Healthcare for Military Service Members: TRICARE

By Michelle Buonincontri

A new report by the nonpartisan Kaiser Family Foundation (KFF) found that by 2030 the average out-of-pocket healthcare costs will consume half of a recipient's average per capita Social Security income. And, according to the U.S. Department of Health and Human Services, the probability of a long-term care event is 70% for those age 65 and up - meaning, yes, higher healthcare costs.

The rising costs of healthcare in recent years have made these expenses a vital part of retirement planning, so understanding your options and maximizing them are key to stretching your retirement dollars.

Unfortunately, most of the service members I meet with do not understand the healthcare burden in retirement or the huge financial value that "healthcare for life" offers when retiring from the military. For older and younger members alike, this can be a tipping point when they are deciding whether to retire from the National Guard or stay and attain 20 years. Of course, there is a greater commitment for active-duty service members, but we spend time discussing the impact of that lost benefit and the increased need in retirement when healthcare is factored into the household budget. For the female service members or spouses, this is even more important due to a longer lifespan and consequently greater healthcare costs in retirement for women. I have to be honest, thankfully this conversation almost always results in more realistic retirement time horizons, increased savings goals and committed savings in the Thrift Savings Plan (TSP) for retirement (when it can be afforded).

TRICARE is the military's healthcare insurance benefits available to service members; active as well as retirees and their family members. These benefits change, come at a cost in retirement and have three parts: medical, dental, and vision and pharmacy. Some options in retirement are meant to work in conjunction with Medicare while others are meant to bridge the gap until service members are eligible for Medicare.

In this article I will include some TRICARE resources for retirees to help you understand the options available based on your age and retire status as well as some tips to avoid loss of coverage.

Continuing Healthcare Benefits in Retirement

Retirement can be a time of many changes; including a new career or a move. Since service members may retire after 20 years of service, many will be under age 60, will be retiring into a second career and have children that are eligible for coverage. These members are known as the "working retired" and have access to TRICARE and other private and employer options where TRICARE can be a great savings.

In order to continue healthcare coverage, you must re-enroll before retirement or within 90 days of retirement, so as to not inadvertently cause a break in coverage -- where members will only be able to receive care at a military clinic or a hospital on a space-available basis until coverage begins again.

At retirement, your TRICARE status changes, so you will need to get a new uniformed services ID card at your local Defense Enrollment Eligibility System (DEERS) office.

Dependent children that may have lost TRICARE due to age may qualify up to age 26 under TRICARE Young Adult.

If eligible for TRICARE under age 65 for a disability or another reason, you must have Medicare Part B in order to keep TRICARE benefits (there are exceptions).

If you move in retirement, ensure DEERS has your most updated address information to ensure TRICARE eligibility & coverage.

Are you retired from the military, still working and want TRICARE for Life at age 65? Remember to sign-up for Medicare 3 months before age 65 (Part A & B) to get these coverages at age 65.

Verify TRICARE eligibility, by logging into the DMDC Beneficiary Web Enrollment before making healthcare choices -- even at your employer, and compare updated price structures.

Military Healthcare Benefits

Depending on your military status at retirement and your age various options are available. Check out coverage and compare at this TRICARE plan site.

Plan Name

Who is covered

Potential Costs

Other

Tri-Care Prime

Active Retirees & families under age 65

Retired National Guard or Reservists & families - 60-64

Annual enrollment fee (unless you have Medicare Part B) & copays for treatment

In Prime service Areas only

TRICARE Select

Active Retirees & families under age 65

Retired National Guard or Reservists & families - 60-64

Annual Enrollment for Group B

Higher co-pays and cost shares/deductibles

 

US Family Health Plan (UFHP)

Active Retirees & families under age 65

Annual enrollment fee and copays for treatment

Available in specific US locations

TRICARE Retired Reserve (TRR)

Retired National Guard or Reservists & families - until Age 60

Yes -Enrollment fee, cost-shares/ copays for treatment, and yearly deductibles

Bridge to Medicare

TRICARE for Young Adult (TYA)

Dependent children that may have lost TRICARE due to age may qualify up to age 26

Premium-based. Children enrolled at sponsor's retirement may need to reapply

 

TRICARE For Life (TFL)

For anyone who is entitled to Medicare Part A and enrolls in Part B and pays the premiums

No enrollment forms or fees

Automatic enrollment when you are enrolled in Medicare Part A and B

In the U.S. this is a Medicare supplement or wrap-around plan.

