Medicare coverage, which is added when you turn 65 or in the 25th month of receiving Social Security Disability Insurance (SSDI), can make a significant difference in your retirement expenditure. And you’ll be able to access any provider that accepts Medicare with Tricare for Life.
Regular Tricare offers a variety of coverage alternatives that you can choose from depending on whether you’re a military retiree or on active duty. Some Tricare options, akin to a health maintenance organization (HMO) or your preferred provider organization, have agreements with hospitals and medical professionals that provide you care at a lower cost than out-of-network providers (PPO). Tricare can be your primary insurance after you leave the military, or you can use it to supplement coverage from another workplace until you are 65.
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Tricare coverage automatically transitions to Tricare for Life when military retirees sign up for Medicare Parts A and B. You can receive Tricare for Life without submitting additional papers, but you must enroll in both Medicare parts.
Those in small groups must adhere to different rules:
• Regular Tricare will keep covering you until you leave the military if you are still on active service at 65. Your Tricare will end on the first of the month if you don’t enroll in Medicare Part A and Part B after retiring. After that, you’ll switch to Tricare for Life.
• You don’t qualify for premium-free Part A and must take action to remain in Tricare if neither you nor your spouse has paid at least 40 consecutive quarters of Medicare taxes. Very few people qualify for this exception since military members have had Medicare taxes taken from their salary since the program’s inception.
Couples may become eligible at various points. Think of your Tricare coverage as an individual policy, similar to what Medicare is, rather than a family plan as you and your spouse approach your 65th birthday.
After enrolling in Medicare Parts A and B, an older or younger spouse eligible for early Medicare because of a disability can get Tricare for Life benefits. A younger spouse under 65 will continue to be covered by Tricare.
You are covered by Tricare for Life from the first day that you have both Medicare Part A and Part B. Medicare Part B premiums must be paid; they will cost high incomes of at least $170.10 per month starting in 2022. Tricare for Life, however, does not charge a separate fee.
Your spouse does not need to sign up for Part B to continue receiving Tricare benefits if you are a serving military member and they are eligible for Medicare due to a disability. However, your spouse must sign up for Medicare before your active duty is over to prevent a break in coverage.
What if I’m a 65-year-old retired military person working somewhere else?
If you or your spouse are still employed at age 65 and have health insurance through that company, you are allowed to put off signing up for Medicare without incurring penalties. However, once you turn 65, you will lose access to Tricare, which you could have utilized to complement the benefits provided by your job. Your Tricare for Life coverage will not begin prior to enrolling in Medicare Parts A and B.
You can enroll in Medicare at any time during your employment or within eight months after quitting your job or private insurance.
How do Tricare and Medicare interact?
Primary versus secondary: Medicare is the major coverage, invoiced first when you have both Tricare for Life and Medicare. Tricare for Life is an afterthought.
The remainder of the claim is transferred to Tricare for Life after Medicare has paid its portion. Tricare for Life pays the remaining balance in full to the provider. You often don’t need Medigap coverage because Tricare for Life covers most of Medicare’s out-of-pocket expenses, including deductibles and copayments.
Not everything is covered: Tricare for Life won’t contribute to the cost if you utilize a medical treatment that Medicare covers but Tricare for Life does not, such as some chiropractic care. You would then be responsible for covering everything Medicare does not cover.
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Disclosure:
Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice has been filed, or is excluded from notice filing requirements. This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.
