Veterans and Medicare: How VA Benefits and Medicare Work Together

Many veterans assume that VA healthcare coverage means they don't need Medicare -- or that the two programs work together seamlessly. Neither assumption is correct. Understanding how VA benefits and Medicare interact is essential for veterans approaching age 65.

VA healthcare and Medicare are completely separate programs. They do not coordinate benefits -- you cannot use both for the same service. When you receive care at a VA facility, Medicare doesn't pay anything. When you receive care from a Medicare provider, VA doesn't pay anything.

This means veterans effectively have two separate healthcare systems available to them -- and choosing which to use for each situation is an important decision.

Yes -- and here's why:

VA coverage can change. VA eligibility and benefits depend on your service-connected disability rating, income, and Congressional funding. Benefits can be reduced or restricted. Medicare provides a stable, guaranteed backup.

VA doesn't cover everything. VA coverage is generally limited to VA facilities and VA-approved providers. If you need care urgently while traveling, or want to see a specialist outside the VA system, Medicare provides that access.

Medicare Part A is usually free. If you've worked 40 quarters, Part A has no premium. There's no reason not to enroll.

Delaying Part B has consequences. VA coverage does NOT count as qualifying coverage for delaying Medicare Part B. If you delay Part B past your Initial Enrollment Period without qualifying employer coverage, you'll pay a permanent penalty.

This is the most important decision for veterans approaching 65:

If you rely primarily on VA care and have limited income: Some veterans choose to delay Part B to avoid the premium. This is a calculated risk -- if your VA benefits change or you need non-VA care, you'll face a penalty and a coverage gap.

If you want flexibility and security: Enroll in Part B during your IEP. The premium ($134/month in 2017) buys you access to the entire Medicare provider network as a backup to VA care.

If you have a service-connected disability rating of 50% or higher: Your VA care is comprehensive and stable. The Part B decision is more nuanced -- consult a benefits counselor.

Veterans who are also military retirees (20+ years of active duty service) may be eligible for TRICARE for Life (TFL). TFL is a Medicare wraparound program that pays after Medicare -- essentially eliminating most Medicare cost-sharing.

With TFL, you must enroll in both Medicare Part A and Part B. TFL then covers most of what Medicare doesn't -- deductibles, copays, and coinsurance. The result is near-zero out-of-pocket costs for most healthcare.

TRICARE for Life is one of the best supplemental coverage options available to any Medicare beneficiary.

Veterans can enroll in Medicare Advantage while maintaining VA benefits. However, MA plans have networks -- you must use in-network providers for non-emergency care. VA facilities are generally not in MA networks.

For veterans who use both VA and non-VA care, Original Medicare + Medigap often provides more flexibility than Medicare Advantage.

CHAMPVA (Civilian Health and Medical Program of the Department of Veterans Affairs) covers dependents of veterans with a 100% permanent and total service-connected disability, or who died from a service-connected condition. CHAMPVA coordinates with Medicare -- Medicare pays first, CHAMPVA pays second.

1. Enroll in Medicare Part A at 65 -- it's usually free and there's no reason to delay
2. Carefully consider Part B -- VA coverage does NOT protect you from the late enrollment penalty
3. If you're a military retiree, enroll in both Parts A and B to activate TRICARE for Life
4. VA and Medicare work independently -- you choose which system to use for each situation
5. Consult a VA benefits counselor or SHIP/SHINE counselor for personalized guidance

We do not offer every plan available in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.