and Medicare is counted in the DOD count and  the Medicare count. ACS survey respondents also reported coverage through Medicare and  Medicaid. About 7 million servicemembers, former servicemembers, and their  dependents had health care coverage through two or more programs in  2012. While DOD and VA both provide  information on their eligibility for coverage through the exchanges, only  VA provides information on how individuals may qualify for federal  subsidies. Recommendation for Executive Action

To help ensure that servicemembers, former servicemembers, and their  dependents have complete information for considering their choices for  their health care coverage, we recommend that the Secretary of Defense  disseminate information on how DOD health care coverage may affect  servicemembers’, former servicemembers’, and their dependents’ ability  to qualify for federal subsidies that reduce the costs of exchange- purchased coverage. HHS had no comments. We are sending copies of this report to the Secretary of the Department  of Defense, the Secretary of the Department of Health and Human  Services, the Secretary of the Department of Veterans Affairs, the  Administrator of CMS, and the appropriate congressional committees.
Why GAO Did This Study

In fiscal year 2013, there were about 53 million servicemembers and former servicemembers—those who retired from military service or left for reasons other than retirement—and their dependents. These individuals may be eligible for health care coverage through DOD, VA, Medicare, or Medicaid and may purchase coverage through the exchanges established by PPACA. These sources provide individuals opportunities for choosing the coverage that is most suited to their needs, but may also require consideration of complex factors when making choices.
GAO was asked to examine federal health care programs and exchange-purchased coverage available to servicemembers, former servicemembers, and their dependents. GAO examined (1) eligibility for coverage, (2) the key benefits offered by this coverage and the individuals' costs, (3) the extent to which information on exchange-purchased coverage and federal subsidies is provided by DOD and VA, and (4) the extent to which these individuals have coverage through DOD, VA, Medicare, and Medicaid. GAO reviewed agency documents and relevant laws and regulations, analyzed U.S. Census Bureau data, and interviewed agency officials.

What GAO Found

Servicemembers', former servicemembers', and their dependents' eligibility for health care coverage through the Department of Defense (DOD) and the Department of Veterans Affairs (VA) is primarily based on military status, while eligibility for Medicare, Medicaid, and coverage purchased through an exchange established by the Patient Protection and Affordable Care Act (PPACA) is based on age, income, or other factors. The Centers for Medicare & Medicaid Services (CMS)—an agency within the Department of Health and Human Services (HHS)—oversees health care coverage provided through Medicare, Medicaid, and the exchanges. Most servicemembers, and former servicemembers who retired from military service, and their dependents are entitled to DOD coverage, according to DOD officials. Those who are not entitled to DOD coverage, such as reservists and certain of their dependents, may be eligible to purchase it. Former servicemembers who left military service for reasons other than retirement are not eligible for DOD coverage. All former servicemembers are generally eligible for VA coverage. Servicemembers, former servicemembers, and their dependents may also be eligible for Medicare or Medicaid, if they meet eligibility criteria, and may purchase coverage through an exchange.
Federal programs and exchange-purchased plans generally offer comprehensive coverage, which includes coverage for certain benefit categories such as inpatient hospital and outpatient medical services. These forms of coverage may have cost-sharing, subject to certain limits. Cost limits vary and depend on factors such as military status and income. For example, servicemembers do not pay an annual enrollment fee for certain DOD coverage, but former servicemembers do. VA does not generally require cost-sharing for those with certain service-connected conditions or low incomes, while it may for others.
DOD and VA provide information about exchange-purchased coverage on their websites, including that their coverage satisfies the requirement for minimal essential coverage (MEC) established by PPACA. VA informs its beneficiaries that they do not qualify for federal subsidies that lower the cost of exchange plans, even if they meet income and other requirements, because VA coverage satisfies the requirement for MEC. VA also informs its beneficiaries that they may opt out of VA coverage, and thus potentially qualify for federal subsidies. DOD, however, does not provide information indicating that most individuals with DOD coverage cannot opt out of it and, therefore, cannot qualify for federal subsidies. Nor does DOD inform those that have the option of purchasing DOD coverage that they may qualify for federal subsidies, if they do not choose DOD coverage. This is inconsistent with federal internal controls that require communication with stakeholders, and by providing this information, DOD could potentially help servicemembers, certain former servicemembers, and their dependents make more informed decisions regarding their health care coverage.
About 27 million servicemembers, former servicemembers, and their dependents had health care coverage through DOD, VA, Medicare, or Medicaid, or a combination of these in 2012, according to U.S. Census Bureau data. Of these, about 7 million had health care coverage through two or more programs in 2012, most often VA and Medicare (2.4 million), Medicare and Medicaid (1.3 million), and DOD and Medicare (1.2 million).

What GAO Recommends

GAO recommends that DOD provide information on how its coverage affects individuals' qualification for federal subsidies for exchange-purchased coverage. DOD concurred with GAO's recommendation. VA generally agreed with GAO's conclusions. HHS had no comments on this report.