In this conversation, Amy and Mike discuss the complexities of healthcare options available to military retirees. They explore various TRICARE plans, including TRICARE for Life and TRICARE Reserve Retiree, and how these options change as service members transition into retirement. The discussion also covers the importance of understanding VA healthcare and the implications of Medicare on healthcare costs. The hosts emphasize the need for careful planning and consideration of personal circumstances when choosing healthcare options in retirement.

Takeaways

• Healthcare options for retirees can be confusing
• TRICARE offers multiple plans for retirees
• TRICARE Reserve Retiree is available before age 60
• TRICARE for Life requires enrollment in Medicare
• Medicare Part B premiums vary based on income
• VA healthcare is available for veterans but cost is based on disability percentages
• Access to care is a key consideration for retirees
• Tax planning can impact healthcare costs in retirement
• Understanding healthcare options is crucial before retirement

Chapters

00:00 Navigating Healthcare Options for Retirees

15:19 Understanding TRICARE for Life and VA Healthcare

18:44 Key Considerations for Healthcare Choices in Retirement

Links

Schedule a consultation with Amy

Schedule a consultation with Mike

TRANSCRIPT

Amy (00:00)

Hey Mike, last time we talked about healthcare when you’re on active duty or a drilling reservist. This time we’re gonna talk about your healthcare options for retirees or when you’re done being an active reservist. It’s confusing, so let’s try to get into the details and make it less confusing for our retirees.

Mike Hunsberger (00:22)

Yeah, there are definitely a lot of choices to be made, especially coming out of the military where it’s like, OK, Tricare Prime and most often seen in a military treatment facility. Now you’ve got this, I’d say, smorgasbord of options. And so what’s right for you? So I’m looking forward to diving into that.

Amy (01:17)

Okay, so again, last show we covered TRICARE options while you’re still serving. So by way of review, let’s just do a quick overview of what we already talked about, and then we’ll jump into TRICARE after retirement, which is things like regular TRICARE after retirement, TRICARE Reserve Retiree, TRICARE for Life, and then we’ll throw VA care in here as well. But first, Mike, how about a quick overview of our last show?

Mike Hunsberger (01:46)

Sure. Two primary options when you’re on active duty. For military members, as I said, always going to be TRICARE Prime. Family has options while you’re serving. And families can choose between TRICARE Prime or TRICARE Select. And TRICARE Prime, a health maintenance organization, HMO-like, where you have a PCM and they coordinate your care.

Tricare Select is the preferred provider option where you have a network. You can go to those, but typically you’re going to pay more on the Tricare Select side than you would with the Tricare Prime.

Amy (02:32)

Exactly. We also covered TRICARE Reserve Select for reservists. And we also covered costs of all of these plans in the last show. In the interest of time, I’ll just point you to the last show and or the TRICARE website to go over the 2025 cost for those plans. But for now, let’s go ahead and jump into how things change when you retire.

Mike Hunsberger (02:56)

Sure. So as it turns out, it’s relatively similar. know, the military member has increased options now. Instead of just being tied to Tricare Prime, you can now also choose Tricare Select for you and your family. So, are slightly different, but overall, as Amy said, you know, if you want a full treatment of the difference between Prime and Select, you know, go back and listen to it.

our previous episode where we walked through that. But again, the biggest difference now is how much you’re going to pay as being retired.

Amy (03:37)

Exactly. there’s, there’s like a, annual enrollment fee. They still call it an annual enrollment fee, but you’re going to pay monthly. Still inexpensive members. So when you retire, you’ve got 30 days to enroll in either TriCare Prime or TriCare Reserve Select. Again, you know, not to get too far into the details as far as TriCare Prime, there are different flavors of TriCare Prime. So it’s just like,

in our last show where we talked about their tri-care prime. And then there’s US family health plan. So that’s basically the tri-care option where there’s a private contractor administering the plan. For example, PAC Med Out West or Hopkins here in the mid Atlantic area.

Mike Hunsberger (04:23)

Yeah, again, we talked a little bit about and we’ll get in more into is reserve retirees, they’re in that gray zone, have lose access to Tricare Reserve Select when they retire, but they do have access to Tricare Reserve Retiree again, before they turn 60. And that is an option.

Amy, you want to kick us off with talking about that?

 

Amy (04:54)

Yeah, so when a reservist retires, so you’re leaving, you’re not drilling anymore, you’re no longer eligible for Tricare Reserve Select, which is actually a pretty affordable option. Instead, and also, you’re not yet eligible for Tricare. So as a reservist, you will be eligible for Tricare, but not until you’re age 60. So no matter when your pension begins, you’re still not eligible for Tricare.

 

regular TRICARE for, you know, that’s just like an active duty retiree until age 60. So in between, in that gap, in that grew zone area, there is the option of TRICARE reserve retiree. We’ve talked about it already. It’s a little bit more expensive. It’s like, it’s more like TRICARE young adult. We went through that before.

