Editor’s Note: This article is part of MOAA’s 2021-22 TRICARE Guide, brought to you by MOAA Insurance Plans, administered by Association Member Benefits Advisors (AMBA). A version of the guide appeared in the November 2021 issue of Military Officer magazine; this article has been updated to reflect figures released in October 2021.  

Each year, retirees and surviving spouses get a cost-of-living adjustment (COLA) to retired pay, survivor benefit plan annuity, Social Security, VA disability compensation, and Dependency and Indemnity Compensation (DIC). COLA is computed based upon the change in Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from one fiscal year to the next.

The CPI-W is updated monthly; the final three months of the fiscal year are averaged together and compared with the same period of the previous year to determine the COLA increase. This year, that means a 5.9% bump, the highest in decades. Beneficiaries will see a $59 increase on every $1,000 of benefit. Great news, right?

[TRACK THE CPI-W: MOAA’s COLA Watch]

Unfortunately, many recipients forget COLA also impacts what we pay for health care. TRICARE Prime/Select enrollment fees and co-pays are adjusted each year dependent upon COLA increases. With a 5.9% increase, you can expect a 2022 TRICARE Prime annual enrollment fee of $642 (up from $606 in 2021) and a 2022 TRICARE Select fee of $318 (up from $300).

The actual increase to the TRICARE Prime enrollment fee over the past two years has been slightly less than COLA (TRICARE Select imposed an enrollment fee for the first time in 2021). For example, TRICARE Prime enrollment increased 1% from 2020 to 2021 instead of the 1.3% COLA and increased only 0.5% from 2019 to 2020 instead of 1.6%.

An educated guess, for planning purposes, would put the $642 and $319 enrollment fees cited above for Prime and Select in 2022 as the increase ceiling on those figures.

Medicare Part B premiums, while not tied directly to CPI-W, do increase annually based on economic factors, including the cost of the Medicare program. These income-based premiums increased 2.9% for the lowest income bracket in 2021.

[RELATED AT MEDICARE.GOV: Understanding Part B Costs]

No one should be unhappy about the largest COLA increase over the last 14 years. The unfortunate downside is that COLA also impacts our health care costs. You can follow COLA progress through MOAA’s COLA Watch. 

Click the below links to read more MOAA content on COLA:

• Why a large spike may generate congressional action
• A look at MOAA's battle to protect COLA throughout the years
• Could ‘Chained CPI’ make a comeback?

Click the below links for more information on Medicare:

• Q&A on Medicare Part B premium increases
• From MedicareGuide.com: How Much Does Medicare Cost?
• Learn more about Part B premium adjustments and the hold harmless provision