LECP Webinar: VA Benefits and Medicare

Presented by NAIFA’s Limited and Extended Care Planning Center

Featuring Dan Mangus, Vice President of Sales, Senior Marketing Specialists

Approximately 18 million military veterans live in the United States and they have a median age of 65. Of Vietnam-era veterans, approximately 98% are men, said Dan Mangus, Vice President of Sales for Senior Marketing Specialists, but that trend is changing with more women veterans reaching retirement age. Some veterans’ benefits are also available for spouses and dependents.

“So if you’re working with individuals who are retired or maybe families of individuals who are, it’s very important to start asking, ‘Are you a veteran?’” Mangus said. “You don’t necessarily have to become an expert in it, just point them in the right direction or maybe raise that question with them. And you might find your value to them as an advisor just stepped up a little bit and you can help those people a little bit more. Because that’s what we’re all trying to do.”

The VA System

The U.S. Department of Veterans Affairs (VA) provides a health care system that is available to most veterans who were honorably discharged. Those who enlisted after Sept. 7, 1980, or entered active duty after Oct. 16, 1981, must have served at least 24 continuous months on active duty to qualify, though there are some exceptions, including veterans discharged due to disability related to their service or due to hardship. Former members of the reserves or National Guard are only eligible if they were called to active duty (not including training) and completed their full term of active duty.

The VA healthcare system provides a variety of services for veterans and is designed to treat illnesses and injuries, prevent future health problems, improve functionality and enhance quality of life. Specific services include: inpatient care, prescriptions, preventative care, urgent and emergency care, walk-in health clinics, mental health services, assisted living and home health care, therapy and rehabilitation and routine eye exams and preventative tests.

It’s important to understand that the VA system is different than the military health care provided to active duty personnel, Mangus said.

Priority Groups

The VA system provides care based on patients’ assignment to one of eight “priority groups.” The priority group assignment can affect patients’ access to benefits, the amount of time it takes to access benefits and how much (if anything) the veteran has to pay toward the cost of their care.

Priority Group 1 is for those with a service-related disability that is 50% or more disabling or makes the veteran unable to work. Veterans who received the Medal of Honor are also in Priority Group 1. Veterans in this priority group are likely to receive access to benefits most quickly. Veterans are assigned to the other priority groups based on such factors as: the extent of their service-related disability, whether they were prisoners of war or were awarded the Purple Heart, the dates and locations of their service, their ability or inability to work due to disability and their gross household income.

It is important for advisors working with veterans to understand the VA priority groups. A veteran’s priority group can change, so it is important that they are evaluated every 12 to 18 months, Mangus said.

Veterans with other forms of health care coverage, including private insurance, Medicare, Medicaid, or TRICARE, do not lose their VA system benefits. The VA will not bill Medicare or Medicaid, but it will send bills to private insurance plans, including Medicare supplement plans. Veterans in priority groups six through eight are responsible for copays of $15 for primary care visits and $50 for specialty care visits. For inpatient treatment, these veterans must also cover $1,300 for the first 90 days of care plus $10 per day. VA system prescriptions must be prescribed by a VA physician and are filled for $5 for generics, $8 for nonpreferred generics, and $11 for name-brand drugs.

Advisors working with veterans should look at the cost of various options when it comes to prescription drugs. Sometimes the VA system will be cheaper, but sometimes a Medicare Part D benefit or a discount program will be, Mangus said.

Advantages of Medicare Enrollment

Many veterans choose to enroll in Medicare and purchase Medicare supplemental plans. This does not diminish their VA benefits. It can be advantageous if a veteran ever wants to receive treatment outside of the VA system, such as at their local hospital.

Future funding for the VA system is not certain, Mangus said. It’s possible that veterans in lower priority groups could lose coverage if there is a shortage of funds or the rules change. Veterans who delay enrolling in Medicare Part B because they are relying on VA benefits may face penalty payments for late enrollment. Medicare Part D plans give veterans more flexibility to fill prescriptions at their local pharmacy rather than using the VA prescriptions by mail system.

TRICARE for Life

TRICARE for Life (TFL) is a group health plan for retired veterans with 20 years or more of service. It is important to note that TFL pays only up to 20% of medical costs for non-service-related treatments from non-Medicare providers, and the VA system is a non-Medicare provider. Advisors of veterans in the TFL plan need to consider whether the service member’s treatment is service-related. If it is, it is probably best for them to go to a VA facility. If not, it will likely be more cost-effective to use a Medicare provider, Mangus said.

There are no TFL enrollment fees. Medicare is the base coverage and TFL layers on top of that. It pays after Medicare in the United States and U.S. territories and also pays after any employer-provided health plans or individual health insurance. It also pays for services not covered by Medicare and comes with deductibles and copays.

“This is extremely relevant because a person can have original Medicare or they might have Medicare Advantage,” Mangus said. “Either one is still Medicare and then TRYCARE for Life wraps around that. This year, almost all of the major insurance carriers dramatically expanded their TRYCARE for Life Medicare Advantage programs.”

Medicare and TFL do not cover custodial long-term care. Medicare typically covers hospitalizations with skilled nursing care of at least three days up to 100 days. TFL will continue to pay indefinitely beyond Medicare’s 100-day limit, if the patient is at an in-network facility.

TFL has an excellent prescription drug benefit, Mangus said, that can be complicated by Medicare Part D plans. He recommends that advisors of clients who have TFL and want Medicare Advantage plans to opt for MA only without drug plans.

It is important for advisors to make sure their clients with TFL keep their information in the Defense Enrollment Eligibility Reporting System (DEERS) up to date to ensure access to benefits and avoid claims-related problems. They can enter and update their information online.

Aid & Attendance

Veterans who require the aid of another person to perform personal functions required in everyday living, are bedridden, or meet other criteria may qualify for the Aid & Attendance (A&A) increased monthly pension.

“Where this is really, really important is for individuals who are widows,” Mangus said. “They may not even think about it. Their spouse may have died 20 years ago. … But Aid & Attendance is a wonderful way to help and it is very underutilized.”

It is vital to get A&A information from a reliable source, preferably from the VA, because there is a lot of information on the internet that may be inaccurate or may include advice that is not in the best interest of most people, Mangus warned. Some companies charge significant fees to fill out forms the recipients could easily fill out themselves.

Community Care

More and more frequently, the VA is providing some services through community providers outside the VA system. This may include minute clinic services, flu shots, maternity care, emergency care or hospice care. Community care options can provide added convenience as well as some services than can be hard to find within the VA system. However, when utilizing community care options it is important to pay attention to coinsurance amounts and copays that may affect out-of-pocket costs.

Mangus provided an extensive list of online resources advisors and veterans can access for information on VA services.

Veteran Resources

10 Key Resource Links: