At age 65 Americans are eligible for Medicare and most must enroll Medicare Part B or face a stiff premium penalty. 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. The penalty is 10% increase in premiums for every 12 months you delay, for the rest of you life.
If you are a federal employee you can carry your Federal Employee Health Benefit (FEHB) into retirement and are not required to sign up for Medicare. You can keep FEHB and sign up for Medicare for more complete coverage. There are pros and cons to to the different strategies. But it’s beyond today’s discussion.
f you are a military retiree and federal government employee you have the option of using FEHB or Tricare for Life when reach age 65. Listen to my Episode 5 for pros and cons if it applies to you. https://www.buzzsprout.com/934996/4770596
The main reason I’m focussing on military Tricare for Life is that it often catches retired military off guard. It’s like a Medicare/Tricare shotgun wedding. Also know as wrap around coverage. Key points:
- The Tricare plan you have now ends at 65, period.
- You are required to enroll in Medicare Parts A and B, if you want continued Tricare health insurance. (Which you should.
- Medicare Part A is free. Medicare Part B will cost you. The standard Part B premium is $148.50 a month. This fee is based on your annual income and is higher after certain tresholds. This is allot more than the Tricare Standard or Prime yearly fees You won’t have any yearly fees to pay to Tricare under Tricare for Life, but will pay premiums to Medicare for Part B.
- But it’s unfair to only compare annual fees and premiums. Tricare for Life is wrap around insurance. What that means is that Mediare and Tricare for Life work together to pay for your healthcare. Medicare pays first. What they don’t cover automatically gets passed to Tricare. Some things Medicare doesn’t cover, but Tricare for Life does. And visa versa. There are a few things neither Medicare or Tricare cover, but nearly every thing is paid for between the two with no copay or cost share. With Tricare for Life, there are no copays or cost shares that you have with regular Tricare.
- Also Tricare for Life covers you overseas. Medicare does not pay outside of the US and some territories. So if you will be living outside the US part or all of the time, Tricare for Life has you covered as the primary payer.
- 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.
- 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 care from a VA provider, you’d pay for any VA expenses out of pocket.
Great resources and details can be found on the Tricare and Medicare websites, as well as my Episode 5 podcast.
All about Tricare for Life: https://tricare.mil/tfl
Medicare basics and signing up:
https://www.medicare.gov/basics/get-started-with-medicare
Medicare Part B premiums:
https://www.medicare.gov/your-medicare-costs/part-b-costs
