If you have TRICARE or health coverage through the VA, you might be wondering if you need to enroll in Medicare.
Whether you have TRICARE or VA, it is a good idea to go ahead and enroll in Medicare when you are first eligible. When your benefits kick in, Medicare will become your primary insurance. If you decide to postpone your enrollment into Medicare, you may be subject to a late enrollment penalty. Depending on what level of military health benefits you qualify for determines if you need additional benefits like a Medicare Supplement or an Advantage Plan.
We talk to many people in a similar situation who wonder which parts of Medicare or additional coverages they might need.
Many are unsure how to navigate Medicare or if they even need to, once they become eligible.
Today we will talk about the role Medicare plays when you have TRICARE or VA benefits.
TRICARE for Life
TRICARE is medical coverage for active-duty and retired military members, as well as their dependents.
Once you are on Medicare, TRICARE automatically enrolls you in TRICARE for Life.
When you have TRICARE for Life and Medicare, Medicare becomes your primary insurance and is the first to pay your medical bills.
TRICARE is secondary and pays once Medicare has paid its portion.
To ensure that both Medicare and TRICARE will pay for your medical services, you will want to be sure that your healthcare provider accepts both Medicare and TRICARE.
TRICARE & Part A
If you are retired from the military and have TRICARE, you must get Medicare Part A (hospital insurance). Usually when you become eligible.
Social Security automatically enrolls most people into Medicare Part A at no cost when they turn 65.
If you or a spouse has not worked long enough to qualify for premium-free Part A by the time you turn 65, you can do one of two things:
- Contact Social Security to enroll and pay a monthly premium for Part A.
- Continue working until you do qualify for premium-free Part A.
We talked more about Part A and how to qualify for it in another post, which you can read here.
TRICARE & Part B
You must also enroll in Part B (outpatient medical coverage) to keep your TRICARE coverage.
Suppose you are drawing Social Security retirement or Railroad Retirement Board benefits.
Social Security will automatically enroll you in Part B when they enroll you in Part A.
If you are not yet drawing retirement benefits, you have to contact Social Security to enroll in Part B.
You will pay a monthly premium for Part B.
The standard is $144.60 (in 2020), but higher earners can sometimes pay more. Find the updated chart here.
We talked more about Part B, qualifying for it, enrolling in it, and its monthly premium in another post you can read here.
If you do not sign up for Part A and Part B when you are initially eligible to do so, you can be subject to late enrollment penalties.
TRICARE & Medicare Supplements
Medicare Supplements are plans that you can purchase from private insurance companies in addition to Part A and Part B to help minimize your out-of-pocket expenses on Medicare.
Original Medicare, or Part A and Part B, cover 80% of your medical expenses.
Supplements help cover the other 20%.
Many people with TRICARE choose not to purchase a Supplement and allow their TRICARE coverage to act as their Supplement.
In this case, Original Medicare is their primary insurance, while TRICARE is secondary.
In fact, if you have TRICARE, you do not need a Supplement at all.
Unlike TRICARE, if you have a Medicare Supplement, you can see any healthcare provider in the country that accepts Medicare.
You do not need any referrals.
TRICARE does require prior authorizations and referrals for certain services.
There are also more providers nationwide who accept Medicare. Adding to the number of providers available.
Medicare Supplements are optional regardless of whether you have TRICARE – usually offering more benefits. If you want the freedom of a Medicare Supplement, this is something you may want to consider.
Always remember to compare them side by side. Sometimes a Supplement may cost more than the out-of-pocket you may incur with TRICARE. Every situation is different.
We talked about Medicare Supplement plans in more detail in another post, which you can read here.
TRICARE & Part D
Medicare Part D is prescription drug coverage.
You can purchase Part D plans through Medicare-approved private insurance companies.
Most people who have TRICARE do not purchase a Part D prescription drug plan because TRICARE provides drug coverage at no additional monthly cost.
You pay a monthly premium for Part D drug plans, and most have an annual deductible of around $400 or more.
There is a copay for certain drugs with TRICARE.
There is also a copay on many medications with Medicare Part D.
Some people with TRICARE will still purchase a Part D drug plan because they get more freedom and flexibility with pharmacy choice. This usually happens if the medication these people are better covered with Medicare than with Tricare. Just like we mentioned above, everyone’s situation is different.
Still, keeping and using your TRICARE prescription drug coverage is almost always a more cost-effective option.
We talked about Part D in more detail in another post, which you can read here.
VA Healthcare Benefits
The Department of Veterans Affairs (VA) provides medical coverage to eligible veterans of the United States military.
VA coverage is entirely separate from Medicare, meaning the VA will only pay for VA facilities’ services.
