July 16th, 2020 BY Jennifer Davis
If you have TRICARE benefits and you’re turning 65 soon, you might be wondering how your current coverage works with Medicare. Are they compatible? Who pays first? And what about Medicare Advantage?
You might also get stacks of mailers as your 65th birthday approaches, trying to sell you on the idea of Medicare Advantage. These private health plans cover all the same benefits as Original Medicare but with extras, like dental, vision and hearing aids (to name a few).
We want to clear up some confusion about how TRICARE works with Medicare and some of your options for health insurance as a senior with military benefits. Here’s what you need to know.
What is Medicare?
First, let’s talk about Medicare. Original Medicare is made up of two parts: Part A (hospital coverage) and Part B (medical coverage). It’s a program designed for Americans aged 65+ and younger people with certain disabilities. Under Original Medicare:
- Part A usually doesn’t have a premium. You likely won’t pay anything per month for this portion, which covers care from hospitals and skilled nursing facilities. There are still deductibles and coinsurance, though, for your actual care.
- Part B has a monthly premium that varies each year. In 2020, it’s $144.60 a month for Part B, which covers medical care. That includes outpatient care, doctor’s visits, vaccines and other “medically necessary” services. Part B also has a 20% coinsurance rate, meaning you’ll pay 20% of your covered medical costs.
- There are exclusions for care. Original Medicare doesn’t cover prescription drugs; routine dental, vision or hearing services (including hearing aids); acupuncture; routine foot care and select other services.
- You can see any provider who accepts Medicare. There are no networks.
Original Medicare is popular.
But Medicare Advantage, the private version, is also an increasingly popular choice among America’s seniors today. Just over a third of people with Medicare (36%) now have a private plan. It’s not hard to see why. Medicare Advantage:
- Covers everything that Original Medicare covers (by law) and
- Includes coverage for extra benefits, like prescription drugs, dental and vision, hearing aids, gym memberships, transportation, meal delivery and other added services. Plans vary because they’re private.
Medicare Advantage combines all of the benefits of Original Medicare, a Part D prescription drug plan and extra benefits into one plan.
Members still pay for their Part B premiums, but they may not have an extra premium for Medicare Advantage. It depends on the plan.
Many plans come with $0 premiums, though, making Advantage an attractive choice for most seniors.
How does TRICARE work with Medicare?
If you already have a TRICARE plan, then you know that it’s good coverage. And fortunately, that won’t change after you turn 65. Once you become eligible for Medicare, though, TRICARE takes a backseat thanks to “coordination of benefits” rules.
Coordination of benefits just means that if you have more than one health insurer — in this case, Medicare and TRICARE — one of those entities will pay first:
- For active-duty TRICARE enrollees, TRICARE pays first.
- If you’re not active duty and you have TRICARE for Life (TFL), Medicare pays first for Medicare-covered care.
- Once Medicare pays its portion, TFL pays its share.
Bottom line? You can have both Medicare and TRICARE. They work together to cover your medical care as you get older.
In fact, in order to keep your TRICARE benefits once you’re 65, including prescription drug coverage, you must enroll in both Parts A and B.
Note: If you have questions about eligibility requirements and other specifics about your TRICARE coverage, contact TRICARE directly.
Medicare Advantage and TRICARE
For many people with Medicare and TRICARE, the combined benefits of these programs are enough to cover nearly all healthcare expenses. Once Medicare pays its portion, TRICARE picks up the rest (for non-active duty members). And because TRICARE for Life covers prescription drugs and has an optional dental plan, military seniors benefit from robust coverage.
That said, there may be added benefits to getting a Medicare Advantage plan instead of Original Medicare if you have TRICARE.
For one thing, exclusions still apply.
Remember that Original Medicare doesn’t cover everything. If you need routine hearing care or hearing aids, for instance, then you might have to pay out of pocket or use another government program to fund them.
The same is true of TRICARE. It covers a lot, but there’s a hefty list of exclusions that might be important to you.
Plus, while TRICARE will cover most of your out-of-pocket costs under Medicare, there are some services that Medicare covers that TRICARE doesn’t, such as chiropractic care. And if neither TRICARE nor Medicare covers a treatment or service, then you’ll likely have to pay out of pocket for the full cost.
Medicare Advantage offers a potential solution for these coverage gaps because many Advantage plans cover benefits that Original Medicare doesn’t.
By law, these private health plans must cover at least what Parts A and B cover. Beyond that, they can create more comprehensive packages that include dental, hearing, vision and more.
