(Mahalo nui loa to alert reader “Ben” for providing the resources and links to this post!)
Americans are concerned about the Patient Protection and Affordable Care Act. Those of us with military experience and heading toward financial independence are even more concerned about military benefits. How will the ACA affect military servicemembers, veterans, and retirees? Will Tricare still be around? Will expenses go up? What’s next?
Believe it or not, the ACA has already done some good things for Tricare and veterans. However there’s legitimate concern (assuming the ACA works as intended) that DoD will attempt to modify Tricare benefits or even shift over to an ACA system.
In 2011 there were over 24 million living U.S. military veterans who served for less than 18 years (many of whom were drafted), and over five million of them used VA healthcare services during the year. (That link downloads a PDF study.) Depending on the studies and surveys you read, 1-2 million of these military veterans currently have no health insurance (even though they could be eligible for VA services). Another 14 million people in 2011 were active duty, retired military, or family members. The DoD and the VA spent $104 billion providing health insurance for these 14 million, which was over 10% of all federal health spending (the rest of the federal expenses were mostly Medicare & Medicaid).. The cost of the DoD and VA programs has grown by 7.9% annual inflation over the last decade, which is about the same inflation rate as all federal healthcare expenses.
DoD and the VA have become one of America’s larger healthcare companies, and their actuaries know that this math is not sustainable. The military’s accountants are trying to figure out how to pay for the next war, not the last one, and $104 billion will solve quite a few logistics problems. Unfortunately during budget negotiations it’s all too easy to forget the debt that the nation owes to its veterans. If the ACA can hold down costs or even improve the DoD and VA healthcare programs then the legislation is directly helping veterans.
The first question is usually whether anyone in the military has to do anything to comply with the ACA. Part of the legislation requires everyone (and their family members) to have “minimum essential healthcare coverage” or else they’ll pay penalties on their tax returns.
The good news is that anyone who’s eligible for any military health insurance is already complying with the ACA. When Congress passed the ACA legislation, Tricare was specifically exempted from its requirements. Tricare health insurance programs, VA insurance programs (like CHAMPVA), and VA healthcare all qualify as minimum essential healthcare coverage.
This means that uninsured military veterans may be able to avoid the ACA’s penalties by signing up with the VA for a determination of their healthcare benefits. Every military veteran should check in with their local VA center whether they intend to use the clinic or not (it’s how the VA branch clinics qualify for their share of federal funding) but now it might actually have a personal payoff. The VA’s ACA website also discusses other options for uninsured family members who might not be eligible for the VA’s services.
If you’re a military veteran then here’s another reason to visit your local VA clinic: as the defense budget shrinks and the ACA is implemented, the VA may actually try to restrict its benefits. If you sign up now then you’re in the system (at a minimum) and may be eligible later for more benefits. If you want until “later” you may be locked out by program changes. Even after you sign up with the VA you’re still free to purchase your own health insurance or to make other arrangements.
There’s one last reason for a veteran to have the VA do an eligibility determination. If you’re eligible for any level of VA care, whether it’s high-priority or low-priority, you’re no longer eligible for ACA exchange subsidies. You can still buy insurance from the exchange (like a supplemental policy) but you’d pay the exchange price without a subsidy. The problem is that a veteran with a VA low-priority rating may not be able to get an appointment at the VA clinic and would have to use their exchange health insurance. If there’s any consolation, it’s that a veteran with an income level that results in a low-priority VA classification may also mean that the veteran’s income would be too high for an exchange subsidy.
Veterans with family members (who are not eligible for VA care) would be able to buy their own exchange policy and would get a subsidy if their income levels met the requirements.
Two other groups of military people are already benefiting from the ACA: young adults and the elderly. Tricare Young Adult was specifically created by Congress in 2011 to ensure that Tricare offers the same provisions as the new ACA programs: health insurance for young adults (up to age 26). Now when military family members “age out” of Tricare (21 years old, or 23 years if a full-time student) they can apply for TYA. The program is not subsidized by DoD so the premiums are expensive, but there are few alternatives for young adults still in school or facing prolonged unemployment.
Elderly will benefit from the ACA’s emphasis on providing more outpatient care (outside of hospitals and skilled nursing facilities), and the VA is already jumping on this trend. The VA treats over six million patients per year, and more than half of them are older than age 65. (Nearly a third are over age 75.) Institutional care is horrifically expensive, but new medtech devices (touch-screen tablets and wireless medical devices) are finally ready for prime time. If an elder is dealing with cardiac issues, the simple acts of monitoring blood pressure and weight used to require visiting a clinic several times per week. Now families can accomplish the same standard of care at home with a wireless blood pressure cuff, a WiFi weight scale, and a tablet linked to a website run by the doctor’s office. That’s just one aspect of the VA’s “Program at Home” healthcare video showing their efforts to provide more outpatient care to the elderly.
Whose elderly? Well, this might apply to your elders. If you have a parent or other elder family member who served, they may have been eligible for some VA benefits all along. That’s even more likely if they were exposed to hazardous substances like nuclear testing programs or Agent Orange or Gulf War Syndrome. As the delayed symptoms of those exposures begin to emerge, they may be eligible for many more VA benefits than they realize.
I’m starting to see it among neighbors & friends. I had a conversation last week with a Vietnam veteran in his 70s who’s now struggling with congestive heart failure. He’s had open-heart surgery and several stents, but he’s a tough guy. It never occurred to him that his cardiac issues might have been caused by Agent Orange, but his cardiologist made the connection and now a whole world of VA benefits has opened up to him– including home care that would formerly have required many visits to the doctor’s office.
If you’re not already covered by a military insurance program or you’re curious about how the state health insurance exchanges will work, take a look at this CMS video on “Understanding the Health Insurance Marketplace”. CMS is the Health & Human Services agency that supervises Medicare and Medicaid, and they’ll also supervise the federal side of the insurance exchanges.
The penalties of the Affordable Care Act do not apply to servicemembers, retirees, and their families. They do not apply to veterans who qualify for VA benefits. However the ACA is already improving military healthcare benefits, and it may relieve DoD and the VA of the financial burden of healthcare inflation.
VA ACA website
VA ACA Frequently Asked Questions
“Tricare Young Adult Begins” (Tom Philpott column on Military.com)
VA video on “Program at Home”: family alternatives to long-term institutional elder care
CMS video on “Understanding the Health Insurance Marketplace”
VA PDF “WHat you should know about VA health care and the ACA”
VA PDF ACA Frequently Asked Questions
Academy Health “The Future of Health Care for Military Personnel and Veterans”
VA Affordable Care Act overview (downloads a 17-slide PowerPoint brief)
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I retired in 2002 after 20 years in the Navy's submarine force. I wrote "The Military Guide to Financial Independence and Retirement" to share the stories of over 50 other financially independent servicemembers and veterans.