How to optimize Medicare for those who have served in the military

Updated: November 23, 2023

Active duty, retired, or veterans of the military should be aware of the intersection and interaction between Medicare and TRICARE health coverages. This is important so they can make full use of their healthcare benefits.  

If you are still in active duty, a veteran, or retired from the US military, it’s crucial that you know that you may be an eligible recipient of both TRICARE and Medicare. In this article, get to know how TRICARE for Life and Medicare can work to your advantage in providing for your healthcare needs.  

Medicare basics 

What is Medicare? In a nutshell, Medicare is the federal health insurance program for eligible recipients. Those who may be eligible for this program are:  

• People aged 65 or older 
• Younger people who have disabilities 
• Patients with Lou Gehrig’s disease or Amyotrophic Lateral Sclerosis (ALS) 
• Patients with Mesothelioma 
• Those suffering from End-Stage Renal Disease (ESRD); particularly those suffering from permanent kidney failure that calls for dialysis or a kidney transplant  

Medicare Components 

here are different sections of Medicare, denoted simply as parts A, B, C, and D:  

Part A: Provides inpatient or hospitalization coverage, including skilled nursing facility care, home health, and hospice care. 

Part B: Provides outpatient or medical coverage, including preventive care, doctor’s services, hospital outpatient services, durable medical equipment, lab tests, x-rays, mental health care, and select home health and ambulance services.  

Part C: Provides an alternative way to supply Medicare benefits; this is an alternative to Original Medicare. This allows private health insurance companies to provide the same Medicare benefits as Original Medicare.  

Part D: Provides for the prescription drugs necessary to manage the patient’s illness. Part D is available only through private insurance companies contracted by the government.  

In general, the different parts of Medicare cover specific services. In most cases, beneficiaries choose to receive their Part A and Part B benefits from Original Medicare, which is the usual fee-for-service type that’s offered by the federal government.  

“Original Medicare” is sometimes called Fee-for-Service or Traditional Medicare. In Original Medicare, the government makes direct payments for the health care services you receive. When you are under Original Medicare, you can see any doctor or go to any hospital in the country that is affiliated with Medicare.  

Key points about Original Medicare 

The salient points to remember about Original Medicare are:  

• Those under Original Medicare must go directly to the hospital or doctor where they wish to get treatment. Patients under Original Medicare do not need to secure any authorization or permission from Medicare or a primary care doctor before receiving treatment or care.  
• Patients under Original Medicare pay monthly premiums for their Part B. In some cases, patients also pay a premium for Part A.  
• Typically, you must also pay coinsurance for each service you receive. 
• There are set limits on the amounts that doctors and hospitals can charge for their services. 

Should you need prescription drug coverage to use in tandem with Original Medicare, you will need to choose and join a standalone Medicare private drug plan.  

Those with limited income who meet the eligibility requirements can use government programs to reduce their healthcare and prescription drug costs.  

Original Medicare is the default program for anyone eligible. Should you decide to get your Medicare benefits from Part C or Medicare Advantage Plan/Private Health Plan, you must still pay for your Part B and/or Part A monthly premiums as well. Luckily in 2023, Medicare is easier to enroll in and cheaper to pay (for now).  

A Medicare Advantage Plan must also provide all of the Part A and Part B services that come with Original Medicare. However, such a plan can come with varying costs, rules, and restrictions that can affect how and when you receive your healthcare.  

For example, if you used Original Medicare, you could go to almost any doctor or hospital in the country.  As for Medicare Advantage Plans, these can be restricted to specific networks of doctors or hospitals, limiting your choices. On the flipside, Medicare Advantage Plans can have other benefits not present in Original Medicare, such as routinary eyecare and dental plans.    

TRICARE and TRICARE for Life (TFL) basics 

TRICARE is the health insurance program of the federal government that’s primarily offered to military personnel, both active duty and retired. This health insurance program is also offered to their family members.  

TRICARE is the primary healthcare program, while TRICARE for Life is a program specifically for military retirees and their dependents. The caveat is that to qualify for TRICARE for Life, they must also be eligible for Medicare.  

TRICARE for Life works to supplement Medicare benefits. Typical features include:  

• Coverage for Medicare cost-sharing for coinsurance, copayments, and deductibles 
• Coverage of services not under Medicare, or when Medicare benefits have been used up  
• Tricare for Life coverage and cost-sharing rules may apply 

Who may be eligible for TRICARE? 

Those who can be eligible for TRICARE include:  

• Active-duty service members and families 
• Retired service members and families 
• Retired Reserve members and families 
• Beneficiaries eligible for TRICARE and Medicare 
• National Guard/Reserve members and families 
• Survivors 
• Children 
• Former spouses 
• Medal of Honor recipients and families 
• Dependent parents and parents-in-law 
• Members of Foreign Forces and their families 
• Those registered in the Defense Enrollment Eligibility Reporting System (DEERS). 

The eligibility requirements vary for each type of person above. 

Medicare and TRICARE for Servicemen 

TRICARE looks after the healthcare needs of active and retired members of the military service, along with their families worldwide. Meanwhile, Medicare is the federal healthcare program for taking care of US citizens aged 65 or older, younger persons with disabilities, those with end-stage renal disease, ALS, or Mesothelioma.  

