Veterans, VA Benefits, and Medicare

The U.S. Department of Veteran’s Affairs (VA) provides health care coverage for veterans who served in the U.S. military. Veterans must qualify and normally receive benefits at VA facilities and other VA locations.

When it comes to VA health benefits, signing up for Medicare is like topping off a gift with a fancy ribbon. That’s because unlike some other insurance plans, you can keep your VA health benefits and add on Medicare too.

Individuals with questions about VA benefits can call 1-800-827-1000 (TTY: 711). Or visit va.gov. VA benefits may change so it’s important for veterans to confirm their VA plan benefits. Veterans can also contact their local State Health Insurance Program (SHIP) for free health insurance counseling and assistance.

How Does Medicare Work with VA Benefits?

It’s not mandatory to enroll in Medicare at age 65 if you’re a veteran with VA benefits. However, if you choose not to sign up for Medicare, you won’t have coverage for services you get in facilities outside the VA health system. If you have VA health benefits and qualify for Medicare at age 65, you can be enrolled in both plans at the same time. In fact, the VA strongly encourages veterans without employer-sponsored insurance to sign up for Medicare Parts A and B as soon as they qualify.

Having VA benefits and Original Medicare gives you more choices for your care. With Medicare, you’re covered if you ever need to or choose to go to a non-VA hospital or doctor. And keeping your VA benefits means you can get coverage for services and items not covered by Original Medicare, such as hearing aids and over-the-counter medications. Plus, there’s no guarantee the VA will have the funding to continue to cover all eligible veterans in the future. Medicare can give you peace of mind you’ll be able to get the medical care you need.

VA benefits and Medicare are separate systems and not coordinated in any way. Rather, you decide which benefits you want to use when receiving care.

• To use your VA benefits, you must visit a VA doctor or facility. In some cases, the VA will cover care at a non-VA facility if it’s pre-authorized. Medicare may step in to pay for services the VA has not authorized.
• To use your Medicare benefits, you must receive care at a Medicare-authorized facility. Your VA benefits will not cover your Medicare out-of-pocket cost, like copayments.

Doesn’t That Cost More?

Yes, you can save money if you just keep your VA health benefits and not enroll in Medicare. For most people who have worked and paid Social Security taxes for at least ten years, Medicare Part A costs nothing. However, Part B comes with a standard monthly fee ($174.70 for most people in 2024). Those who have a higher income pay a higher Part B premium. If you’re worried about affording the Part B premium, see if you qualify for Medicare Savings Programs that can help pay your Medicare out-of-pocket costs.

Here are a few questions to consider.

What priority group am I in? Your priority group affects when benefits start and what’s covered with VA benefits. Priority groups range from 1 to 8 and are based on the following.

• Military service history
• Disability rating
• Income level
• Whether or not you qualify for Medicaid
• Other benefits being received like a VA pension

Veterans in the highest priority groups (1 and 2) receive the most benefits. Copay rates are higher in the lower priority groups (7 and 8). Priority groups may change in some cases, such as if: your income changes, or your service-connected disability gets worse, and you’re given a higher disability rating.

What VA benefits will I have in the future? Medicare is a safety net in case VA benefits change.

What happens if I wait to enroll in Medicare? The U.S. Department of Veterans Affairs encourages veterans to sign up for Medicare when eligible. Why? First, most won’t pay a premium for Medicare Part A. Second, when waiting to sign up for Medicare Part B, you pay a penalty every year for the rest of your life. That penalty gets larger every year you wait to sign up. If you miss your Initial Enrollment Period (IEP) for signing up, you may need to wait until the General Enrollment Period (GEP). This period runs every year from January 1 to March 31. Coverage starts the first day of the month after you sign up.

How close am I to a VA facility? If you don’t live near a VA facility, Medicare is a good choice. It will provide a closer, Medicare-approved facility.

2. What About Prescriptions?

VA benefits include coverage for prescription drugs. Enrollment in the VA health care system is considered creditable coverage for Medicare Part D purposes. This means VA prescription drug coverage is at least as good as the Medicare Part D coverage. So, if you have VA drug benefits, you won’t pay a late-enrollment penalty if you sign up for a Medicare prescription drug (Part D) plan later. If you lose your VA drug benefits, you must sign up for Medicare Part D within 63 days to avoid a penalty.

If you have a VA drug plan, you must fill your prescriptions at a VA pharmacy. And the prescription must be written by a VA doctor. If you sign up for Medicare Part D drug coverage, you can use it to get prescriptions from non-VA doctors. Having Part D also allows you to fill your prescriptions at a local pharmacy instead of through the VA mail-order system. If you do join a Medicare drug plan, you cannot use both types of coverage for the same drug at the same time. One thing to remember: if you have Original Medicare and a standalone Part D plan, if you enroll in any Medicare Advantage plan, such as an MA-only, HMO, PPO plan, it will disenroll you from your standalone Part D plan.

3. Put a Bow on It

The bottom line: If you have VA benefits and then qualify for Medicare, it’s important to weigh the coverages provided by both plans. Depending on your priority group, you may lack benefits for certain VA health services or have more out-of-pocket costs. Even if you’re satisfied with your current VA benefits, consider the fact that life changes. You might end up moving somewhere with less access to VA facilities. Or decide you want to see a non-VA provider. Having Medicare can give you the added flexibility you need.

Want to package together your VA health benefits with Medicare but have questions? Talk with one of our licensed insurance agents today.

MR653a 2/2024