TESTIMONY OF

THE RETIRED ENLISTED ASSOCIATION

BEFORE THE

THE SENATE APPROPRIATIONS COMMITTEE

SUBCOMMITTEE ON DEFENSE

UNITED STATES SENATE

MAY 2000

PRESENTED BY

MARK H. OLANOFF, CMSGT, USAF (RET)

LEGISLATIVE DIRECTOR

DISCLOSURE OF FEDERAL GRANTS OR CONTRACTS

The Retired Enlisted Association does not currently receive, has not received during the current fiscal year or either of the two previous years any federal money for grants or contracts. All of the Association’s activities and services are accomplished completely free of any federal building.

Biography of Mark H. Olanoff, CMSgt, USAF (Ret)

Legislative Director

The Retired Enlisted Association

CMSgt Mark H. Olanoff enlisted in the U.S. Air Force on September 27, 1967 after graduating from Darby Township High School in Glenolden, Pa. After completion of basic military training and technical training he was assigned to Osan AB, Korea in 1968 working in the military personnel division. Chief Olanoff served in numerous military personnel assignments at Othello AFS, Washington; RAF Bentwaters, England and Griffiss AFB, NY. He was discharged from the U.S. Air Force on July 30, 1976 and joined the New Jersey Air National Guard in Atlantic City, New Jersey serving in positions of Non-Commissioned Officer in Charge (NCOIC), Customer Assistance; NCOIC, Consolidated Base Personnel Office and Chief, Personnel Systems Management. Chief Olanoff transferred to the Air Force Reserve at Dover AFB, Delaware on June 19, 1986 serving as Chief, Personnel Systems Management until Feb 9, 1991. Chief Olanoff assumed the position of Chief, Personnel Systems Management for the 436^th Airlift Wing (as a federal civil servant) from Feb 10, 1992 until May 22, 1993.

On April 1, 1992, Chief Olanoff assumed the position as the Senior Enlisted Advisor to the Commander of the 512^th Airlift Wing, Dover AFB, DE. In this position, Chief Olanoff served as the Commander’s representative on all enlisted issues. During his tenure in this position, Chief Olanoff was TDY to the Persian Gulf. He served in this position until his retirement from the Air Force Reserve on June 10, 1996.

On April 1, 1996, Chief Olanoff assumed the position of Veterans Service Officer for the State of Delaware assisting Veterans with Veterans Affairs (VA) claims and representing the Commission of Veterans’ Affairs at many meetings and functions. He was appointed to the VA Veterans Integrated Service Network (VISN) 4 Management Advisory Committee, which includes the areas of Pennsylvania, Delaware, parts of South New Jersey and parts of West Virginia.

Chief Olanoff assumed his current position as Legislative Director for The Retired Enlisted Association on December 16, 1996.

He holds an Associate in Applied Science from the Community College of the Air Force in Human Resource Management (April 1980) and a Bachelor of Arts in Political Science from Stockton State College, Pomona, New Jersey (May 1986).

Chief Olanoff is a graduate of the 8^th Air Force Leadership School at Barksdale AFB, LA and a distinguished graduate of the Air National Guard NCO Academy at the Professional Military Educational Center in Knoxville, Tennessee.

Chief Olanoff’s military awards include the Meritorious Service Medal with one oak leaf cluster, the Air Force Commendation Medal with two oak leaf clusters, the Air Force Achievement Medal with one oak leaf cluster, the Armed Forces Expeditionary Medal, the National Defense Service Medal with one service star and the Southwest Asia Service Medal with one service star.

The Retired Enlisted Association (TREA) would like to thank the chairman and distinguished members of the Senate Defense Appropriations subcommittee for the opportunity to come before you to discuss funding issues as it relates to our members needs. We extend our appreciation for the funding levels last year as it pertains to health care, retirement benefits, and pay. In addition, we are requesting increased levels to meet the needs of military retirees, guard and reserve as well as active duty and their dependents.

TREA has 110, 000 members and auxiliary representing all branches of the Armed Services, retired, active duty, guard and reserve whose continued concern over constrained funding levels for the Department of Defense for military personnel issues impacts their daily lives from the healthcare they receive at a military facility to the retirement check they receive in the mail. Medical care, adequate pay, inflation protected retired pay , survivor benefit plan, concurrent receipt and commissaries are concerns of the entire military community.

