Tricare Supplement: Do You Want One? Where Do You Get It?

A Short Tricare Primer

In order to understand whether a Tricare supplement is worthwhile for you, you have to have a basic understanding of your Tricare benefits. Tricare coverage may have four different types of costs: a premium, a deductible, co-payments, and out-of-network costs.

Tricare also has an annual catastrophic cap per family. The current (2023) catastrophic caps are:

• $1,000 for active duty families whose sponsor who entered the military prior to 1 January 2018
• $1,217 for active-duty families whose sponsor entered the military on or after 1 January 2018, plus Tricare Reserve Select (TRS) families and any active-duty families with a member on Tricare Young Adult (TYA)
• $3,000 for retired families using Tricare Prime whose sponsor entered the military prior to 1 January 2018
• $4,028 for retired families using Tricare Select whose sponsor entered the military prior to 1 January 2018
• $4,262 for retired families whose sponsor entered the military on or after 1 January 2018, plus those using Tricare Retired Reserve or have a family member on Tricare Young Adult

Knowing about the catastrophic cap is important in deciding whether a supplement is cost-effective for you. For example, folks with a larger family might find that the supplement is nearly as expensive as their catastrophic cap. Keep in mind, however, that there are some things that don’t apply to your catastrophic cap that a supplement might cover. It’s a very individual decision!

What Does A Tricare Supplement Pay For?

Every policy is different, but a Tricare supplement typically covers the co-pays for care, prescription co-pays, and allowable excess charges (that would not apply to your catastrophic cap.) Some plans even pay for your deductible!

Here’s an example: Jo Retiree has Tricare Prime goes to the physical therapist three times a week to recover from an injury. Her co-pays are $90 per week. Her Tricare supplement would probably cover those co-pays.

Most Tricare plans pay for the 15% extra that non-participating Tricare providers can charge to the beneficiary, so if you use non-participating providers, that can be a big benefit.

Why Buy A Tricare Supplement?

Each situation is different, but generally, a supplement can be financially beneficial to retirees whose only health insurance is Tricare.  Some active-duty families who use Tricare Select may also find a supplement worthwhile.  If you have other health insurance, such as employer-provided insurance, in addition to your Tricare coverage, you probably don’t need a Tricare supplement. Or, just to change things up, a Tricare supplement might make more sense than also taking your employer-sponsored health care coverage. Again, every case is different – you need to explore your exact situation.

The Math and Guesswork of Deciding On A Supplement

Figuring out whether a Tricare supplement makes sense takes a lot of math. It may seem like you’re trying to figure out whether the cost of the supplement is more than your catastrophic cap. But it’s actually more nuanced than that. You need to consider your Tricare enrollment fees, which the supplement won’t pay, plus your deductibles, plus any additional costs that might be covered by the supplement.

The short version of the equation is:

Supplement Cost + Deductible(s)  vs. Catastrophic Cap – Enrollment Fees

How Much Will The Supplement Cost

You start by figuring out how much the supplement will cost you. Most premiums are determined by Tricare plan, supplement deductible, smoker status, age and family size. As such, a larger family or an older couple or individual will pay more than a smaller family or a younger couple or individual. This is important to figuring out if a supplement makes sense for you.

Deductibles Matter

Then add the cost of any deductible you’ll have to pay. Most Tricare supplements have a deductible, and Tricare Select has a deductible which may or may not be covered by the supplement itself. Add the total cost of the premiums and any applicable deductibles to get the yearly cost of the supplement.

What’s Your Catastrophic Cap?

Your catastrophic cap is the most you’ll pay for Tricare-covered care in any given year. You can find your catastrophic cap here.

What’s Your Enrollment Fee?

Retirees pay an enrollment fee to use Tricare. You can find your enrollment fee here. It looks like a premium, it acts like a premium, but it’s not a premium for a very key reason: Enrollment fees count towards your catastrophic cap. That means that when you’re comparing the benefits of a supplement, you have to subtract the enrollment fees from your catastrophic cap to know the most the supplement will pay.

Compare The Costs

Compare the total cost you’ve calculated to pay for the Tricare Supplement to your catastrophic cap minus your enrollment fees.

Obviously, if the cost of the supplement plus deductibles is higher than the catastrophic cap, that’s not a very good deal for you. If the supplement plus deductibles is less than the catastrophic cap, then you’ve got to do some guessing and balance your tolerance for risk. How much care do you typically get in a year? Is it more or less than the cost of the supplement? How do you feel about possibly having a higher-than-usual medical year that costs you more than expected, keeping in mind that you’ll not go over your catastrophic cap as long as you don’t have uncovered service?

In most cases, the difference between the supplement and the catastrophic cap is only a few hundred dollars, so we’re not talking about a tremendous amount of risk either way.

Where Do I Buy A Tricare Supplement?

If you do an internet search on “Tricare supplement,” many choices will come up.  Most are offered through military organizations who contract an insurance company to provide coverage. Also, some employers may offer a Tricare supplement, purchased through them, and paid for via payroll deduction.

