The military health system has three missions: (1) maintaining the health  of active-duty service personnel, (2) medically supporting military  operations, and (3) providing care to the dependents of active-duty  personnel, retirees and their families, and survivors. Effective October 1, 2001, retirees age 65 and older  enrolled in Medicare part B became eligible for TRICARE coverage—  commonly termed TRICARE For Life. This includes copayments required of  retirees enrolled in civilian Medicare managed care plans. About  125,000 retirees were eligible for the demonstration. Senior Prime offered enrollees the full range of Medicare-covered services  as well as additional TRICARE services, notably prescription drugs. Disenrollment remained low  throughout the demonstration, averaging about 2 percent during the last  year of the initial demonstration period. Most Nonenrollees Were Satisfied with Their Existing Health Coverage

Most retirees who did not enroll in Senior Prime reported that they were  already satisfied with their existing health care coverage, and few cited  negative attitudes about military care. Demonstration Underscored Challenges in Managing Care and Costs Within the Military Health System

While the demonstration had positive results for enrollees, it also  highlighted several challenges that confront the military health system in  managing patient care and costs. Finally, the demonstration illustrated  the tensions between the military health system’s commitment to care for  active-duty personnel and support military operations and its commitment  to provide care to civilian family members and retirees. Although DOD satisfied its new senior enrollees and gave them  good access to care, it incurred high costs in doing so. Limitations in Data and Data Systems Posed Problems for DOD Managers

Although DOD was able to establish and operate the demonstration, its  efforts were hampered by limitations in its data and data systems. The survey was sent to Senior Prime enrollees and to  retirees who were eligible for Senior Prime but did not join.
What GAO Found

The Department of Defense's (DOD) Medicare subvention demonstration tested alternate approaches to health care coverage for military retirees. Retirees could enroll in new DOD-run Medicare managed care plans, known as TRICARE Senior Prime, at six sites. The demonstration plan offered enrollees the full range of Medicare-covered services as well as additional TRICARE services, with minimal copayments. During the demonstration period, the program parameters were changed, allowing military retirees age 65 and older to become eligible for TRICARE coverage as of October 1, 2001, and Senior Prime was extended for one year. The demonstration showed that retirees were interested in enrolling in low-cost military health plans and that DOD was able to satisfy its Senior Prime enrollees. By the close of the initial demonstration period, about 33,000 retirees were enrolled in Senior Prime, and more were on waiting lists. When nonenrollees were asked why they did not join Senior Prime, more than 60 percent said that they were satisfied with their existing health coverage; few said that they disliked military care. Although the demonstration had positive results for enrollees, it also highlighted three challenges confronting the military health system in managing patient care and costs. First, care needs to be managed more efficiently. Although DOD satisfied enrollees and gave them good access to care, it incurred high costs. Second, DOD's efforts were hindered by limitations in its data and data systems. Finally, the demonstration illustrated the tension between the military health system's commitment to support military operations and promote the health of active-duty personnel and its commitment to provide care to dependents of active-duty personnel, retirees and their families, and survivors.