HEALTH CARE

With bases closing, military treatment facilities (MTFs) downsizing and demographics changing, the need to provide access to health care to our ever growing number of aging retirees creates anxiety with those that "were promised lifetime health care." The fact remains that DoD has a responsibility to those men and women who have served in the uniformed services to provide a medical benefit to those retired military beneficiaries that were promised health care. The demographics have changed from the 1950’s when retirees were only 7 percent of the military health care beneficiary population, therefore Congress needs to provide adequate funding to create a plan to administer a health care benefit to retirees. National expansion of the sites and increased number of enrollees in the current Federal Employees Health Benefit Plan (FEHBP) 65+Test program is needed and the step in the right direction to testing the viable health care options for retirees access to medical care in the future. As this committee is aware, this is only one part of the matrix for accessing health care, expansion of the current BRAC pharmacy benefit and the current test of Medicare subvention will help offer a complete medical benefit for Medicare eligible military retirees.

PHARMACY: PHARMACY BENEFIT FOR MEDICARE ELIGIBLE RETIREES

We are requesting this committee to extend the BRAC (Base Realignment and Closure) pharmacy benefit to include all Medicare eligible military retirees regardless of where they reside. The BRAC pharmacy program provides a National Mail Order Pharmacy (NMOP) benefit at a cost of an $8 co-payment for a 30-90 day prescription, as well as a 20% charge for retail pharmaceuticals at TRICARE network pharmacies.

The April 29, 1999 DoD Pharmacy Benefit Report in section 2 "Pharmacy Redesign Approach and Results" subsection 2.3 estimated the cost for a NMOP and retail pharmacy benefit for 1.4 military retirees over age 65 at 400 million dollars.

TREA was concerned after Public Law 105-261 sec, 723 (DoD pharmacy redesign) was passed, DoD met with military associations in meetings to discuss the pharmacy redesign. In January 1999, all military associations were dropped out of DoD discussions. It was not until August 1999, did DoD propose the Pharmacy Pilot Program to begin enrollment in April 2000, not the required date of October 1, 1999.

The proposal included the BRAC pharmacy benefit with a $500 dollar enrollment fee per couple. The high enrollment fee would indeed skew the number of participants in Fleming, KY and Okeechobee, FL, simply because those who have high usage rates of pharmaceuticals would be the only ones that would participate, therefore increasing the overall enrollment cost in the future. Also, this could jeopardize the current BRAC pharmacy benefit that has no enrollment fee, but the same benefits as the Pharmacy Pilot Program with a NMOP and a 20% retail pharmacy network benefit.

TREA with support of other Military associations went to Congress to request a re-evaluation of the pilot program. In response, Congress directed DoD to come up with a different proposal to submit to them changing the payment structure of the pharmacy program. On November 17, Dr. Sue Bailey, Asst. Secretary for Health Affairs for DoD, met with TREA, TROA, NMFA, NAUS, NCOA, AUSA, and FRA to state that the Pilot Pharmacy Program would not change and would be implemented in April 2000.

The $500 per year for a couple or $800 when expected co-payments are included, the new Pharmacy initiative represents a significant out of pocket expense for enlisted retirees whose average retired pay is under $16,000 per year. For those retirees 65 and older that can access a BRAC pharmacy program now, those that based their pharmaceutical needs on the MTF, only 17% of that population access the NMOP benefit currently. Also, If you have a pharmacy benefit through a Medicare HMO, employer sponsored health care, or spouse, then you cannot access the BRAC benefit.

Again, I cannot stress the concern over the access of pharmaceuticals to our Medicare eligible military retirees due to cost and increasing use of drugs for our senior citizens. We are requesting additional funding to be allocated to expand the BRAC pharmacy benefit to all Medicare-eligible military retirees nationwide with no enrollment fees or deductibles. In addition, we are asking for complete funding for a pharmacy redesign to include a complete national formulary that addresses the drug utilization of our aging war heroes and heroines.

FEHBP - 65+ TEST PROGRAM

In order to have a fair and accurate test, we need to provide the opportunity for Medicare eligible military retirees to increase enrollment in the FEHBP 65+ test for the November 2000 open enrollment season. As we testified last year before this committee, we know that not all military retirees will enroll in this program, but we need to give them the option to make that choice.

