Options for Improving Access to Health Care for Retirees

CNA was asked to determine the costs of extending three different types of benefits to the Medicare-eligible population. The first options would extend the National Mail Order Pharmacy (NMOP) program. The second option is to offer the DOD Medicare-eligible beneficiaries enrollment in the Federal Employee Health Benefits Program (FEHBP). The third option is to offer a Medicare supplemental insurance package sponsored by DOD. The three plans offer different sets of benefits and a wide variation in cost. The least expensive plan is the NMOP, costing about $267 million. The most expensive plan would be to offer FEHBP, costing DOD about $1.6 billion. In the middle of these two plans is our proposed Medigap subsidy in which DOD could design and offer its own unique Medigap plan covering core benefits. It would cost around $600-$650 million.