MOAA Answers More of Your Health Care Transition Questions
Annie Goshay, a Phlebotomist with the Air Force's 88th Medical Group, prepares a military retiree for a blood donation at Wright-Patterson AFB, Ohio. (Photo by Bill Hancock/Air Force)
Paul Frost, a retired Navy Captain, was appointed as the Program Director, Financial and Benefits Education/Counseling/Veteran Services in March 2015. Paul is co-lead with Lt Col Shane Ostrom, CFP®, USAF (Ret) on MOAA's Financial and Benefits Education program and is also an Accredited Veteran Service Officer (VSO), providing VA disability compensation claim and appeal information and advice to the currently serving, retiree, veteran and military family community. In Nov 2016, he completed a rigorous training track and certification as an Accredited Financial Counselor (AFC®).
MOAA followed its most recent webinar with a story that included the most pertinent questions and answers received that day. You can view the article and those initial questions here, which includes a link to the archived webinar recording for your listening and viewing pleasure.
Many other relevant questions we left off this article due to space limitations, and we wanted to offer a second view of some of the most often asked questions/answers on this important topic.
(MOAA Life and Premium members have access to financial and benefits experts on these topics and others; they can email firstname.lastname@example.org with any questions. To become a MOAA member, join here.)
Q. Are monthly premiums required individually or as a couple? If as a couple we make less than $170,000 filing jointly, do we each pay $135 per month, per the Medicare IRMAA (Income-Related Monthly Adjustment Amount) table?
A. Yes, everyone turning 65 “ages” in Medicare Parts A and B individually, and must pay the Part B premiums. The premiums are per person, and based on your most recent IRS filing on record, which is typically from two years prior.
Each year your premium can change as your 1040 from two years ago changes. If your income increases to the next IRMAA bracket, your Part B premiums will increase, and vice versa. When the older spouse reaches 65, the younger spouse remains in TRICARE (or other eligible heath care program) until he or she reaches 65. When younger spouse also reaches, 65 he or she must enroll under Medicare/Tricare for Life (TFL).
Q. I purchased MOAA’s MEDIPLUS® TRICARE Supplement Insurance Plan – what happens when I turn 65?
A. You no longer require a TRICARE supplemental plan once you “age into” Medicare and TRICARE for Life. TFL acts as your Medicare supplemental insurance plan (assuming you have enrolled and begun paying your Part B premiums). Do not assume that your MEDIPLUS plan will automatically terminate. Coordinate with our plan administrator, Mercer Health & Benefits Administration LLC, at 1-800-247-2192 to ensure a drop in coverage for those aging into Medicare and continued coverage for family members remaining in TRICARE.
Q. How does TRICARE and Medicare/TFL work for retirees and dependents living overseas?
A. Retirees and dependents under age 65 can enroll in TRICARE Select Overseas. This program is very similar to TRICARE Select, providing comprehensive coverage in all overseas areas. TRICARE Select Overseas does come with some additional costs; beneficiaries must pay the enrollment fees of TRICARE Prime, but the annual deductibles and co-pays are the same as TRICAE Select. You should expect to pay up front for care and file your own claims to get reimbursed.
Outside the U.S. and U.S. territories, nonparticipating non-network providers can charge any amount for care. You’re responsible for paying any amount that is above the TRICARE-allowable charge in addition to your deductible and cost shares.
Retirees and dependents age 65 and older living overseas, just like their counterparts living in the U.S., must enroll and pay Medicare Part B premiums to be covered by TFL. The difference is that Medicare will not pay an overseas medical provider for retiree or dependent health care.
So, why enroll in Medicare if they won’t pay for your overseas care? Because TFL acts as your primary coverage in this situation. You’re technically paying Medicare, but you’re actually getting the equivalent of TRICARE Select Overseas coverage for the price of Medicare. Many expats think this is unfair, but if you were living in the U.S. you would still lose TRICARE at age 65 and have to pay for Medicare in order to receive TFL.
Q. How does VA health care work with TRICARE and Medicare/TFL?
A. Having access to VA health care provides additional flexibility for retirees who qualify for both programs. First, you must understand that these programs don’t mix! If you use TRICARE or Medicare/TRICARE for Life, the VA won’t pick up any co-pays. If you use VA health care, TRICARE or Medicare/TFL won’t pick up any residual deductibles or co-pays.
To use VA health care, you must have a VA disability rating, which means you must have submitted a VA disability compensation claim that must have been adjudicated with a least one service-connected disability of at least 0%. Without a VA disability rating, the VA prioritizes access to VA health care based on financial need. If a veteran’s income exceeds what is generally considered the poverty level, the VA puts you in Priority Group (PG) 8 – which means you’ll almost never be able to be seen in a VA medical facility.
Veterans with a disability rating of 50% or higher are in PG 1, which means all of their health care needs (including medications) are covered by the VA. Veterans with ratings 40% and below are assigned to PGs 2-8 and have access to free care and/or care with varying deductibles and co-pays based on care/medicines for service and nonservice-connected conditions. Start here: https://www.va.gov/healthbenefits/cost/copays.asp