Paycheck Chronicles

Could a VA/Medicare Advantage Combo Work for You?

The number of people receiving Medicare benefits through a private health plan has skyrocketed from more than 5 million to nearly 18 million — an increase of roughly 260 percent — since 2004, according to the Kaiser Family Foundation*.

Why?

It could be because lots of people are interested in getting extra coverage. Some Medicare Advantage plans offer hearing, dental and wellness programs that aren’t paid for under Medicare. It also could be that many Medicare recipients want the peace of mind that comes with limiting maximum out-of-pocket outlays. That’s a feature of Medicare Advantage plans not available through traditional Medicare which does not put a limit on the amount recipients could pay for services. And while Medicare doesn’t cover you if you’re on vacation outside the U.S., a Medicare Advantage plan could provide worldwide emergency coverage.

A common question we’re asked at USAA is whether a Medicare Advantage plan makes sense for those using VA health care. While it’s probably not necessary for retirees using TRICARE for Life, it could work for people utilizing VA health coverage. This year, you may want to check it out. Medicare Annual Enrollment, which runs from Oct. 15 to Dec. 7, is nearly upon us. It could be a great time to shop, and check out the costs, limitations and specific details.

Here are seven things to consider as you weigh a decision to supplement your VA health care with a Medicare Advantage Plan:

  • You’ve got to have Medicare Part A and B. A Medicare Advantage plan allows you to receive your Medicare benefits through a private insurance provider; however, to be eligible you must sign up for Medicare Part A and Medicare Part B. In 2017, the standard cost of Medicare Part B is $134 per month, but those with higher incomes may pay more. And, if you sign up late you’ll pay a higher premium. Generally, you sign up around the time you hit age 65. You may avoid the late enrollment penalty in certain situations (for example, you have employer health coverage), but don’t forgo signing up for Part B coverage by your deadline without serious consideration. Visit Medicare.gov for all the details.
  • Cash flow is king. For many veterans, VA health care services don’t cost anything and even if there are expenses, they’re relatively low. However, the VA does encourage you to take Medicare parts A and B. With a Medicare Advantage plan you’d be talking about adding a modest monthly premium. According to Kaiser Family Foundation, the average premium in 2017 for a plan including drug coverage is less than $40 per month.** In some areas of the country, there may be no premium.
  • The potential to minimize travel and delays. If wait time at a VA facility or through the Veterans Choice Program is an issue for you, or travel is a hassle, adding Medicare Advantage coverage could be a cost-effective way to create another channel of care.
  • All-in-one package. According to USAA health care representatives, the one feature of Medicare Advantage plans that our members appreciate most is having all of their needs covered in one plan.
  • Loss of care/eligibility for VA care. Eligibility for VA health coverage is not guaranteed and could change over time. This could be true, especially, at times when budgetary issues are top-of-mind in Washington. A Medicare Advantage plan could be your fallback.
  • You can have both. Coverage through a Medicare Advantage Plan does not conflict with VA health care services and would increase your flexibility and options in terms of how and where you receive health care.
  • Second opinion. With Important health issues, you may want to get a second opinion. Having two separate health care sources— the VA and a Medicare Advantage plan — could provide the means to do that.
It’s important to remember that not all Medicare Advantage plans are created equal. There are HMO plans, PPO plans, plans that include prescription drug benefits and plans that don’t cover medication. The good news is that our team of health insurance advisors at USAA is here to answer the Medicare-related questions that you have – and some you may not have even thought to ask. Details for 2018 plans become available Oct. 1, so beat the rush and give them a call at 877-699-2654.

*Medicare Advantage 2016 Spotlight: Enrollment Market Update, KFF.org, 5/11/16

**Medicare Advantage Plans in 2017: Short-term Outlook is Stable, KFF.org, 12/21/16

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