Tricare, vehicle insurance, and uninsured/underinsured motorists

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I’ve enjoyed military retirement for over 10 years, and in that time I’ve been lucky enough to be mostly ignorant of my Tricare Prime benefits. I found a good civilian clinic for my primary care manager (just a couple of miles from our house), and I’ve only visited once or twice a year for the usual respiratory infections or knee injuries or immunizations. No complaints.

I’d always assumed that Tricare would cover your medical insurance. I knew from shipmates’ stories that if you woke up with appendicitis, Tricare would cover the operation and recovery. I knew that if you fell off a ladder and fractured a bone, Tricare would cover the ambulance ride and the surgery and the physical therapy.

But I haven’t had a fender-bender for over three decades. I recently learned that if you’re injured in a vehicle accident then Tricare coverage isn’t so simple anymore.

I started to learn this when a neighbor’s car was rear-ended during her commute. (The other driver was at fault.) She seemed all right, but she was shaken up so the EMTs took her to the hospital for more tests. She said and did all the right things, so there were no legal issues. She took painkillers for a couple of days and had several physical therapy sessions. (She’s fine now, and her car has been fixed too. No problems.) I helped her fill out the insurance claims paperwork for her car, and USAA wanted to know about doctors and emergency rooms and physical therapy.

As expected, during the week after her accident the medical bills started rolling in. She let everyone know that she had insurance with USAA and Tricare, and the billing agents were happy.

Much to my surprise, the following week she received a letter from Tricare telling her that they would not pay her medical expenses. She didn’t understand why, and I didn’t either.

So I finally did something that strikes fear & trembling into the hearts of all U.S. military veterans and their spouses: I called the Tricare “customer service” line at TriWest. It actually went a lot better than I expected. I didn’t even spend any time on hold, which seems most unusual. I decided to go for the worst-case situation, so I asked them: if I was disabled in a vehicle accident caused by the other driver’s fault, and I carried only the minimum state-required insurance, and the other driver had no insurance, would Tricare still cover me? What about my family? What about lifetime care if I was an invalid?

The woman in the Benefits section kept breaking into my questions to make comforting noises and to reassure me that Tricare would take care of me. I guess that’s part of her job, but the only problem was that she couldn’t answer the question. She kept telling me (in between reassurances) that it would be an insurance issue. She kept telling me that the other driver was required by law to have insurance. I kept trying to clarify that the question assumed the other driver had no insurance. She kept telling me that I should really have more insurance to protect myself. Then she told me I should have long-term care insurance too. This was not comforting.

She politely decided to get rid of me by passing me to Claims. (I supported that.) The Claims branch was all over it. The representative understood my questions but answered them in her own way. She told me that for vehicle accidents, Tricare is not first-party coverage. The vehicle insurance companies would sort out their claims first (if both sides had auto insurance). Then the state would step in with personal injury coverage (whatever limit was on the policy). If the other driver didn’t have insurance then I could be protected by Uninsured Motorist/Underinsured Motorist coverage. Whether or not I had UM/UIM insurance, my auto insurance company would pursue the at-fault driver for whatever they could get.

Finally, if I was confronting disability, Tricare would see if I qualified for Medicare benefits. If so then Medicare would step in and Tricare would be second payer under Tricare For Life. If nobody else was required to pay anything further for my medical care, then Tricare would step up as the payer of last resort. They’d only pay for medical issues, and frankly it seemed like a fuzzy line between medical expenses and long-term care expenses. Bottom line, however, was that Tricare would pay for any remaining medical expenses– but only after everyone else had finished paying their part. Underpayment for injury claims has been a problem in some parts of the insurance industry, so I was glad to learn that Tricare would backstop us.

Keep in mind that I might have other expenses. If I was still working and wanted to replace my employment income, then I’d need disability insurance. The Veteran’s Administration might cover some of my disability or long-term care expenses, or I’d have to pay out of my pension & savings. (I’m still relatively ignorant of VA coverage.) If I needed long-term care for my activities of daily living, then I’d need long-term care insurance.

If a family member was injured in the accident, then the same process would be followed– as long as that family member was also covered under Tricare. My vehicle insurance company would pay for any of my passengers– up to our policy limits.

Everything worked out fine for our neighbor. USAA is very good at member service and she hasn’t had to worry about any of the medical bills. But this incident made me take a look at our own insurance coverage.

