Plan Advisors Blog

What You Need To Know To Serve Clients Who Also Have TRICARE Coverage

Posted by Lance Hoeltke on Mon, Apr 27, 2020 @ 01:47 PM

TRICARE is a healthcare program for active-duty and retired uniformed services members and their families. When TRICARE members turn 65 or otherwise become Medicare-eligible, they have the opportunity to enroll in Medicare Parts A & B. It's important to help your clients understand the advantages of having both TRICARE and Medicare coverage.

The Basics of TRICARE & Medicare

Your client will likely be enrolled in Medicare Part A automatically when they become eligible, but it is important they confirm their coverage and also enroll in Part B as soon as they become eligible. Medicare Part B coverage is required to remain eligible for TRICARE once your client becomes entitled to Medicare Part A. Delaying Part B enrollment can result in lifelong penalties, unless your client is, or their sponsor is, an active duty service member, in which case they can delay enrollment penalty-free.

While there are different types of TRICARE, your client is only eligible for TRICARE for Life (TFL) once they have enrolled in Medicare Parts A and B. TFL is the only TRICARE coverage that provides Medicare wraparound benefits. Wraparound benefits are important because they fill in the coverage gaps and can significantly reduce your client’s out-of-pocket healthcare expenses.

What’s even better is that TFL enrollment is automatic, is available regardless of age, and can be used at a wide variety of locations, including overseas. There are also no limitations on the providers you see. However, your client will pay a little more if they get care from VA providers or other providers who have opted-out of Medicare and are unable to bill Medicare for their services. 

How Does Coverage Work When You Have Both TRICARE & Medicare?

The process is simple. Once your client enrolls in Medicare, healthcare claims will be sent to Medicare for payment first. After Medicare covers their portion for Medicare-covered services, the remaining cost will be sent to TFL. As long as the services are covered under TFL, TFL will pay the remaining Medicare deductible, meaning your client will have no out of pocket cost.

The vast majority of Medicare-covered benefits are TFL covered benefits as well. Here are a few examples of what your client could expect for services only covered by Medicare or only covered by TFL.

  • In situations where Medicare coverage is not applicable, like overseas care, TRICARE will become the primary payer and your client will be responsible for paying the TRICARE deductibles and cost-shares.
  • For services covered by Medicare but not TRICARE, like chiropractic care, Medicare will pay 80% and your client will be responsible for paying the remaining 20%.
  • Services that are typically considered to not be medically necessary, like cosmetic procedures, will not be covered by Medicare or TFL, meaning your client will be responsible for the entire bill out-of-pocket.

As for prescription medications, enrolling in Medicare Part D is not necessary if your client is receiving TFL benefits. TFL will provide your client with TRICARE prescription drug coverage using standard TRICARE tiered drug pricing. 

TRICARE and Medicare working together should be a relief, not a headache for your clients. Helping them understand how TRICARE and Medicare work together will ensure they don't miss out on wraparound coverage that will benefit them in the long run.