TREA is urging this subcommittee to increase the number of demonstration sites, as well as the number of enrollees eligible to participate in the FEHBP 65+ Test effective for the November 2000 open enrollment season. Out of the 66,000 eligible to enroll only 2,500 are currently covered by FEHBP as of March 16, 2000. It is absolutely necessary that we give these retirees an equitable benefit that is as good or as equal to federal civilian retirees.

DoD did not market the program in a timely manner as seen in the low enrollment numbers. Education and marketing by DoD was essential to determining the future success of the FEHBP 65+ test. The marketing timeline dates set up by the Tricare Managed Activities (TMA) office overseeing the program were not all met. The first notification of the program for eligible beneficiaries was via a postcard due out on July 15, which was not sent until August 15, 1999. Secondly, the "Health Fairs" that were sponsored by DoD were not put in place until the first week of November, which was a month late. These eligible beneficiaries in these 8 test sites were not properly marketed to on the FEHBP 65+ test program.

The three year test deterred Medicare Eligible Military Retirees from participating in the program this year. This is a population of beneficiaries who cannot take risks in their health care, meaning to go into a three year test with no protection if the program ends. The continuity of health care for this senior population is not guaranteed in three years, therefore we request that these individual that are both in the program or will be enrolling in the program be grandfathered into the FEHBP 65+ test regardless of the success of the program.

The FY 99 Defense Authorization Act subtitle C Section 721 Demonstration Project to include certain covered beneficiaries within Federal Employees Health Benefits Programs clearly defined the eligibility and number of enrollees for the test program. As printed in legislation the total number of enrollees may not exceed 66,000, this was interpreted by the DOD as 66,000 total persons eligible to enroll in the test program. We knew that these designated 66,000 eligible participants would not all enroll because of the limited three year test program. Many of these participants may have employer provided insurance, Medicare Risk HMOs, Medigap policies, or have enrolled in TRICARE Senior Prime as in the case of the Dover, DE program. TREA would like to see the sites expanded nationwide and to increase the number of participants eligible to enroll.

TREA and other military association representatives went on record at a July 1, 1999 hearing in the House Civil Service Subcommittee stating the above concerns of implementing a fair test. DoD representative responded by saying that out of the 66,000 eligible participants, 70% would enroll. Seeing by the current 2,500 enrollment number, we feel that our arguments on implementing a fair test were not met. Remember that this program services a population of beneficiaries new to FEHBP, unlike retired Federal Employees who understand the program. It was essential that they knew how FEHBP works as a wrap health care coverage to Medicare, as well as if there were protections on their Medigap plans during this 3 year test. TREA feels that by marketing to an increased number of eligible beneficiaries, this committee will be able to have the data necessary to prove that this is a viable program for military retirees in the future.

TRICARE SENIOR PRIME DEMONSTRATION PROGRAM

TREA would like to thank you for your support for the Tricare Senior Prime Test program, Medicare Subvention. With the favorable response to this program by military retirees in those six designated test sites, TREA is asking for nation wide implementation of TRICARE Senior Prime. Senator Phil Gramm (R-TX) introduced S 915 to make the TRICARE Senior Prime program permanent on a phased - in basis. The bill would expand Senior Prime to ten additional locations with full-service military hospitals by January 1, 2001 and then across the remaining TRICARE Prime catchment areas no later than October 1, 2002. We are requesting that this committee provide funding to expand the Tricare Senior Prime Test nationwide to be effective Jan. 1, 2001. The test program terminates on December 31, 2000, we need legislative action for FY 2001 to move this program forward. In addition, Senator John Warner (R-VA) included a provision in his bill S 2087 to extend the TRICARE Senior Prime Test until 2005.

Many of our Medicare-eligible retirees have received letters from hospitals stating that "space availability" no longer exists or is extremely limited due to downsizing of staff at MTFs. Allowing as many Medicare-eligible military retirees to use Medicare at MTFs will provide them with yet another option for health care. Though it should be understood that this is not the complete solution to the current problem, as it would provide health service to 33% of the 1.4 million retirees over 65 now, it is an important piece to solving the whole health care dilemma for these beneficiaries.

The connotation of "TEST" has deterred some of our members from enrolling in TRICARE Senior Prime, though they want to participate, they have a lack of trust for the MTF that turned them away years ago only to welcome them back again with no guarantees of health care past the three year test. TREA has discussed this issue with our members that all conclude that they support the initiative to expand this program nationwide. I would like to add that S 915 would give DoD the option to provide a fee-for-service Medicare option at certain MTFs if this would be more cost effective for those facilities.

