Public Law 106-398, the Floyd A. Spence National Defense Authorization Act for Fiscal Year 2001, includes two key improvements in health care benefits for Medicare-eligible military retirees.

As of April 1, 2001, a pharmacy benefit is available to all Medicare-eligible military retirees. Retirees who became Medicare-eligible before April 1, 2001 will receive the benefit. Retirees who become Medicare eligible after April 1, 2001 must be enrolled in the Medicare Part B to participate.

As of October 1, 2001, Medicare-eligible beneficiaries qualify for TRICARE. Medicare will be the first payer, and TRICARE will serve as secondary payer. All beneficiaries, regardless of age, must be enrolled in Medicare Part B to receive this benefit.

 

But Medicare law imposes a 10% premium penalty for each year past the initial eligibility period that an individual does not enroll. For a retiree who has delayed enrollment for five years, this penalty will result in a monthly premium of $75 instead of $50.

 

The TRICARE Retirees Opportunity Act of 2001 corrects this inequity.

TROA:

 

• Eliminates the late enrollment penalty for all military retirees who enroll in Medicare Part B between January 1, 2001 and December 31, 2002.

 

• Creates a special continuous Medicare Part B enrollment period for military retirees through December 31, 2002. Currently, Medicare beneficiaries past the initial eligibility period can only enroll between January 1 and March 31 each year, with coverage becoming effective on July 1. Through the Cardin legislation, eligible retirees may enroll in Medicare Part B at any time during the year, with enrollment effective on the first of the month following the enrollment date.

 

HR 2073

The TRICARE Retirees Opportunity Act of 2001

• Eliminates Medicare Part B 10% late enrollment penalty from 01/01/01 - 12/31/02
• Creates year-round special enrollment period until 12/31/02

Effect of 10% Late Enrollment Penalty on Medicare Part B Premiums

Beneficiary Enrolls:	Base Premium	10% Penalty	Monthly Premium	Annual Premium
When first eligible	$50	$0	$50	$600
After one year	$50	$5	$55	$660
After five years	$50	$25	$75	$900
After ten years	$50	$50	$100	$1200
After fifteen years	$50	$75	$125	$1500
After twenty years	$50	$100	$150	$1800

2001 DoD ESTIMATE OF MILITARY RETIREES AFFECTED: 84,000