 

Mike, you know, not to dwell on costs and things like that, but do you want to give us an example of about how much it costs for Tricare Reserve retiree?

 

Mike Hunsberger (05:55)

Yeah. So for reserve retiree, just to cover the member, it’s $631 per month. If you’re doing the family, it’s over $1,500 per month. And then you’re still going to have deductibles and out of pocket or out of network costs. we talked about catastrophic caps last time.

 

and that’s also significantly higher. It’s about $4,500 per year for your catastrophic cap. again, more expensive than what you’re going to pay for, you know, than you were under Tricare Reserve Select while you were serving. But it is still an option if you don’t have other good options for health care through an employer or somebody else.

 

that is there to cover you.

 

Amy (06:57)

Yeah. And you, know, again, it’s to cover the gap because when you turn 60, you’re then eligible for sort of regular TRICARE. So TRICARE just like active duty folks. But let’s go ahead and switch gears and start talking about TRICARE for life, which I’m not sure people understand really what that is. So TRICARE for life is…

 

is what happens when you turn 65 and it is by individual. So not by, you know, service member age or spouse age. It is by individual. So when the TRICARE beneficiary reaches Medicare age, which is age 65, they are required to enroll in parts A and part B of Medicare. Medicare part A is usually free. It’s been paid for through payroll contributions through the years. Medicare part B has a monthly premium.

 

and it depends on your income. So you’re modified adjusted gross income. Right now, the lowest cost premium is about $185 per month. The highest premium can be upwards of four or $500 per month per person. Again, these are per month per person numbers. We didn’t give you the number for the annual enrollment fee for say, TRICARE Prime. So…

 

If you’re retired and you’re on Tricare Prime, your annual enrollment fee is roughly 60 bucks a month. So when you go to Tricare for life, you’re going to jump from 60 bucks a month for both you and your spouse or your whole family to 185 per month per person. So it is more expensive. You don’t pay the Tricare fee though. So that’s good news. Small favors there, right Mike?

 

Mike Hunsberger (08:43)

Yeah.

 

Amy (08:44)

You want to fill us in on a little bit more about how TRICARE works with Medicare?

 

Mike Hunsberger (08:50)

Sure. You know, the other piece, there is a drug piece of Medicare called Part D that, you know, most people usually subscribe to to get, you know, parts of their medical or their prescriptions covered. And when you are on TRICARE for Life, you’re covered. You don’t have to pay that additional piece. So that’s some other savings that you’re going to have, which is good news. And, you know,

 

It basically once you get on Medicare, Tricare kind of becomes the second payer and they cover a lot of those additional costs. You know, some of the, you know, copay stuff and things that, you know, would be present under Medicare will now just go to Tricare. So that’s really how how they work together. It’s kind of the backup and.

 

When you look at the charts, of your costs are going to be covered. You’re not going to have a lot of out of pocket other than that Part B fee that everybody pays based on income. Anything to add on that, Amy?

 

Amy (10:00)

Exactly.

 

No, I mean, I agree, know, out of pocket costs go way down. So it’s, it’s more expensive per month for a premium, but it’s more predictable because you’re out of pocket cost and the catastrophic cap is still in place. So even if you were to encounter a situation where, you know, Medicare didn’t cover a lot, Tricare didn’t pick up much of it, you know, and the one example that I think of most often, often is, you

 

Medicare and Tricare will pay for hearing aids, but they’re not going to pay for the best hearing aids. So if you want a higher quality hearing aid, you’re going to pay out of pocket for something like that. Let’s change gears. Mike, I know that you use the VA for your health care. Let’s talk about how VA health care works for folks.

 

Mike Hunsberger (10:50)

So, VA, you know, everybody is eligible for VA, you know, if they’ve served more than 24 months. You know, the question is, are you going to have to additionally pay for that? So VA has got, I think it’s up to nine different groups that you need to go through and look at. But basically, if you’ve got more than a 50 % VA disability rating,

 

you’re in group one and can get seen at the VA. like you said, I came out of retirement, you know, the VA was very good, called me all the time and like, hey, let’s get you going. Let’s get you in. So I went, I got a great doctor that I really like. And so I was like, I guess I’m just.

 

going to do this for right now. So while I’m still covered by TRICARE because my family is, I really have not even gone to see my PCM at this point on the TRICARE side. again, VA, you hear people complain about it. if you’re not near a VA treatment facility, like you said, you weren’t, Amy, it’s not convenient. That could be a…

 

probably the downside of VA, but mine’s not that far away. So I do that. And I was telling you earlier that, you know, they said, Hey, think you ought to go see a dermatologist. So I was, I left the appointment and I wasn’t even home yet. They were calling me on the phone trying to set up my appointment for the VA or for the dermatologist. And I got seen within the next week.