TREA urges the support for funding from this committee to expand TRICARE Senior Prime to a permanent program. This committee’s support would ensure expanding TRICARE Senior Prime to 10 additional sites by January 1, 2001 and national expansion on October 1, 2002 to provide a true health care benefit to military retirees that still reside near MTFs.

TRICARE : FULL FUNDING FOR ALL MILITARY BENEFICIARIES

In order to ensure the viability of TRICARE for all eligible beneficiaries to the program, it is necessary that TRICARE funding reflect the number of beneficiaries eligible for military health benefits, not just the ever-declining number of people able to use the military system the previous year. The overall Defense Health Programs continue to have funding shortfalls, TREA urges this committee to provide adequate funding for military readiness as well as the current peacetime component. Our active duty members need assurances that funding will enable access to quality health care for their families, as well as assuring incentives for these uniformed service members to be recruited and retained in the military. Also, the promise of this health care benefit must be kept for our military retirees that are over and under the age of 65.

Additional funding will be required to keep providers in TRICARE Prime networks as our members are experiencing physicians leaving the system. Most TRICARE managed care support contractors have negotiated TRICARE Prime reimbursement rates with network providers that are even lower than Medicare. Though the issue is a combination of low rates and physicians not being paid in a timely manner due to claims processing. TRICARE is giving physicians two disincentives for not signing up in the networks, low payment and slow payment.

TRICARE Standard (CHAMPUS) reimbursement levels are still much to low to attract quality health care providers. There are also unreasonable delays in reimbursement for TRICARE Standard (CHAMPUS) claims. Members have reported that in the more rural areas, and even some urban areas, where providers do not depend on a military patient base, health care providers have become increasingly unwilling to accept TRICARE Standard (CHAMPUS) patients at all. TREA feels that de-linking the CMAC (CHAMPUS maximum allowable charge) from the Medicare Schedule and authorizing higher payments to providers as necessary will improve access to quality care for our beneficiaries. The FY 00 Defense Authorization Act gave the Secretary of Defense the authority to go over the current CMAC rates to bring in providers into TRICARE networks, but TREA still see this being implemented.

The current claims processing system for TRICARE needs to be revamped in order to reduce the hassles of claims payment for physicians and beneficiaries. The beneficiaries end up getting caught in the middle when they receive collection notices from their creditors, even after they were told the claim would be paid by the TRICARE subcontractor. The FY 00 Defense Authorization Act moved to allow TRICARE contractors to use electronic processing for claims and streamlining the information flow, this being two pieces of the claims puzzle to be fixed. DoD has the authority to bring the claims system to "the best industry standard", but TREA has not seen any proposal or plan by DoD to implement a new program. We are requesting some accountability by this committee to the Secretary of Defense.

As we review the TRICARE program, the issues of low reimbursement rates and claims processing continue to be a disincentive for providers to sign up with a Prime network or to be a provider to accept TRICARE Standard. We will continue to work with this committee to address these issues, as well as the shortfalls in the overall TRICARE program too.

IMPROVEMENTS TO TRICARE PRIME:

TREA appreciates your support last year on improvements to TRICARE prime, but there are aspects of the program that still need to be improved upon. Now that all 12 TRICARE regions have been up and running two years in June of this year, TREA requests your support to:

• Provide Tricare Prime Remote for active duty family members.
• Provide monetary reimbursement for transportation costs incurred by beneficiaries that travel over 100 miles to attain specialty care.
• Eliminate co-payments for active duty personnel and their family members enrolled in TRICARE Prime.
• Provide a proposal or direct the Department of Defense to give a proposal to create efficiencies in the payment of claims processing. The FY00 Defense Authorization Act directed DoD to create a better mechanism for claim processing, but we have not seen any proposal or action on this issue. This continues to be a problem throughout the TRICARE regions, creating animosity for the program both from the beneficiaries and the providers.
• Ensure there is adequate quality control oversight of managed care systems (preferably by independent parties). Quality control oversight should include monitoring of patient satisfaction, assessment of clinical outcomes, adequate oversight of provider networks, and adherence to access standards in addition to utilization management.
• Ensure portability and reciprocity immediately for all beneficiaries under TRICARE Prime. We are still hearing that active duty family members get caught in a gap while moving from region to region. Therefore, greater continuity within contracts on the issue of portability and reciprocity is essential for having a seamless transition of care upon moving in and out of regions.