Triwest’s answers raised an interesting question for the Ohana Nords insurance plan. Nearly two decades ago, when our college student was a toddler, we bought a huge amount of UM/UIM insurance coverage. The idea was that it would cover her expenses if she was disabled in a vehicle accident and needed lifetime care. However last month she bought her own car and she insured it under her own name. She was no longer on our USAA policy, so hypothetically we no longer needed to carry UM/UIM insurance. This “hypothetical” question is costing us over $220/year. (We may be financially independent, but researching these questions is how we got there.) So I called USAA.

Of course I’m a little cynical about asking an insurance company if I need more insurance. I ended up speaking to one of USAA’s experts who understands both the financial-planning issues and insurance-coverage issues. One of USAA’s challenges at answering this question is that the laws vary by state, and each member’s specific insurance policy may have different types of coverage. It’s not easy to just spit out a blanket answer like “You should have lots of UM/UIM insurance, thanks for calling!”

At the national level, he said that USAA has no problems working with Tricare. He said that UM/UIM coverage is set up for vehicle passengers (guests who might not have Tricare) as well as for drivers and family members. He agreed that in Hawaii, if my spouse and I did not have UM/UIM insurance, then after USAA and the state were finished, any remaining medical expenses would be covered by Tricare. We’d still be on the hook for the non-medical aspects of long-term care, and we still might need long-term care insurance, but Tricare (and Medicare if necessary) would cover our medical needs.

Not only was that good news, but it also matched what we learned from TriWest.

In the end, we decided to keep forking out the $220/year for a couple more years. NROTC has kept our young adult pretty busy with summer school and Navy training, and now she’s living off campus in her own year-round apartment, but she’s still staying with us in Hawaii for 4-6 weeks/year. Although she has her own vehicle insurance policy with USAA, they still consider her a “guest driver” of our car. She won’t have her own medical insurance until she’s commissioned and on active duty, and she’ll only have Tricare coverage from us until she turns 23 years old. If she’s a driver or passenger in our car, UM/UIM coverage still gives us the peace of mind today that we sought when she was a toddler.

Otherwise, our driving habits are minimal– my spouse and I are retired on an island that’s only 30×40 miles, with no other family, and we don’t drive very much. We rarely have passengers in our car, either, and the occasional passenger that we do carry is usually an adult with their own insurance. When our daughter has her own active-duty Tricare insurance and she’s off our policy, then we’ll cancel our USAA UM/UIM coverage.

Keep in mind that every state has different laws, and your family situation might be different from ours. However I finally have a better understanding of Tricare’s coverage and the benefits of UM/UIM insurance. I hope this information helps you decide how to optimize your insurance coverage too!

 

Related articles:
Buying a used car on a cash advance in a new town
USAA starts an online service to sell your car
Joining NFCU, PenFed, and USAA (part 2 of 2)

 

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WHAT I DO: I help you reach financial independence. For free. 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, veterans, and families. All of my writing revenue is donated to military-friendly charities.

11 Comments
  1. Reply
    Tabitha May 5, 2015 at 1:44 PM

    Can I claim my sister in law as a dependent to get her on my tricare? she is bi polar/manic depressant and in Florida she cant get medicaid unless she is disabled? I am 100% disabled and retired and I pay for everything. I had to go and pick her up from NC and she tried to commit suicide and had her in a 72 hr hold mental facility and it provided her with med but she still has episode. She needs help but I cant afford a place to register her in that will keep her longer.

    • Reply
      Doug Nordman May 6, 2015 at 10:09 AM

      Tabitha, you’ll need to discuss this one with DEERS. Since your sister-in-law is not considered immediate family, they might not deem her eligible to be your dependent. Even if she’s considered your dependent by tax law, she still might not be eligible for Tricare benefits.

      As you probably already know, the IRS allows you to declare someone a dependent on your tax return if you’re paying for at least half of their upkeep. (They’re dependent on you.) For DEERS to consider your SIL your dependent, though, you might have to be her guardian or even adopt her. The best way to parse those requirements would be to visit the personnel office on a military base near you, or contact DEERS directly through the Defense Manpower Data Center at https://www.dmdc.osd.mil/milconnect/faces/faqs

      A better solution might be your state’s Medicaid office or community mental health facility. If your SIL does not have her own health insurance and doesn’t have the income to support herself then she might be able to obtain health insurance (and treatment) via that system. The mental health facility might figure out a way for her to obtain benefits through the state. But again this is not an easy answer.