Medicare will only pay for medically necessary services received by providers who accept Medicare.
Many people who have VA coverage can also have Medicare. Both Medicare and the VA strongly recommend it.
VA Benefits & Part A
Remember, Medicare Part A is hospital insurance.
Social Security automatically enrolls most people when they turn 65.
If Social Security does not automatically enroll you in Part A, it is best to sign up as you are eligible.
Having Medicare Part A will cover you for inpatient hospital services you receive anywhere that accept Medicare.
Having VA benefits alone will only cover you for services received at VA hospitals and nowhere else.
VA Benefits & Part B
As we mentioned above, Medicare Part B is outpatient medical insurance.
Social Security automatically enrolls some people in Part B at the same time as Part A.
If Social Security does not automatically enroll you, you should sign up as soon as you are initially eligible.
Although you pay a monthly premium for Medicare Part B, you can see doctors and specialists outside of the VA’s network of providers. However, if you use Medicare in a facility that is not covered by the VA, you’ll pay a portion of the medical bill that is not covered by Medicare (usually 20%). This is where a Medicare Supplement or an Advantage plan comes in handy.
Medicare does not require prior approval for medically necessary services, while in some situations, the VA does.
Also, it is ideal to have Medicare Part B if, for some reason, you become ineligible for your VA benefits at some point.
You may also be subject to a late enrollment penalty if you do not enroll in Part B when you are initially eligible and then sign up later.
The Part B late enrollment penalty increases the longer you go without Part B while you are eligible for it.
VA Benefits & Medicare Supplements
As we mentioned above, Medicare Supplements are plans you can purchase in addition to Part A and Part B to help minimize your out-of-pocket expenses on Medicare.
Many people with VA benefits usually choose to purchase a Medicare Supplement.
Medicare Supplements allow you to see any provider or go to any facility nationwide that accepts Medicare.
There is much more freedom and flexibility than having VA benefits alone.
Many people do not live near VA facilities and having Medicare with a Supplement is much more convenient.
You are also guaranteed any Medicare Supplement you apply for when you are initially eligible for Medicare, making it the best time to get one.
If you become ineligible for your VA benefits at some point, later on, you’ll need to health qualify if you decide you want a Supplement Plan once you are out of your initial Medicare enrollment period, learn more about enrollment periods here. If you are too sick, you may not be able to qualify.
Health qualifying means you must answer health questions on the application when you apply for a Supplement.
Companies can deny you coverage if you have certain pre-existing conditions.
VA Benefits & Part D
As we mentioned above, Medicare Part D is prescription drug coverage.
Many people with VA benefits choose not to pay for a Part D prescription drug plan since they have prescription drug coverage through the VA.
There are two main reasons that some people with VA benefits will choose to pay for a Part D prescription drug plan:
- A Part D plan gives them more options with pharmacy choice.
- Part D plans cover drugs prescribed by non-VA providers.
Unlike with part B, if you choose not to enroll in a Part D plan, you will not be subject to a late enrollment penalty if you decide to enroll in one later.
This penalty is waived if you have drug benefits through the VA.
Learn more about Medicare Part D drug plans here.
TRICARE, VA Benefits, & Advantage Plans
Medicare-approved private insurance companies offer Medicare Advantage plans to cover all your Part A and Part B services.
Just like Supplements, Advantage plans help minimize your out-of-pocket expenses on Medicare.
Advantage plans have maximum yearly out-of-pocket amounts that are often very high and restrict you to a network of providers and facilities, making them much different and much less flexible than Supplements.
If you have TRICARE, you will want to use caution if you are considering an Advantage plan.
Advantage plans restrict you to a network of providers.
It may prove not easy to find providers that accept both your Advantage plan and TRICARE.
Original Medicare with a Supplement covers you for services received from any provider or facility nationwide that accepts Medicare.
It is much more likely that you will find providers that accept original Medicare and TRICARE versus trying to find a provider that will take an Advantage Plan.
If you have VA benefits an Advantage Plan may be a good option since Advantage Plans are much more flexible than the VA.
We talked about Advantage plans in more detail in another post, which you can read here.
As you can see, Medicare works very differently with TRICARE than when you have VA benefits.
If you have TRICARE, you need to enroll in Part A and Part B to keep your TRICARE benefits.
If you have VA benefits, you do not need to enroll in Medicare to keep them even though Medicare and the VA recommend having both.
Opting to have just the VA as coverage, you can also face late enrollment penalties if you delay enrolling in Medicare.
Additional coverage, like Supplements or Advantage Plans, may not be necessary but can provide more options and better coverage.
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