In certain cases, some military personnel may be eligible for a combination of these healthcare programs.  

Once a serviceman becomes eligible for Medicare when they turn 65 (unless they meet certain exceptions), they will have to get Medicare to stay eligible for TRICARE. This means that they’ll have to enroll during their Medicare Initial Enrollment Period.  

If you retire from the military and receive TRICARE benefits before age 65, your coverage automatically becomes TRICARE for Life once you enroll in Medicare.  

If you don’t enroll in Medicare by age 65, your TRICARE benefits will end the first day of the month you turn 65. 

After turning 65, service personnel will have up to 90 days to change their TRICARE health plan. The plan they switch to will depend on their individual needs, how they qualify for Medicare, and their or their family’s active-duty status and which of the TRICARE plans they’re still enrolled in.  

Most people who have a TRICARE plan and become eligible for Medicare and get Medicare’s Part A should also have Part B coverage to keep their eligibility status. Part D is not needed to keep eligibility.  

You can remain eligible for TRICARE without enrolling in Medicare Part B only if you: 

• are currently an active-duty service member 
• are currently an active-duty personnel’s family member 
• are enrolled in the US Family Health Plan, TRICARE Reserve Select, TRICARE Retired Reserve, or TRICARE Young Adult  

It’s important to remember that servicemen or beneficiaries must enroll in Part B once they reach the age of 65, or they can lose eligibility for TRICARE benefits. Only those who already have health insurance from their or their spouse’s employer can put off enrolling in Part B.  

Also, when you become eligible for Medicare, your spouse’s age, the age of your covered family members, and the TRICARE plan each of you are using, all influence your coverage choices.  

How does TRICARE For Life work? 

This works by providing supplemental benefits to those eligible for TRICARE, who have Medicare Parts A and B.  

Having Medicare Parts A and B, while paying for Part B premiums, gives a beneficiary automatic coverage of TRICARE for Life. There is no additional fee for enrolling in TRICARE for Life.  

TRICARE for Life can be used worldwide and no formal enrollment is necessary. This program offers additional or secondary coverage apart from Medicare in the US and its territories. If the beneficiary is overseas, the primary payer of these benefits is TRICARE for Life.  

How does TRICARE For Life work with Medicare plans? 

TRICARE for Life can be used in tandem with Original Medicare (Part A and B), a Medicare Advantage Plan (Part C), or even the Part D plan that provides prescription drugs.  

Consider carefully whether you wish to use Part D with TRICARE for Life. TRICARE for Life already includes a benefit that provides prescription drugs, so Part D may be unnecessary.  

However, if you have TRICARE for Life, you can enroll in Part D at any time. One advantage of TRICARE for Life’s drug benefit is that it’s considered “creditable coverage”, so you can sign up for it without paying the penalty for late Part D enrollment.  

Here’s a video that explains how some veterans can leverage Medicare and TRICARE. The host also reminds us of the consequences of not having Medicare Part B when you turn 65 (spoiler alert: it’s not good for your TRICARE plan).  

How do Medicare and TRICARE for Life pay for medical costs? 

When you visit any authorized healthcare provider in the US and US territories, Medicare will be the primary payer. So how do these two programs work to pay your healthcare costs? They co-pay the claims in this manner:  

• The authorized healthcare provider will file the claim with Medicare.  
• Medicare pays the part of the claim it’s responsible for, then sends the claim to the TRICARE for Life claims processor.  
• TRICARE for Life then pays its portion directly to the provider for the services covered. 

Why don’t I get issued a TRICARE wallet card when I sign up for TRICARE for Life and Medicare?  

When you have both of these programs, issuing a TRICARE wallet is no longer necessary. The only proof of coverage you need when you go to a hospital are your military ID and Medicare plan card.  

What happens if a person dies, and they have unused Medicare premiums? 

Should a person die before they use their premiums, their surviving family members can have unused premiums refunded to them.  

Does TRICARE pay at Medicare rates? 

In a way, it does. Whenever practical, TRICARE is linked by law to Medicare’s allowable charge and can vary based on the prevailing rate at a specific location. 

There is a maximum amount that TRICARE can pay a healthcare provider for a service or procedure; this is known as the TRICARE allowable charge.  

Most active-duty, retired, and veteran military personnel can enjoy the benefit of coverage from a variety of military healthcare options.  

As with the civilian healthcare system, if a service person becomes eligible for Medicare, they must consider what options are available to them, particularly in relation to Medicare Part B.  

It’s vital for military retirees to verify that their healthcare providers are authorized to accept both Medicare and TRICARE (or TRICARE for Life) reimbursements to avoid any out-of-pocket expenses on their part. 

By getting familiar with TRICARE and Medicare, individuals who served in the military can optimize their healthcare benefits. With these programs working in tandem, members can receive the healthcare that they and their families deserve for their service. 

Did this article help you navigate the details of TRICARE and Medicare for your retirement and healthcare needs? Are these programs enough or do you find them lacking? Let us know in the comments!