      • Reply
        Tabitha May 6, 2015 at 3:05 PM

        thank you

  2. Reply
    Insurance for a young adult December 26, 2013 at 5:01 AM

    […] articles: Lessons learned on insurance Tricare, vehicle insurance, and uninsured/underinsured motorists Pricing insurance and investments The finances of used […]

  3. Reply
    Mel M. June 8, 2013 at 10:06 AM

    Nords,
    Another useful post…I’ve been trying to catch up with your posts by going thru the “post titles by month” until I peruse them all…and comment on those posts that I find intriguing, useful (not to imply that not all of them are useful), and feel compelled to post a reply.

    I have much to learn about Tricare as, most active duty folks, specially those with no dependents, do not really look under the Tricare’s hood to see what’s in there. Only now that I am nearing retirement that I am investing some time learning more about Tricare and other health and dental insurance coverages. I hadn’t given much thought to medical coverage stemming from vehicle accidents and the information you’ve provided makes sense. I would be better equipped to handle this issue, if (I hope not when) it comes up.

    Thanks.

    • Reply
      Doug Nordman June 9, 2013 at 6:03 AM

      Thanks for reading through everything, Mel, I appreciate the review! Let me know if anything’s out of date– or just flat incorrect.

      I think the most important factor is choosing a doctor near your home, especially if they’ll call you when they have last-minute cancellations. It’s no fun sitting around the military clinic when you’re a retiree, and when the doctor is close to your home then you don’t have to deal with a long drive.

      The other important factor is remembering to go through your primary care manager for everything, especially referrals. Some of it can be handled after the fact but Tricare Prime is designed to use the PCM for everything. Another good reason to use a civilian doctor instead of an overburdened military treatment facility.

      When you’re a retiree, medications can incur a small copayment. They may still be free of charge through the MTF (or through Tricare’s mail-order pharmacy for maintenance meds), or you may pay a few bucks at a civilian drugstore. Again, when you’re feeling crappy and just want to get back home, it’s sometimes much more convenient to use a local drugstore (and pay the copay) rather than sit outside a MTF’s prescription window for an hour.

  4. […] started a family, and once again life got complicated. This time we maxed out our SGLI policies and added an uninsured/underinsured motorist rider to our auto policies. The idea was that if our daughter was disabled by a car accident and needed lifetime care, […]

  5. Reply
    Herrah June 24, 2012 at 8:04 AM

    Okay, here’s an added question, thinking about your last comment about not driving much. Even when you don’t drive, you are still in danger of other drivers. My sister-in-law was walking in a parking lot and was hit by a car a few years ago. It was a huge mess, required knee surgery, and since she was pregnant at the time, there was a fear of losing the baby (she didn’t). How would Tricare approach that situation?

    Oh, and thanks for highlighting this. This is not something I would have ever thought about. We’re stationed overseas atm, but will be moving back this summer. I’m going to have to take a serious look at our car insurance when I set it up.

    • Reply
      Doug Nordman June 25, 2012 at 5:53 AM

      Thanks for your question, Herrah!

      The answer is that Tricare would be the last payer. (Of course your sister-in-law would have to be eligible for Tricare insurance in the first place, either from her own service eligibility or from her Tricare sponsor.) The driver was at fault and would have to pay from their insurance. If (for some reason) the driver didn’t have insurance (or wasn’t identified) then Tricare would pay the medical bills. (Tricare would also attempt to recover damages from the driver.) Depending on the type of Tricare used by your sister-in-law, she’d be responsible for some copayments. The copays would probably be capped at $3000/year.

      Your insurance review is a very good idea. We do it annually by trying to decide what’s changed in our lives (transferred to the Reserves, retired from active duty, launched a kid from the nest, have a higher net worth) and then we discuss it with the insurance company.

      If your vehicle insurance is with USAA then I highly recommend using their website insurance calculator to see the effects of your changes. You can tinker with different types of coverage and different limits to immediately see the quote on the screen. If you’re not with USAA then you could e-mail or fax them a copy of your policy. They’ll figure out your membership eligibility, set you up with a website account, and then walk you through a detailed comparison quote.

  6. Reply
    Janette June 20, 2012 at 5:57 PM

    Thanks for the heads up. This information is even more important to those of us who are retired, but using our spouse’s coverage.
    One other tid bit about TriCare. If you had/have a job with insurance, and then leave that job, make sure TriCare takes it off the records. I left my job- that provided insurance- about eight years ago. Every time I use the hospital (our #1 reason to move to Kansas was the military hospital), I get a bill. They say that “my insurance” is the first payer. Then I go through the process of submitting, AGAIN, that I no longer have outside insurance.

    • Reply
      Doug Nordman June 21, 2012 at 3:51 AM

      Thanks, Jan, unbelievable. You know that if you needed to enter that onto your record, it’d keep getting lost…

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