Outside the U.S. or its territories TRICARE For Life is your primary health care provider

Medicare

Anyone >= 65 years old

People with disabilities < age 65

Those with end-stage Renal Disease

   

TRICARE Overseas Program Select (TOP)

Retires and families members living and traveling overseas

cost-shares/ copays for treatment and Yearly deductibles

Retired Guard/Reserve at age 60

TRICARE Plus

Those who usually get military hospital or clinic care on a "space available" basis

You can enroll in TRICARE Plus if you're eligible for TRICARE and NOT enrolled in a TRICARE Prime Plan, the US Family Health Plan or a civilian or Medicare HMO.

Sign up for primary care access standards as TRICARE Prime

Disadvantage: will not qualify for minimum coverage in 2018 under the Affordable Care Act

Pharmacy benefits: See TRICARE Pharmacy Program Handbook

Pl an Name

Who is covered

Restrictions

Other

TRICARE Pharmacy Program

Those eligible

 

Prescription

TRICARE Maintenance Medication Program

Those eligible and taking select maintenance medications

Cannot use retail pharmacies

Refills received via TRICARE Pharmacy Home Delivery

Military Pharmacies

Those eligible

 

Charge nothing for a 90-day supply of most drugs

Dental benefits (TRDP): See Dental Benefits.

Plan Name

Who is covered

Potential Costs

Other

TRICARE Retiree Dental Programs

*Those eligible

See website

Available in US and all overseas areas

Vision benefits

 

Who

Cost

Deductible

Other

TRICARE Vision

Retires & families

Yes - annual enrollment fee and copays for treatment

Not Covered:

TRICARE Select

TRICARE Select Overseas

TRICARE Young Adult - Select

TRICARE for Life

Depends on TRICARE Plan

For prescriptions, consider have them filled at a military pharmacy or as a 90-day supply for little or no cost for most drugs.

In order to keep TRICARE Retiree Dental Program & TRICARE Vision coverage enrollees will need to enroll in Federal Employee Dental and Vision Insurance Program (FEDVIP) during the 2018 Open enrollment season as these current plans are going away. More information can be found by visiting this BeneFeds site.

TRICARE Plus does not meet the minimum essential coverage requirement under the Affordable Care Act for 2018, so be aware that a penalty may be due on your 2018 tax return. However, the other plans do and starting 2019 the penalty for not having health insurance will be eliminated.

There have been recent changes to TRICARE that affect retirees; including how they enroll in coverage and what they pay out of pocket. Although current retirees continue to pay an enrollment fee for Tricare Prime only, in general, "future force" retirees will face annual enrollment fees for all plans and there are more increases that may take effect Jan. 1, 2019 if the current bill in the Senate is approved. This Military.com article outlines the changes. Also see link for 2018 cost changes.

Ask if any amounts accrued while in active duty during the calendar year you retire can be applied to your retired family cap (as this was previously allowed).

Medically Retired Service Members

As long as service members are on the Temporary Disabled Retirement List (TDRL) or Permanent Disability Retirement List (PDRL), they are eligible for TRICARE benefits for retired service members.

Survivor Healthcare Benefits

Whether benefits continue for surviving family members after the death of a retired sponsor spouse depends on a few things including if they retired from active duty or National Guard or Reserves.

This is not meant to be fully comprehensive but an overview for retirees as a starting resource.

About the author: Michelle Buonincontri, is a Certified Financial Planner, Certified Divorce Financial Analyst, collaboratively trained financial neutral, mediator and founder of Being Mindful in Divorce. With over 25 years in financial services, a focus in investments, retirement, tax and divorce planning, Michelle works as a financial coach with Clearview Financial Strategies Inc., a blogger at Being Mindful in Divorce, is a leader in the nationally acclaimed "Second Saturday" program for divorcing individuals, a presenter at Fresh Start Women's Foundation in Phoenix, a volunteer Financial Coach for Savvy Ladies, a contributing writer to Investopedia and previous Board of Director member for the Financial Planning Association (FPA) serving in both in Arizona and New York.