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Health insurance eats up 9 percent of Pentagon budget

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Health insurance eats up 9 percent of Pentagon budget

The cost of health insurance for active duty and retired military personnel has increased from $19 billion in 2001 to $49 billion in 2010. The health care program, called TRICARE, accounts for almost 9 percent of the Pentagon's total budget.

The increase is partly due to the number of eligible beneficiaries increasing, but it could also be linked to employers giving financial incentives to TRICARE-eligible beneficiaries to opt out of employer-paid insurance and shift health care costs to the Pentagon, according to the Government Accountability Office.

In an attempt to rein in costs, the 2007 National Defense Authorization Act prohibits employers with more than 20 employees from offering financial or other incentives to employees who are eligible for TRICARE to decline employer-sponsored health insurance, or to terminate enrollment in private insurance.

As a result, the Pentagon predicts a savings of $436 million by 2015. But even if people opt out, TRICARE might still pay their health care costs since it functions as a second payer for beneficiaries with private insurance.

Reprinted by permission of The Center for Public Integrity.

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