TRICARE STANDARD IMPROVEMENTS:

TRICARE Standard the fee-for-service option needs improvement to be at least the quality and standard of care as provided under FEHBP standard fee-for-service by:

• Reduce the catastrophic cap from $7,500 to $3,000.
• Eliminate the need for Non-availability statements (NAS) from military treatment facilities and clinics and completely eliminate the requirement for pre-authorization.
• Eliminate the 115% billing limit when TRICARE Standard is second payer to other health insurance.

S 2003—"KEEP OUR PROMISES TO AMERICA’S MILITARY RETIREES ACT"

We ask this committee to support Senator Tim Johnson’s (D-SD) bill S 2003, to provide FEHBP for all military retirees over and under 65. S 2003, requires Congress to pay for the entire cost of FEHBP for military retirees that entered active duty service on, or prior to June 7, 1956, when a statuary law stated that military retirees over the age of 65 could access healthcare if "space available" existed at the MTFs. Also, this bill would enable military retirees that signed up for the military after June 7, 1956 to become eligible for FEHBP, TRICARE Standard (CHAMPUS), or TRICARE Prime upon turning age 65. Currently, military retirees that turn 65 are dropped from military healthcare. This bill gives them back the "promise of lifetime healthcare" to the men and women who chose a 20 year career in the service not only to honor this nation but to be provided with benefits such as healthcare in their senior years. Finally, HR 3573 enables all military retirees to have access to FEHBP effective upon retirement from twenty or more years of active duty service.

This bill has strong grass roots support because it comes closer than any other pending legislation before Congress to answering the military health care promise to America’s military retirees, especially her older retirees. S 2003 has mobilized our members in grassroots campaigns across the nation to fight for their promised health care. TREA asks this committee to consider the fact that military retirees are dying at a rate of over 3, 784 a month, our members say "I will not be here to use a health care benefit after all of these tests end, I think Congress is waiting for us to die." These men and women dropped from military health care at 65, cannot wait any longer for a true health care benefit.

CARE FOR THE DISABLED

The statute which authorizes the CHAMPUS program prohibits the military health care system from delivering "custodial care." The statute does not provide a definition of the term. Originally, DoD interpreted the exclusion in a manner consistent with other federal health programs and how the term is understood in the health care industry generally. However, eleven years after Congress created the exclusion with no change in the statute or related legislative history, DoD reinterpreted the term "custodial care" in a manner which excludes care for those with permanent disabilities from the military health system.

DoD’s definition excluded custodial care encompassing medically complex skilled care. This approach is not found in other federal health programs with this statutory exclusion. Further, this approach has been rejected by Federal courts.

Changes in DoD’s policy and regulations regarding the disabled were ordered by the FY00 Defense Authorization Act and the FY00 Defense Appropriations Act. As of yet, DoD has not fully implemented these changes, nor has it provided the public an opportunity to participate in redefining the "custodial care" term as required by law. There is concern that DoD will not provide meaningful change without further Congressional legislation and oversight. Therefore, this committee should require DoD to redraft the definition for custodial care consistent with other Federal health plans and related case law.

TREA asks this committee to require DoD to, at a minimum, provide military families with the same amount of basic health services that are available through FEHBP. DoD should not continue to send dependents of service men and women into welfare programs in order to relinquish their responsibility to pay for needed skilled nursing care.

MEDICARE PART B WAIVER FOR MILITARY RETIREE 65+

Retirees were counseled by MTF advisors not to enroll in Part "B" because they resided near MTFs and would be able to access their free health care. These retirees should not be punished with late enrollment fees due to the fact that the local MTF has closed. TREA is requesting to authorize the waiver of the penalty for not enrolling in Medicare Part "B" for Medicare-eligible military retirees

TREA believes that this small investment will enable retirees to enroll in health care programs which require Medicare Part B for eligibility such as TRICARE Senior Prime and the Fee-for-Service Option plans in FEHBP. Currently, we have military retirees that either are paying a high penalty for Medicare Part B, or just cannot enroll because it is to costly.

RETIREE DENTAL PLAN

The Retiree Dental plan does not provide coverage of crucial benefits, such as bridges and crowns which are needs characteristic of our members. Currently, the contract is not subsidized by DoD, which would mean that increasing the benefit level now would make the program to costly to our aging retirees. Therefore, TREA is requesting funding for a subsidy for the DoD Retiree Dental plan’s premium to expand the benefit schedule to military retirees.

