9161 / What should retired servicemembers understand about expenses related to medical care and long-term care?
The longer a retiree lives, the more likely it becomes that healthcare costs will increase while retirements savings decrease. As retirees age, they are more likely to face ever-increasing healthcare and long-term care (LTC) costs. Additionally, retirees will have used up more of their retirement savings, if any, regardless of changing income tax rates, due to the number of years they have drawn on the savings. The primary concern for retirees regarding longevity is running out of savings and impoverishing a well spouse with the cost of one’s LTC driven by Alzheimer’s disease, dementia, or another serious disease.
Medicare and Tricare for Life
Like civilians, military retirees are entitled to Medicare. They are also entitled to receive Tricare for Life. Having served for a qualifying period prior to retirement, the military retiree receives Medicare Part A for life with no monthly premium. Medicare Part B premiums, assuming income of $182,000 or less for a married couple filing jointly, cost about $164.90 per month in 2023.1 Enrollment in Medicare Parts A and B is a requirement for enrollment in the Tricare for Life program.
The Tricare for Life (TFL) program is an entitlement benefit for military retirees from the active and reserve components that is provided with no monthly premium and a $150 deductible. TFL is administered by the Department of Defense and is not associated with Medicare.2 TFL generally covers the medical costs of retirees associated with medical care that Medicare Parts A and B do not fully cover such as doctor visits, urgent care, emergency room visits, and inpatient services. Medicare is billed first and then TFL covers the remaining portion not covered by Medicare. TFL also covers or substantially reduces the cost of prescription drugs for retirees.3
Long-Term Care