If you’re confused about healthcare benefits through the U.S. Department of Veterans Affairs (VA), you’re not alone. Below is some information about how VA benefits work and what happens when someone with VA healthcare coverage becomes eligible for Medicare.
Information About VA Healthcare Coverage
If you’ve served on active duty in the armed forces and meet certain criteria, you may apply for VA healthcare coverage. Eligibility criteria include:
Length of service
Available VA resources
Priority levels are an important part of VA healthcare coverage. If the VA determines that you qualify for healthcare coverage, you will be assigned a priority level based on a scale of 1 to 8. One is the highest priority and 8 is the lowest. Your priority level determines what type of health benefits you receive. It may also determine when you will be scheduled for medical care or, if necessary, your placement in a VA long-term care facility.
For example, if you’re considered a priority level 8, you will get far less coverage and slower access to care than if you were a priority level 1 or 2. In general, the more you need healthcare coverage due to a combination of service-related disability and low income, the more coverage you receive from the VA.
Types of Benefits
If you qualify for VA health benefits, regardless of what priority level you are, you get access to the VA’s Uniform Benefit Package, which includes:
Preventive care and services
Inpatient hospital care
Home health care
Prescription drug coverage
Durable medical equipment
Substance abuse services
Adult day care
Nursing home care
Pros & Cons of VA Healthcare Coverage
- It’s free or low cost
- You can receive care at any VA facility
- If you’re very sick and/or have extremely low income, you receive first priority
- It offers creditable prescription drug coverage, so you don’t have to purchase a Medicare
- Part D plan or Medicare Advantage plan with Part D
- Care is prioritized based on who is most sick and/or has the lowest income
- Some VA facilities have very long wait times for necessary procedures
- You can only see VA doctors/go to VA facilities or approved non-VA facilities
- Prescription process may require that medications need to be filled at or verified by a VA
Medicare Benefits Can Enhance VA Healthcare Coverage
Medicare Parts A & B
If you have VA coverage, you automatically get Medicare Part A (hospital care) when you become eligible for Medicare due to age or disability. When your date of eligibility approaches, you will receive a notice and an ID card from Social Security. You will also receive information about your Part B (medical services) premium, which is deducted from your monthly Social Security check unless you choose to pay your premiums in some other way.
While there is some cost associated with Part B, there are definite benefits to having Medicare coverage. These include greater flexibility in healthcare options and greater overall cost savings. This is important if your VA health coverage gets reduced or denied at any point. Funding for VA benefits and the priority groups is set by Congress each year and can be unpredictable. So you don’t want to suddenly find yourself having to make up unexpected, increased out-of-pocket medical costs, especially if you’re in one of the lower priority veterans groups.
Part B Penalty
If you’re eligible for Medicare Part B, but decide not to take it, you’ll have to pay a penalty later if you change your mind and add it to your Medicare coverage.
The penalty can be substantial as it adds an extra 10% to your monthly Part B premium for each full 12-month period that you could have had Part B but didn’t sign up for it. Plus, you’ll have to wait until the general enrollment period to sign up. This period lasts from January 1 to March 31 each year, and coverage does not begin until July 1.
There are exceptions to the Part B enrollment penalty. The most common exception is having comparable coverage through a spouse’s employer, which can allow you to delay your enrollment in Part B until after you lose that coverage.
Part C (Medicare Advantage)
Medicare Advantage plans typically combine the same coverage that’s provided by Medicare Parts A and B, and may include additional benefits and services. If you have VA benefits, but need medical services that the VA does not cover, you can simply use your Medicare Part A and B benefits at the time of service. However, some people find that enrolling in a Medicare Advantage plan works best for them, even if they already have VA benefits.
Part D (Prescription Drug)
The VA’s Uniform Benefits Package offers prescription drug coverage, and Medicare offers the same, which is known as Part D. If you get a Medicare Part D plan, generally, you will need to pay monthly premiums to keep it. Your costs may be less if you purchase a Medicare Advantage plan (Part C) that includes prescription drug coverage.
The drug coverage you receive through the VA is considered as good as or better than that offered under a Part D plan and is premium-free, so you may not need both. However, you most likely will be required to fill your prescriptions at a VA-approved pharmacy or by the Consolidated Mail Outpatient Pharmacy Program (CMOP). If you decide later you want a Medicare Part D plan for whatever reason, there is no late-enrollment penalty.
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Pros & Cons of Having VA Healthcare Coverage and Medicare
- You can get care from both VA and non-VA-approved healthcare providers
- You can have Medicare and prescription drug coverage as good as Medicare Part D without
having to pay for a stand-alone Part D plan
- If you want medical care now, but there’s a waiting period at the VA, you can find a
- Medicare provider to see you sooner
- You have to pay your Medicare Part B premium every month
- Some people may be confused about when to use a VA facility versus a non-VA provider
that accepts Medicare
- You may have an extra Part D premium, if you choose this added coverage
- You may face Medicare Part B late-enrollment penalties if you improperly handle your
- Medicare enrollment and deferral choices
VA Healthcare Coverage and Medicare Plans are Different
The VA and Medicare do not coordinate benefits. The two plans are separate and seldom coordinate payments to give you extra cost savings. For example, if you receive care or have an outpatient procedure at a non-VA facility, only Medicare will cover that procedure, unless you have received prior authorization from the VA.
There are exceptions, of course. For example, an emergency may require you to go to the nearest medical provider, which is a non-VA facility. In this case, the VA may pick up some of the cost until you can be moved to a VA facility for further care.
Having Medicare coverage, however, can still provide you with more options for care than VA health benefits It can also provide you with a secondary source of coverage if VA funding or facilities get scaled back.
Deciding When to use VA Healthcare Benefits or Medicare
Since your VA coverage is free, if you’re high on the priority list and there isn’t a long wait to get care, it may be wise to use your VA coverage instead of Medicare. VA coverage may be preferred, especially if you need inpatient hospital care or prescription drugs, because you’re getting low- or no-cost health benefits in a timely manner.
However, every VA office operates differently, and one facility may provide a different quality of care than another. Also, some facilities may have shorter wait times than others for access to specialists, certain medical procedures or treatment. If you face a long wait time for medical care (for example, you need to see a physical therapist or have an operation, but the VA waiting list is several months long), you might want to consider using your Medicare coverage outside the VA healthcare system. The same applies if you want to undergo a medical procedure or take a prescription drug that’s not approved by the VA.
Because your healthcare situation is unique, you should carefully consider both your financial and healthcare needs when choosing what healthcare coverage will work best for you.
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