Managers of the Tricare military health benefits program have awarded the administration contract for the program’s East region to a unit of Humana, and the contract for the program’s West region to a unit of Centene Corp.
Tricare is a federal program that provides health and dental benefits for military personnel, reservists, the dependents of military personnel, and military retirees.
Each regional contract starts with a nine-month coverage base period and includes up to five one-year contract extension options.
The East region contract that Humana won has a potential value of $40.5 billion, according to the Defense Health Agency, an arm of the U.S. Department of Defense.
The West Region contract could be worth $17.7 billion.
Centene, the winner of the West region contract, would handle the contract through its Health Net Federal Services unit. Centene acquired Health Net, the federal services unit’s parent, in March.
The two regional programs could provide health coverage for a total of about 9.2 million people, according to a program bid solicitation package.
The base periods for the two contracts are supposed to start on the date of award and last until the start of health care delivery. The first of the five option periods is supposed to start April 1, 2017.
Tricare replaced the old Champus military civilian health benefits program in 1997. Tricare had 12 regions in 1997. It now has three regions. The current bidding process is on track to reduce the number of regions to two.
Insurers that fail to win Tricare contracts during the first round of bidding can, and often do, file appeals, and the appeals sometimes succeed. Tricare managers say they received four bids for the East region and three for the West region.
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