Retiree Tricare Select Costs to Increase in 2021

The Defense Health Agency has announced the implementation of Congressionally-directed changes to the way that many military retirees, and their families, will pay for their coverage under the Tricare Select program.

Effective 1 January 2021, military retirees and families will pay an enrollment fee, similar to a monthly premium, for Tricare Select, if they fall under Tricare’s Group A designation. In addition, the catastrophic cap for Group A retiree families will increase from $3,000 to $3,500.

What’s Group A?

As part of ongoing and honestly confusing changes, the military has divided all military medical beneficiaries into two groups: Group A and Group B.

Group A families are those families whose military sponsor joined the military prior to 1 January 2018, with some weird way the rules are applied if you have a member on Tricare Young Adult.

Group B families are those families whose military sponsor joined the military on or after 1 January 2018.

What Is A Tricare Enrollment Fee?

Tricare currently charges enrollment fees for retiree families using Tricare Prime. While it is called an enrollment fee, it functions as a premium, being charged annually based upon the time you are enrolled in Tricare Prime. At this time, there is no enrollment fee for Tricare Select.

Beginning 1 January 2021, there will be enrollment fees for Group A retirees, and retiree families, using Tricare Select. Important note: medically retirees, plus their family members, and survivors (as defined by the DoD) are exempt from this fee.

• For an individual plan, you’ll pay $12.50 per month or $150 annually.
• For a family plan, you’ll pay $25.00 per month or $300 annually.

Group B families already have an enrollment fee. For 2020, that annual enrollment fee is $471 per individual/$942 per family, and it adjusts each year based upon on some calculation that I don’t know.

What Is A Catastrophic Cap?

A catastrophic cap is the total amount you’ll pay for covered services.

Charges that apply to the catastrophic cap include enrollment fees, deductibles, co-pays, and pharmacy co-pays. The amount of your catastrophic cap is based upon your Group (explained above) and duty status.

For 2020, the catastrophic cap for Group A retirees is $3,000, unless they have a family member on Tricare Young Adult, in which case, they use the Group B catastrophic cap of $3,655.

For 2021, the catastrophic cap for Group A retirees will be $3,500, with families using Tricare Young Adult paying the Group B catastrophic cap.

That is a $500 increase in the catastrophic cap from 2020 to 2021. Now, to be fair, that catastrophic cap hasn’t changed in years – longer than I can remember off the top of my head. And this isn’t a huge change. But it is a change, and it likely won’t be the last one. I wouldn’t be building your forever budget off of a $3,500 yearly catastrophic cap.

How Much Will This Cost Me?

That depends on how much care you usually use. If you usually reach your catastrophic cap, the new enrollment fee will be absorbed into the higher catastrophic cap, so your total costs will rise from $3,000 per year to $3,500 per year.

If you don’t usually reach your catastrophic cap, your cost will increase the $300 family premium, plus any yet-to-be-announced changes to deductibles and/or co-pays.

You can look at the complete list of Tricare Costs and Fees for 2020 here. This post will be updated when 2021 information becomes available.

This might be the right time for your family to consider picking up a Tricare Supplement.

What Do I Need To Do?

If you’re a retiree, or a retiree family, using Tricare Select, you will be contacted later this year to arrange your payment method. Enrollment fees can be paid via allotment from military retired pay, via electronic funds transfer, with a debit or credit card, or online through the Tricare regional contractor for your location.

If you do not set up payment arrangements by 1 January 2021, you will be disenrolled from Tricare Select. You’ll have 90 days to request reinstatement via the regional contractor.

Otherwise, you will be eligible for care from military treatment facilities on a space-available basis.

Military medical coverage under Tricare is still the best deal around, but this change is big. It’s probably also the way of the future. As budgets get further squished, more of the cost of military medical coverage will be moved to the beneficiaries.

I have to say, I’m sort of feeling like the frog who got put in a pot and didn’t realize that she was boiling until it was too late. While this change was part of the 2017 National Defense Authorization Act, I guess I just didn’t put all the pieces together until now, mostly because 2021 seemed really far away in 2016. We’ve had big changes to Tricare several years in a row. If it keeps up at this rate, it won’t look at all the same in 10 years.