 

Whereas my daughter had a similar thing where her PCM was referring her to a dermatologist locally and it was two months till she could get in to see the dermatologist. So you hear a lot of people, you know, bashing the VA and there definitely had been problems and, you know, not trying to make light of that. But I definitely have, you know, had phenomenal care with the VA. They want to see me every six months, which

 

was unheard of in the military, maybe once a year, or a lot of times it stretched once every 15 months type of thing. again, I can’t say enough for my treatment at the VA. anything we missed on that?

 

Amy (13:30)

Yeah, I’ll just add, mean, that, you know, if you’re, if you’re a Guard or Reserve veteran, it is a little bit different. So the 24 months is if you’re an active duty veteran for Guard or Reserve, you had to have been called to active duty under a federal order at some point, and you had to have completed that entire period of duty that you were called for. At this point, there are lots and lots of people who meet that, that requirement. So it just depends on, you know, when you served and things like that.

 

I’ll also just add that, know, Mike alluded to the fact that there’s different priority groups. If you are in one of the lower priority groups, like seven or eight, then you can have co-pays. Other groups might not, not all of them, you know, not priority groups one or two. I can’t remember where they are, but you know, just depending on the group might depend on some out of pocket costs. But I’ve heard many stories just like Mike has pointed out that the VA is doing a great job taking care of veterans.

 

Maybe not 100 % across the board because we do hear the not great stories, but I’ve definitely heard more good than bad. Okay, so yeah.

 

Mike Hunsberger (14:38)

Maybe I’ll add one more

 

thing on that, you know, along with the copays, some of that is tied to income. they will, you know, depending on which group it’s you’ll have copays and some of those are based on how much how much income you have. So if you’re a retiree working a second job and, know, are in one of those lower groups again, try care, you know, maybe and probably.

 

is a better option type thing. But again, you do have those options. So I definitely encourage you to check out both and just see what works better for you.

 

Amy (15:19)

Yeah. So like we wrapped up last time talking about key considerations and in your decision, let’s talk about how to make your choices as you head into retirement, either as a reservist or active duty service member.

 

Mike Hunsberger (15:36)

Yeah, you know, they’re similar. Access to care is probably, between that money should be the biggest things. But looking at where you live, know, retirees can still get seen at some military treatment facilities. So if you’re very close to base, you retired, you know, out of a large facility that still does that, you know, you may be able to keep

 

going to the MTF for care. Like you said, Amy, VA isn’t convenient for you. So the TRICARE plan works best. So again, really evaluating your access to care, what you need, how often you need it is probably one of the big considerations.

 

Amy (16:27)

Yeah. And you know, there’s an extra, an extra layer of consideration and doesn’t really have to do so much with your healthcare choice. Cause tri care for life is not a choice. it has to do with, you know, looking ahead and doing some tax planning to help yourself. So like, like we mentioned before, there’s part B premiums are tied to your income. And I, you know, we’ve talked about this in other episodes where, know, when you’re a military retiree, you’ve got the pension. Sometimes it’s a substantial pension.

 

You may or may not have another pension if you, you know, depending on the employer that you work for. If you’ve done a lot of pre-tax savings, then when you get into your 70s, you’re going to end up with those required minimum distributions. So that is an additional, that’s an additional income plus social security. So a lot of times service members can end up in the highest tax brackets they’ve ever been in in their 70s, which means that your medical costs are going to go higher.

 

So when you’re thinking about preparing for retirement, this is where tax planning becomes so critical and it’s linked to not just wanting to pay less in taxes over your lifetime, it can also impact the amount of money that you’re gonna pay for healthcare over your lifetime. Mike, did I miss anything there?

 

Mike Hunsberger (17:43)

No, I think that was definitely a good point to hit on that. But yeah, that’s, think, covered pretty much everything on the retiree side. Again, a lot more choices as you retire as the military member. You know, more with Morgan’s board to pick from. So really understanding that.

 

You know, didn’t really, again, look into it much until I retired and really trying to figure out what’s what really is best. So I encourage you to do it, you know, even before, you know, as you approach retirement versus wait until that 30 days when you got to make that selection type thing. So I just, you know, take your time and understand this. It’s important.

Amy (18:44)

Yeah, for sure. there’s people out there, you we’ve retired, your peers have retired, talk to them about their experiences, not what they think they know, but what they actually experienced. Cause I’ll be honest, I didn’t find the choice all that difficult in terms of what plan I wanted, but I did have a situation where I needed medical care and I had no idea how.

civilian healthcare worked on the outside. So, you when you’re in the military, you just go to the MTF and they just tell you where to go. But it works a little bit differently on the outside, even if you’re Tricare Prime. So use your peers. Let us know if you have questions. Other than that, we’ll see you next time.