A common question for working military spouses and military retirees is, “Should I take my employer’s health insurance, since I have Tricare?” It’s a smart question to ask, but you’ll need some details to find an answer.
Understanding How Tricare and Other Health Insurance Work Together
In Tricare language, any other health insurance is called OHI.
The most important thing to know is that Tricare always pays second to OHI except for Medicaid, Medicare, specifically designated Tricare supplements, and a couple of other very unique government programs like state run victim compensation programs and Indian Health Care. So if you take your employer’s healthcare, it will pay first and then the balance will be submitted to Tricare.
Side note: Be sure you understand your Tricare options, either active duty or retired. I’ve talked to people who are willing to pay pretty significant premiums for OHI based upon misunderstandings of the Tricare system. In particular, people will tell me that they don’t want to go get their care on base, or deal with referrals. Once I explain Tricare Select, they realize that maybe they don’t need OHI to get the flexibility they want.
How Much Are You Paying For Tricare?
First, you need to know how much you’re paying for Tricare. This article can help you figure it out, but I’ll summarize the most important parts here:
Consider your Tricare catastrophic cap. This is the most you’ll pay for covered services in a year. For active duty families, it is $1,000 for sponsors who joined the military prior to 1 January 2018 and $1,044 for sponsors who joined the military one or after 1 January 2018. For retiree families, it is $3,000 for sponsors who joined the military prior to 1 January 2018, and $3,655 for sponsors who joined the military on or after 1 January 2018.
In many, many cases, just the premium on the other policy is more than the catastrophic cap on Tricare.
How Much Healthcare Do You Use?
The catastrophic cap is important because it represents the most you’ll pay for covered care, but many families never get anywhere near their catastrophic cap. In that case, you may want to consider the ongoing costs.
Each combination of plans (active duty vs. retiree, Group A vs. Group B, and Prime vs. Select) has their own costs. As I mentioned before, this article is a good place to figure out the costs you will have for each plan. Some, like Tricare Prime for active duty family members who use a Military Treatment Facility, have nearly no out of pocket costs. Others plans may have an enrollment fee and/or ongoing co-pays for care. Note the change for 2021: Tricare Select will have an enrollment fee for retirees and their families.
If you think that you never use enough health insurance to meet your catastrophic cap, map out the health care that you do use in a year and figure out what it will cost you with and without OHI. Keep in mind that these are just estimates and you could have a very light health care year, or you could have an injury or illness that blows these estimates out of the water.
How Much Will Tricare Pay After Your Other Health Insurance?
The first step is to submit your claim to your OHI. It’s super important to follow the rules of your OHI. If your OHI denies a claim for any reason, including a lack of referrals, Tricare will generally also deny the claim.
Once your claim is paid by your OHI, it is then forwarded to Tricare.
If the provider was a Tricare network provider, or a participating non-network provider (who accepts Tricare assignment), Tricare will pay the smaller dollar amount of these three calculations:
- billed amount minus the OHI payment, so no balance remaining
- amount TRICARE would have paid without OHI, little to no balance remaining
- amount beneficiary owes after the OHI paid (usually the OHI copayment or cost share), so no balance remaining
If the provider was a non-participating provider (does not accept Tricare assignment), Tricare will pay the smaller dollar amount of these three calculations.
- 115 percent of the allowed amount minus the OHI payment
- Amount TRICARE would have paid without OHI
- Amount beneficiary owes after the OHI paid (usually the OHI copayment or cost-share)
It’s important to understand that non-participating providers may only bill a Tricare beneficiary up to 115% of the Tricare allowed amount. If the OHI paid more than 115% of the Tricare allowed amount, Tricare will not pay any remaining portion, as the charge is considered paid in full and the provider may not bill the beneficiary.
Prescription coverage works pretty much the same way as health care coverage. Your OHI will pay first, and Tricare will pay second. Use a Tricare network pharmacy to keep your costs as low as possible, and inform the pharmacy staff of both insurance plans.
Beneficiaries with OHI are permitted to use military treatment facility pharmacies, but will need to provide their OHI information so that the Department of Defense can bill the OHI.
Tricare beneficiaries with OHI may not use Tricare Home Delivery (Express Scripts) unless their OHI does not include pharmacy benefits, the drug is not covered by the OHI, or you have met your OHI’s benefit cap.
What About Active Duty Members?
Active duty service members, including activated reservists and National Guard, can not use other health care as their primary coverage. As a general rule, they are only covered by Tricare. If an active duty service member wishes to try to coordinate with their OHI, they need to work with their Tricare contractor first.
The Tricare Young Adult Twist
One situation in which carrying other health insurance may make sense is if you have one or more kids who are no longer eligible for regular Tricare coverage, but are not yet 26. If you are considering covering them under Tricare Young Adult, they would almost always be covered under your other health insurance, possibly at no additional charge. This could change the math entirely, particularly if you have multiple kids in that gap.
One Other Thing To Consider
There is one other thing to consider when deciding whether to use OHI with Tricare: What is your mental and emotional capacity for dealing with paperwork and other issues? In theory, OHI and Tricare are supposed to work together smoothly, and sometimes that works out. But sometimes it doesn’t. If you can’t stand dealing with insurance issues, or you just don’t have time, then that might push you towards sticking with Tricare alone.
Every situation is different, and there’s no right answer for everyone. You have to consider the coverage and costs of your other health insurance, and the coverage and costs of Tricare, how they’ll work together, and your family’s medical needs. In a vast majority of cases, Tricare beneficiaries find that there is no good reason to take the outside health insurance. Don’t make a decision without thoroughly understanding how it all works!
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