Plan Advisors Blog

How VA Coverage and Medicare Can Work Together

Posted by Lance Hoeltke on Fri, May 15, 2020 @ 10:17 PM

You may have heard that VA benefits and Medicare don’t work together. While that’s technically true, it doesn’t mean your clients should skip enrolling in Medicare when they become eligible. So why do so many veterans go without enrolling in Medicare? Oftentimes, they don’t know that the VA actually recommends veterans enroll in Medicare to fill in coverage gaps. 

As a trusted Medicare broker, it’s your job to educate your client on how Medicare can fill in gaps left by VA coverage alone. Here’s what you need to know. 

How does VA coverage work?

After applying for VA benefits the VA will assign veterans to one of eight priority groups based on a combination of:

  • Military service history
  • Disability rating
  • Income level
  • Medicaid eligibility
  • Any other benefits they may be receiving

Veterans will always be placed in the highest priority group they qualify for. 

The biggest difference between each priority group is how much, if anything, veterans will be required to pay toward the cost of their care. This will vary between urgent care, outpatient care, inpatient care, prescription medications, and geriatric care, but there are some coverage gaps and risks all priority groups have the potential to face. 

Why does the VA recommend Medicare Coverage for Veterans?

The VA recommends Veterans enroll in Medicare when they first become eligible. However, many veterans aren't aware of this, so it’s important for you to understand how your clients can benefit from Medicare coverage and make sure they don’t miss their opportunity to enroll. 

VA Coverage is Variable

The VA is a federal government agency, meaning its funding must be approved by Congress. If Congress chooses to decrease VA funding, or not increase the funding at a comparable rate to the healthcare market, veterans may experience significant gaps in coverage, or even lose their coverage entirely. While this would affect the lowest priority groups the most initially, there’s no limit on how many groups could potentially be affected. Having Medicare, in addition to VA coverage, will ensure your client won’t be left without adequate health coverage. 

VA Coverage is Limited

In most cases, veterans are required to go to a VA hospital or doctor for services to be covered by VA benefits. The passing of the VA Mission Act made it possible for veterans to get coverage outside of the VA network, but certain requirements must be met. Veterans qualify for covered care outside of the VA network if one of the following criteria are met.

  • Veteran needs a service not available at a VA medical facility 
  • Veteran lives in a U.S. state or territory without a full-service VA medical facility
  • Veteran qualifies under the “Grandfather” provision related to distance eligibility for VCP
  • VA cannot provide care within certain designated access standards
  • It is in the Veteran’s best medical interest
  • A VA Service Line Does Not Meet Certain Quality Standards

For services obtained outside of the VA network that don’t meet one of these eligibility requirements, veterans will have to pay the full cost out-of-pocket.

Having Medicare gives your client more options, which can be especially important if they don’t live close to a VA facility or have a condition that they may prefer to see a non-VA specialist for. 

Avoid Penalties

Delaying Medicare Part B enrollment, which covers doctor visits and outpatient services, can be financially risky for your client. If your client decides to enroll in Medicare Part B after the Initial Enrollment Period (IEP) because they no longer have VA coverage, or want more health care options, they will pay a penalty. This penalty increases each year Medicare Part B enrollment is delayed and it will have to be paid every year for the rest of your client’s life. 

Should veterans enroll in Medicare Part D?

VA benefits offer creditable drug coverage, meaning your clients will not incur a penalty for delaying Medicare Part D enrollment, giving them more time to consider the benefits.  

Under VA coverage priority group 1 is the only priority group who will not have medication copays. Priority groups 2 - 8 will be subject to copays ranging from $5 to $33 per prescription depending on the medication tier and supply. The VA does offer a copay cap which eliminates copays once the insured has paid $700 in copays for the calendar year. 

The catch is that the VA requires all prescriptions be prescribed by a VA doctor and filled through the VA mail-order system. Medicare Part D can supplement your clients' VA prescription drug coverage by allowing them to get medicine from non-VA physicians and fill them at local pharmacies. 

Don’t let your veteran clients be underserved. The lock-in period is a great time to check in with veterans who are nearing the Medicare-eligibility age. You can even pass along this VA Benefits and Medicare reference guide so they can think through the decision and make the choice that’s best for their needs. 

If you’d like more information, click here to find answers to FAQs for serving veterans with Medicare.

Tags: Veterans and Medicare