And by “more,” we mean a lot more in some cases. The federal government allows Medicare Advantage plans to get creative. You might find plans that cover things like:
- Meal delivery after a hospital stay
- Transportation to doctor’s appointments or errands
- 24/7 nurse support lines
- Fitness memberships
- Incentive programs for staying healthy
- Monthly or quarterly credits for over-the-counter items
Even if you like the idea of Original Medicare and you have TRICARE, it’s worth looking at Medicare Advantage plans in your area. Because they cover everything that Original covers plus added benefits, they may make more sense for you.
Prescription Drug Coverage
Original Medicare does not cover prescription drugs. The exception is that certain drugs administered in a hospital — like chemotherapy drugs — are covered under Part B. To get prescriptions with Original Medicare, members need to buy a separate, private Part D plan.
Alternately, Medicare enrollees can buy Medicare Advantage with built-in drug coverage. In fact, one of the key selling points of Medicare Advantage plans is that many of them include prescription drug benefits. This eliminates the need to buy separate plans for everything.
But as a TRICARE member, you probably don’t need to worry about that. TRICARE for Life includes prescription drug coverage.
That doesn’t mean you can’t still benefit from a Medicare Advantage plan, though.
Some Advantage plans don’t cover prescription drugs, which may bring down the monthly cost. Plus, you would benefit from all the other added perks.
You’ll note that we said you “probably” don’t need to worry about drug coverage under TRICARE. For most members, TRICARE drug coverage will be enough.
But your case might differ.
If you need medications that TRICARE doesn’t cover and you don’t have Part D coverage — which, again, is not included under Original Medicare — then you would have to pay out of pocket for it.
Make sure your medications are covered under TRICARE. If they’re not, and there’s no workaround for getting them, then look into a Part D plan.
Or better yet, consider a Medicare Advantage plan with a $0 premium and included drug coverage. Many Medicare Advantage plans don’t cost anything extra on top of the Part B premium, which is something you have to pay even with TRICARE.
Medigap Supplement Plans
If you don’t want a Medicare Advantage plan, you can enroll in something called a Medicare supplement plan, also known as Medigap. Only people with Original Medicare can get a Medigap plan. The basics:
- There are 8 Medigap policies currently available to newly eligible Medicare enrollees, labeled by letter: A, B, D, G, K, L, M and N.
- Medigap policies cover various out-of-pocket costs under Original Medicare, like the Part A deductible or Part B coinsurance rate.
- Every Medigap plan of the same letter type covers the exact same benefits no matter where it’s sold or the company it comes from. In other words, Plan G looks the same whether you get it in Florida or Kansas. (The exceptions are Massachusetts, Minnesota and Wisconsin, which standardize their Medigap plans individually.)
- Even though Medigap plans are standardized, cost can vary widely depending on where you live and the company selling it.
As a TRICARE member, it’s unlikely that you would need a Medigap plan.
Together, TRICARE and Medicare cover most of your out-of-pocket costs (with some exceptions). But since your costs and care may differ, just know that you can have a Medigap plan with TRICARE.
Think about your healthcare needs and your budget as you decide which kind of coverage you do — and don’t — need.
How to Get Medicare Advantage with TRICARE
If you don’t qualify for Medicare because of a disability, then your benefits will start at age 65. But whether you have to sign up for it or not depends on your situation:
- If you already get Social Security benefits or benefits from the Railroad Retirement Board, you’ll be enrolled in Parts A and B automatically. Coverage starts on the first day of the month you turn 65. (If your birthday is the first of the month, coverage starts the first day of the month before.)
- If you don’t get Social Security or RRB benefits, you’ll need to enroll in Part A and Part B yourself to trigger your TRICARE for Life benefits.
Initial Medicare eligibility lasts 7 months: 3 months before you turn 65, the month you turn 65 and 3 months after. So if your birthday is August 5th, for example, then your initial window to sign up for Medicare runs from May 1st through November 30th. You have 7 full months to enroll.
Note: Make sure you coordinate your enrollment with your existing TRICARE benefits so you don’t hit a break in coverage. Talk to a rep with TRICARE for more information.
Once you sign up for both Medicare Part A and Part B, you can shop around for a Medicare Advantage plan if you want private coverage. You have to be enrolled in both parts to get an Advantage plan.
For specific eligibility and enrollment questions about TRICARE, check out the TRICARE website or Medicare.gov. We’ve offered general tips here to get you started.
Turning 65 comes with a host of decisions about your medical coverage, especially if you already have benefits through TRICARE. But you can have TRICARE and Medicare Advantage together. These health benefits work together to ensure that you have good coverage as you get older. You have options for Medicare. Explore them all before you commit to a plan.