1. TRICARE Prime Service Area Reductions January, 2013

2. 2 The primary purpose of a PSA is to augment the delivery of health care around military treatment facilities (MTFs) and Base Realignment and Closure (BRAC) sites The latest generation of TRICARE Managed Care Support Contracts (T-3) request for proposals released in 2007 did not require TRICARE regional contractors to develop PSAs in areas remote from MTFs The PSAs affected under T-3 are not close to existing military treatment facilities, and have never augmented care around MTF or BRAC locations. PSA reduction assists DoD in controlling health care costs – will save an estimated $45-$56M a year What is PSA Reduction? www.tricare.mil/PSA

3. PSA Reductions Of approximately 1.6 million retirees and family members currently in Prime, 171,000 potentially affected across all three U.S. regions No impact on Active duty service members and their families: Prime benefits maintained Affected Retirees and their family members living <100 miles from remaining PSA may be able to transfer their Prime enrollment No impact on Medicare eligible beneficiaries –TRICARE For Life and Pharmacy unaffected No Impact on Active Duty 3

4. 4 Impacted beneficiaries automatically have TRICARE Standard/Extra TRICARE Standard is similar to “open choice” health plans –You can choose any TRICARE authorized physician –No enrollment fees –No monthly fees –No referrals –Fewer authorizations Preventive care covered at no out-of-pocket cost includes: –Cancer screenings –Well child care –Immunizations TRICARE Standard

5. 5 Differences Between Prime and Standard

6. 6 Cost Comparison: Standard/Extra vs Prime Enrollment Fees Deductible In-Network Copay/ cost-share Point of Service Fees Annual Catastrophic Cap Prime $269.28/year individual $538.56/year family E.R. visit - $30 Outpatient visit - $12 Annual deductible plus 50% cost share $3,000/ year Standard/ Extra None E1-E4: $50 individual, $150 family E5 and above: $150 individual, $300 family 20% in- network 25% out- of-network None$3,000/year

7. Communication TRICARE is committed to keeping beneficiaries informed about changes in PSAs Multiple communication via US Mail; media, customer service support, web, Mil/Vet Assoc. Information will be updated at www.tricare.mil/PSA where you may also sign up for e- mail updates www.tricare.mil/PSA 7 Thank You for Your Patience

8. 8 Implementation Plan Highlights Action/TacticTarget Date PSA Contract modifications to West/North/South12/2012 Information Paper for Senior DoD Leadership/ Hill/ Surgeons; PSA Fact Sheet January 8, 2013 Tricare.mil/PSA launch January 10, 2013 Customer Service FAQs/Military Associations BriefedJanuary 10, 2013 Notify Interested MediaJanuary 10, 2013 TRICARE Region Communication to CommandsJanuary 10, 2013 Military Association Execs Full BriefingJanuary 10, 2013

9. 9 Implementation Plan Highlights ActionTarget Date HASC/SASC Full briefing January 16, 2013 Early notification letters for affected beneficiaries * February 7, 2013 * Dependent on Contractor Printing/Mailing ZIp Code Locator Tool on TRICARE Web February 7, 2013 MHS Conference02/11-14/2013 Customer Service Support in place for affected beneficiaries04/01/2013 Health Matters Newsletter (Prime) to 1.5 M05/2013 Media Roundtable with details; news articles; outreach to affected communities 05/2013

10. 10 Implementation Plan Highlights ActionTarget Date Second Notification Letter06/2013 Beneficiary Prime Health Matters Newsletter Article08/2013 Disenrollment letters for affected beneficiaries08/2013 Response to question/reinforce information stream 08/2013- 10/2013