Tricare for Life – Is It Really Free?
Military retirees, including reserve retirees over age 60, are familiar with the retiree Tricare drill. And when you hear “Tricare for Life” you may assume Tricare as you know it continues to death, but free.
Yes, and No
When you reach age 65, whatever Tricare plan you were on ends. You will be automatically moved to Tricare for Life. You will not pay any more Tricare annual fees.
But… In order to be covered under Tricare for Life, you must enroll in Medicare Part A and Medicare Part B. Part A (Hospital Insurance) coverage is free. Part B (Medical Insurance) is not. You will have to pay Part B premiums to Medicare.
Your Medicare Part B premium is based on your annual income. For 2024, the standard Part B premium is $174.70 a month ($2,096.40 a year) per person. If your annual income is more than $103,000 (single) or $206,000 married filing jointly) you pay even more.
Sounds Bad
By comparison Medicare premiums are much higher than the Tricare Prime Retired premiums ($363/year, individual). Though much lower than Tricare Retired Reserve ($7,023 a year, individual).
How Can This Be a Good Deal?
It’s unfair to only compare annual premiums. Your coverage will be more complete than Tricare alone because because Medicare covers some things Tricare doesn’t and visa versa.
Tricare for Life and Medicare together provide “wrap around coverage” through coordination of benefits (COB) rules. Medicare as the primary payer will pay it’s share of your medical bills first, and then Tricare will pay it’s share after that.
For example, the catastrophic cap (total maximum co-pays and cost share per year) you could have to pay with other retiree (under age 65) Tricare plans is $3,000 to $4,399 a year.
Under Tricare for Life, you pay those Medicare Part B premiums and that’s it. Usually there’s no additional costs. It’s very predictable.
If you receive care that is only covered by Medicare (like chiropractic) or only covered by Tricare (such as overseas care), you will be on the hook for some co-pays/cost share.
And you would need to pay entirely for a few things not covered by either Medicare or Tricare. Dental work and long term care are two examples.
Overall, Tricare for Life is really pretty amazing coverage. Just for reference, “regular civilians” 65 and older have a 20% cost share with Medicare Part B and no catastrophic cap (costs are unlimited). They also pay additional, much higher premiums and copays for drugs.
What if I use the Veterans Administration (VA)?
VA care can be a great option at any time. But if you are considering using only the VA system to avoid Tricare for Life and paying for Medicare Part B, proceed with extreme caution.
A VA facility may not be available near you if you move or facilities close. VA healthcare is only available in the United States, so you wouldn’t be covered if you travel or move to another country. You are assigned to a priority group for VA care based on your service and disability. If you are in a lower priority group, you may be treated only on a space available basis, and you may have co-pays. And keep reading about penalties if you delay signing up for Medicare Part B.
Note: Also be careful when using Tricare for Life and Veterans Affairs health providers for non-service related care. Because VA providers are not allowed to bill Medicare, you can’t be reimbursed through Tricare for Life for any co-pay a VA provider charges. You’d have to pay for any VA expenses out of pocket. For most retired military these costs are likely low. Just know before you go.
What about my family?
Eligible family members stay on Tricare Standard or Prime until age 65 when they must sign up for Medicare Part A and B themselves and switch to Tricare for Life. So a service member and family members may be in different Tricare plans at the same time.
Don’t Delay Signing Up for Medicare Part B
The Medicare enrollment period starts 3 months before to your 65th birthday through 3 months after. So start when you are 64 years and 9 months old to be sure you don’t have a gap in coverage.
If you’re late, enrollment penalties are added to your monthly premium. The longer you wait to sign up, the higher the penalty. You’ll pay an extra 10% for each year you could have signed up for Part B, but didn’t. This is NOT just a one-time penalty. So if you wait 2 years to sign up, you will pay 20% higher Medicare premiums for the rest of you life!
You can delay enrolling in Part B if you or your spouse are working and covered by a workplace group health plan with 20 or more employees. In that case, you would need to enroll in Medicare Part B within 8 months of stopping work or losing your workplace health coverage, which ever is sooner in order to avoid penalty.
What About the Rest of the Alphabet?
With Tricare for Life you do not need (and don’t pay for) a Medicare Advantage Plan (Part C) or a Drug Plan (Part D). Tricare for Life has you covered.
Where Can I Get More Details?
Download your Tricare for Life brochure here: https://tricare.mil/Publications/Handbooks/tricare_for_life