The Pentagon has agreed to pay a health care provider about $200 million more than a competing contractor’s bid for military retirees’ Tricare services at the same time as it is asking retirees to pay large increases for their care.

UnitedHealthcare won the bid last week over TriWest, the health care provider for retirees in 21 western states since 1996, despite TriWest’s bid on the three-year, $20.4 billion contract that was about $200 million less than UnitedHealth’s winning offer, according to a source close to the competition.