The health program that covers military dependents is offering access to dependents up to age 26, and, so far, the cost of setting up that feature seems to be low.

Officials at the U.S. Government Accountability Office (GAO) have written about TRICARE Young Adult program implementation in a report prepared at the request of the leaders of the House and Senate armed forces committees.

TRICARE is a program that provides health coverage for military personnel, military dependents and military retirees who get medical care outside the military and veterans health care systems.

The provision in the Patient Protection and Affordable Care Act of 2010 (PPACA) that requires private insurers and private group plans to extend access to dependents up to age 26 does not apply to PPACA, but Congress has created a special TRICARE Young Adult provision for TRICARE.

In May, TRICARE managers began offering TRICARE enrollees the ability to pay for coverage for dependents up to age 26 who do not have access to employer-sponsored health care coverage and are unmarried.

The U.S. Department of Defense (DOD) estimates implementing 11 of the 21 statutory provisions related to the TRICARE Young Adult program will lead to no additional costs, and that the costs of 8 provisions will be “minimal, because no new staff or significant additional resources will be required to implement them,” officials say.

TRICARE managers told the GAO they will need more time to determine how much implementing the other 2 provisions will cost.

The current implementation estimate for 2011 and 2012 is about $4.4 million, and a 2% markup of TRICARE Young Adult premiums should help offset those costs, GAO officials say.

As of June 2011, the TRICARE Young Adult program had enrolled 4,549 individuals.

The GAO notes that it is not clear how adverse selection will affect program premiums.

“DOD did not take the impact of adverse selection into account when determining [TRICARE Young Adult (TYA)] premiums because it lacked adequate data on the likely impact of adverse selection,” GAO officials say. “DOD officials told us that the department plans to adjust TYA premiums to reflect the actual average cost of providing benefits and associated administrative costs for calendar year 2014.”

- Allison Bell

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