It’s not unusual for people who are newly eligible for Medicare to have other coverage options. Although employer-sponsored insurance is the more common scenario, plenty of folks also qualify for VA benefits. But, do veterans really need Medicare if they already get VA benefits?
Should You Enroll in Medicare If You Have VA Benefits?
In a word: Yes. Even the Department of Veterans Affairs encourages beneficiaries to enroll in Medicare as soon as they’re eligible.
The reasons are numerous. They include:
- VA funding can change at any time. Depending on your priority level, you may lose your VA benefits. Then you’d be left without health coverage.
- Having VA benefits does not qualify you for a Special Enrollment Period (SEP). That means that, if you wait to enroll in Medicare Part B, you may pay late fees for the rest of your life.
- The VA often does not cover emergency medical care received in a civilian medical facility. Without Medicare Part A, this could leave you footing 100 percent of the bill.
- You have more coverage options when you have both VA and Medicare, since VA limits you to VA medical centers and healthcare facilities.
Of course, if you are a veteran with TRICARE For Life, you must have Original Medicare (Parts A and B).
How Does it Work if You Have Both Medicare and VA?
If you have both VA and Medicare benefits, the way it works is fairly simple. To use your VA benefits, choose a VA facility for your healthcare. To take advantage of your Medicare coverage, use a Medicare-approved provider who accepts assignment. If you have a Medicare Advantage (MA) plan, the provider must also accept your plan.
Unfortunately, you cannot use your VA benefits to pay your out-of-pocket Medicare costs, such as deductibles and co-insurance. In addition, Medicare will not pay for services received in a VA facility. These two systems do not coordinate coverage.
If you choose Original Medicare, you may want to add a Medicare supplement plan (aka Medigap). Cost sharing for Parts A and B includes deductibles and co-insurance. Out-of-pocket costs under Part A in particular can be quite high. An extended hospital stay could leave you owing tens of thousands of dollars. Your Medigap plan helps pay some of these costs.
Veterans may also choose a Medicare Advantage plan instead of Original Medicare. MA plans provide the same benefits as Original Medicare (although you may pay an additional monthly premium). However, out-of-pocket costs for hospital stays are usually lower. In addition, MA plans have a maximum out-of-pocket (MOOP) limit, which is $6,700 in 2019. Original Medicare has no limit on out-of-pocket costs.
Do You Need a Medicare Part D Plan if You Have VA?
Most veterans choose their VA prescription benefits, because the out-of-pocket costs are lower. In addition, although having VA benefits does not qualify you for an SEP, Medicare considers the VA’s prescription coverage “creditable.” This means veterans don’t face late penalties if they decide to add a Part D plan later.
You may decide to sign up for Part D anyway, especially if the VA formulary (list of covered prescription drugs) doesn’t cover any of your prescriptions. Some veterans also qualify for Extra Help, a Medicare program that typically has lower co-payments than under VA.
However, if you do not sign up for Part D when you first become eligible, you have to wait for Annual Enrollment, which occurs from October 15 through December 7. In addition, if you have an MA plan and choose to switch back to Original Medicare during Open Enrollment (January 1 through March 31), you can sign up for a Part D plan.
Tips for Managing Medicare and VA Benefits
The following tips should help you manage your care if you have both Medicare and VA benefits:
- Let the VA know about your Medicare coverage, including any plan numbers (if applicable).
- Tell your VA providers about your Medicare providers and vice versa. This helps ensure you receive coordinated care.
- Compare the costs between Original Medicare plus a Medigap plan and Medicare Advantage.
Finally, look carefully at your care options before you choose VA only. Some areas are extremely limited when it comes to VA providers.
When Should Veterans Enroll in Medicare?
Like everyone who qualifies for Medicare, veterans should enroll during their Initial Enrollment Period (IEP). Your IEP begins three months before your 65th birthday and ends three months following your birth month, for a total of seven months. When you enroll during your IEP, you ensure you face no late penalties or gaps in coverage. This is also the best time to enroll in a Medigap plan, since it’s the only time you don’t have to undergo medical underwriting. That means the insurer cannot refuse to sell you a Medicare supplement plan or charge you more.
If you need help understanding your Medicare options, the licensed agents at Medicare Solutions can help. Just call us toll-free at 855-350-8101 to get started or browse plans here.