Here are some of the organizations that offer Tricare supplemental insurance:

Air Force Association (anyone can join):  Tricare Supplemental Insurance

American Military Retirees Association:  http://tricaresupplement.com/

Association of the US Army

GEA USA (I’m not sure about these guys…a lot of the stuff listed on their website makes it sound like they don’t actually understand Tricare very well. Or maybe they’re just simplifying and it’s confusing to me.)

Marine Corps Association & Foundation

Military Officers Association of America (TRICARE Supplements menu is next to Home in the navigation bar)

Military Benefits Association

Retired Association of the Uniformed Services (TRICARE Supplements information is next to Member’s in the red Navigation buttons)

Reserve Officers Association (insurance information can be found by scrolling down on the page)

Uniformed Services Benefits Association

How Do I Know Which Company To Use?

Be sure to get a copy of the potential policy from several groups to see which coverage will best fit your family’s needs.  Check things pre-existing condition coverage, deductibles, and maximum benefit limits.  The Tricare website has an excellent list of questions to ask about any supplemental insurance policy.  Be sure that the policy specifically states that this is a Tricare supplemental policy to ensure that Tricare can pay before the supplement.

Also, consider the cost to join the organization that is sponsoring the policy.

If you’re getting a Tricare supplement through your employer, you may not have a choice of policies. You can still make sure their cost is competitive.

Some Examples

Let’s look at some examples of how this maths out differently for each situation. The point of these examples isn’t to find someone like you. The point of these examples is to make the point that every single situation is unique.

Example: Sarah and Andy Jameson

Sarah Jameson is a 43-year old retired airman. She is married to Andy, who is 45, and they have four kids under the age 12. They use Tricare Prime, Group A,  and live near a large military hospital, which provides almost all of their care. Their primary concern is their daughter’s non-military therapist, for whom they pay $39 a visit, once a month. They’d like to stop paying that co-pay!

Sarah looks at the Air Force Association plan. They’ve had good luck staying with in-network providers, so they choose the plan that does not cover Point-of-Service costs. The cost would be:

Their family catastrophic cap on Tricare Prime is $3,000 per year, and they pay a $765 enrollment fee each year. So the most a Supplement will cover is $2,245 per year.

The Jamesons estimate their total out-of-pocket medical expenses each year are just $39 X 12, or $468 for the year. The supplement would cost them more than twice that, but it could fill in if they had additional unexpected medical costs in any given year.

Sarah and Andy consider their options. Taking into consideration their location near the hospital, their experience being able to get care there and their ability to absorb some additional costs if necessary, they decide that adding the additional cost of the supplement doesn’t make sense for them right now. Instead, they’ll take the $997 annual supplement premium into a savings account and use it when they have out-of-pocket medical expenses. If they continue to just have $468 in bills each year, they’ll be accumulating $500 a year into that account, which can fill in the gap if they have an unexpectedly high medical cost year.

If their medical needs change in the future, they will re-evaluate.

Example: Clark and Elizabeth

Clark is an active duty Marine. He is married to Elizabeth, and they have three kids. They use Tricare Select, and their medical costs vary from year to year. As an active duty service member, they have a $1,000 catastrophic cap, but they rarely meet it. They are looking at the plan from the Military Benefits Association, and think that the $0 deductible plan makes the most sense for them.

This plan would cost $59.91 per month for Elizabeth and the kids, or $718.92 per year.

Clark and Elizabeth would save money with this plan in years when their co-pays exceed $719 per year, and they would lose money with this plan in the years that their co-pays are less than $719 per year. More importantly, the most they’d ever “gain” is $281 per year – the difference between their supplement premium and their catastrophic cap.

Clark and Elizabeth decide that a supplement doesn’t make sense for them, because it locks in a $719 cost that they may not recoup every year, and the potential for benefit is only $281 each year.

Example: Lee and Kelley

Lee is a 56 year-old retired Navy captain in Tricare Group A. Lee and his wife, Kelley (age 57), live in South Florida. Their disabled adult daughter remains on his Tricare coverage. They are on Tricare Select – it’s the only option where they live.  Neither spouse smokes. Their other kids are grown and no longer covered by Tricare. The family meets their catastrophic cap every year.

Here is how Lee and Kelley figure out whether a Supplement makes sense for them:

The family’s catastrophic cap in 2026 is $4,381. They pay $375 in enrollment fees, and a $300 annual deductible. Therefore, the most that a Supplement would cover is $3,706 per year. And, because they meet their catastrophic cap each year, the supplement probably would pay that most years.

Lee is looking at the AUSA plan. This plan premium costs $37.77 per month for each adult, plus $17.89 for their daughter, for a total cost of $93.43 per month, or $1,121.16 per year. The supplement also has a $250 per person deductible each year, so $750 for the family. The total cost of the supplement would be $1871.16 per year.

For Lee and Kelley, it seems pretty obvious that the supplement is going to pay for itself every year, since it will cost them $1871.16 and will likely pay around $3,700 each year. They decide to proceed, knowing that this plan won’t make any payments for pre-existing conditions for six months.

The Bottom Line

Tricare supplements can be a great way to bring predictability to your healthcare costs, and they may save you money on your co-pays and other costs. Be sure to investigate the choices and see if a Tricare supplement is the right choice for your family. You don’t want to lock yourself into supplement premiums if there won’t be a benefit to your pocketbook.