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If you’re a member of the U.S. military, you probably have excellent health care coverage. The military’s TRICARE health care program gives active-duty members, retirees and their families the peace of mind of knowing that the lion’s share of their medical costs won’t come out of their own pocket.
However, not every TRICARE plan covers 100% of health care bills. If you’re worried about having to pay out-of-pocket costs, you might consider purchasing a TRICARE supplemental plan that will pick up the rest of the tab.
These plans can make sense for people whose out-of-pocket costs are likely to exceed the cost of what they pay for the supplemental plan, says Kate Horrell, an accredited financial counselor known as the “Military Finance Coach” who writes Military.com’s The Paycheck Chronicles blog.
“A TRICARE supplement can be a great option to reduce your overall health care costs, or spread them more predictably over time,” she says.
What is TRICARE supplemental insurance?
TRICARE supplemental health insurance policies help you pay for health care services. A supplemental insurance policy pays out after TRICARE — the U.S. health care system for military members and their families — takes care of its portion of your medical bills.
While TRICARE covers many medical expenses, some costs — such as copays, deductibles, enrollment fees and point-of-service fees — remain with the patient. TRICARE supplemental insurance plans reimburse the out-of-pocket costs you owe to civilian health care providers.
Military associations and private companies sell TRICARE supplemental insurance policies. It’s important to note that the insurance company policies aren’t affiliated with TRICARE itself, or the federal government in any way.
How does TRICARE supplemental insurance work?
When members of the military sign up for TRICARE, they can choose from a variety of plans. The plan they choose will help determine the types of out-of-pocket expenses the plan holder will be expected to pay.
Those who choose a TRICARE PRIME plan won’t face out-of-pocket expenses. But those who select other health plans tend to incur costs. Such costs are particularly likely if you have family members on your TRICARE plan.
You’re responsible for these costs only after TRICARE itself pays its portion of your medical bills. Your TRICARE supplemental health plan can help pay for these costs that are your responsibility.
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What does TRICARE supplemental cover?
A TRICARE supplemental health insurance plan can be a wise choice for anyone with out-of-pocket medical expenses. However, it’s especially beneficial if you have high out-of-pocket costs or regularly use medical services, particularly if you need help paying for a serious illness.
A TRICARE supplement isn’t a health insurance plan like TRICARE, Medicare, Medicaid or a plan you get from an employer.
Those types of supplemental plans are primary payers. They cover you to see a doctor, receive services from a hospital or as an outpatient, and get needed prescriptions.
A TRICARE supplement plan is a secondary payer that helps cover out-of-pocket costs like deductibles, copayments and coinsurance. You must have TRICARE to sign up for a TRICARE supplemental plan.
TRICARE supplemental coverage pays for:
- Up to 100% of copayments and coinsurance for TRICARE
- Up to 100% of outpatient deductibles
- Up to 100% of out-of-pocket costs for covered services
- Up to 100% of doctor visits, pharmacy, and hospital copays
On the other hand, TRICARE supplemental insurance doesn’t cover:
- Health care services not covered by TRICARE
- Health care services rendered before enrolling in TRICARE and a TRICARE supplemental plan
- TRICARE Prime enrollment fees
Whether a TRICARE supplemental plan makes sense for you depends on your situation and how much you and your family spend on out-of-pocket health care costs.
“In general, you’re trading an additional fixed monthly premium for additional coverage that you may or may not use,” Horrell says.
So, before purchasing a plan, figure out how much you’re spending on out-of-pocket health care costs and whether saving money on those costs will offset a supplemental plan’s premiums.
Questions to ask when choosing a TRICARE supplemental plan
There are multiple TRICARE supplemental plans, so make sure the plan you select is right for you. When deciding on a plan, the Department of Defense’s TRICARE site suggests asking yourself several questions, including:
- Are there different premium rates based on military status or age?
- Can the plan increase premiums? Under what conditions?
- Is there a deductible to pay before the supplement pays?
- Is there a maximum limit on benefits (lifetime, annual, etc.)?
- Is there a pre-existing condition clause? If so, how long is the waiting period?
“Every TRICARE supplement is slightly different, so the pros and cons are different,” Horrell says.
Who is eligible for TRICARE supplemental insurance?
Active-duty members of the military, retired military under the age of 65 and their families typically are eligible for TRICARE supplemental health insurance coverage.
You must have TRICARE coverage to purchase a supplemental plan. Those eligible for TRICARE include:
- Uniformed service members, including active duty and retired members of the military.
- Spouses and eligible children of uniformed service members.
- Retired military members and their spouses and eligible children.
- Former spouses, who have not remarried, and eligible unmarried children of active duty or retired service members who have died.
- Spouses and unmarried children of reservists and National Guard, who are on active duty for more than 30 consecutive days or have died on active duty.
- Medal of Honor recipients and their families.
How to get TRICARE supplemental insurance?
Multiple military associations and private companies offer TRICARE Supplement, including USBA, Military Benefit Association, Armed Forces Benefit Association and the Veterans of Foreign Wars.
You can still get TRICARE supplemental insurance after you leave the military and have another career. Some employers offer TRICARE supplemental coverage to their retired and active-duty military personnel.
How much does TRICARE supplemental insurance cost?
The actual costs of a TRICARE health insurance supplemental plan vary depending on the plan, your age, the deductible and the number of beneficiaries. You could pay less than $200 annually if you’re under 50 and choose a high deductible. Or, you might pay more than $600 if you’re between 55 and 65 and pick a low-deductible option. Adding children to your plan also adds to the cost of premiums.
When deciding on a plan, understand the plan’s out-of-pocket caps and benefits. For instance, if the annual cap is $3,000, the supplemental plan will pay up to $3,000 for out-of-pocket costs.
How much money can you save with a supplemental plan? Let’s say you have a supplemental plan with a $3,000 cap and it has a $100 deductible that you pay before the supplemental plan kicks in money. Your annual premiums cost $800. In this scenario, you could save up to $2,100 by having a TRICARE supplemental plan if you reach your cap.
While a TRICARE supplement plan can make sense for many, it’s not for everyone. The U.S. government notes that the cost of a supplement plan may be greater than the out-of-pocket expenses you might rack up in some situations.
Is TRICARE supplemental insurance worth it?
Insurance decisions are always specific to your situation. You’ll want to see how much you’re spending on out-of-pocket costs. A TRICARE Supplement plan could be a wise decision if the out-of-pocket costs you’re spending is more than a supplemental plan’s premiums.
“Everyone should consider purchasing TRICARE coverage, and do the math to see whether it makes sense for their unique situation,” Horrell says.
She says before purchasing a supplemental plan, you should weigh factors, such as:
- The amount of the premiums you will pay
- The catastrophic cap associated with the type of TRICARE plan you use
- Whether you have any pre-existing conditions
Other factors to weigh before deciding on whether to purchase a plan include:
- The type of health care services you and your family are likely to need over the next year
- How much you’re spending on out-of-pocket health care costs, and how much of this your plan is likely to cover
- The plans’ annual caps, including payments for specific services such as hospitalizations
As you research various plans, begin to narrow your search. Check carefully to see if paying for a TRICARE supplement plan is likely to save you money in the long run.
Once you go through this process, you’ll know whether a TRICARE Supplement insurance plan is right for you and which one will benefit you the most.