Other Personnel issues:

SURVIVOR BENEFITS

TREA members as well as all military retirees who have invested in the Department of Defense sponsored Survivor Benefit Plan (SBP), are frustrated by the off-set faced by survivors of military retirees once they reach the age of 62. Currently, a survivor of a military retiree would receive 55% of a military retirees retirement pay per month, if the retiree opted for full SBP. However, that amount will be reduced to 35% once the survivor becomes eligible for Social Security, regardless of whether or not they have earned Social Security from their own work experience or not. With the average enlisted retiree earning $16,000 per year, a Social Security-eligible survivor is left with only $6,600 in income from their spouses military service.

TREA, along with several other military retiree organizations, has worked closely with several members of Congress recently to eliminate this off-set. Last year, the Senate included legislation, outlined in S 763 sponsored by Senator Thurmond, which would increase the amount a survivor receives from the current 35% to 45% over a five year period. TREA strongly endorsed this language and was very disappointed when it was not included in the FY 2000 National Defense Authorization Act Conference Report.

We are currently working with members of both the House and Senate Armed Services Committees to include legislation eliminating the Social Security off-set, as defined in S 2268 by Senator Smith of New Hampshire. It is our hope that, finally, it will be included in the Conference Report of the National Defense Authorization Act. We request that this committee appropriate the resources to implement it.

Another issue of concern regarding SBP is the implementation of the paid-up SBP program. Slated to begin in 2008, this program will allow those retirees who have been paying into SBP for 30 years and have reached the age of 70 to cease making payments but still keep their spouses covered. While we applaud this program, it is TREA’s desire to move the start date up to 2003, as was called for in the original bill. As the program is currently set up, those retirees who enrolled in SBP when the program started in 1972 will pay far more than 30 years. We are currently working with members of Congress to have the paid-up program begin as early as possible. However, this committee would again have to appropriate the necessary dollars to implement it.

CONCURRENT RECEIPT

TREA would like to thank the members of this Committee who appropriated the necessary funding last year to begin the special pay program for the most severely disabled military retirees. This payment, which provides certain military retirees rated 70% disabled or higher by the Department of Veterans Affairs (VA) with a special pay ranging from $100 - $300, will be of great assistance to these disabled veterans.

TREA is grateful for this small step in addressing the fact that military retirees are the only class of federal retirees who have their retirement pay reduced when they receive VA disability compensation. The legislation passed last year only addresses a fraction of disabled retirees whose income is reduced because of their disability. We look forward to working with the members of this committee, as well as of the Armed Services Committee, to expand the number of retirees who can receive this special pay. Currently, disabled retirees who have served twenty years and those retirees who retired under early retirement legislation at the 15 year point are not eligible for this payment. Certainly, their inclusion is a matter of fairness and we look forward to quickly addressing this inequity.

The ultimate goal in this issue, as defined in S 2357, sponsored by Senator Reid, is complete concurrent receipt of military retirement pay and VA disability compensation.

CONCLUSION

Due to the continued downsizing of MTF staff, base closures, and depleting dollars for DOD health care, the Medicare Eligible Military Retirees continue to be pushed out of military health care. We need solutions to these problems. And as we know, there is no one solution. Therefore, implementing options for those that live near MTFs or those residing outside the catchment areas, through the Medicare subvention test and FEHBP 65+ demonstration, will enable DoD to administer health care to its aging heroes and heroines in the future. Even with full Medicare Subvention, TRICARE Senior Prime, we will only be servicing 33% of the overall population of military retirees over the age of 65. Some of our retirees have employer sponsored health care, 17%, and 10% already have Medicare Risk HMOs, leaving 32% to 41% of the 1.4 million population to access FEHBP. The number of 65 and over aged military retirees will not deplete but continue to grow in numbers to 1.6 million in 2004.

If this committee provides funding to expand the BRAC pharmacy benefit nationwide effective October 1, 2000, many Medicare eligible retirees will pick up this benefit first. TREA feels that providing a true pharmacy benefit will provide a solution to one of our members greatest needs, costly pharmaceuticals. Therefore, this creates a cost savings in the implementation of FEHBP and TRICARE Senior Prime in the future because the pharmacy benefit is less costly for those retirees that will take it as their health benefit on October 1, 2000.