Is Tricare Standard good enough?

A reader asks:

I did five years of active duty and over 15 years in the Reserves. I just turned 60 years old and am now getting a military pension.

My question is regarding Tricare. I just retired from my civilian employer and they do not offer any health insurance. I plan on using Tricare Standard for my only health insurance. Is Tricare Standard good health insurance? Do I need to buy supplemental health insurance?

Thank you for your help. I enjoyed your recent comments in the Wall Street Journal.

Glad you liked the article! I enjoyed doing that WSJ interview— Liz Moyer is a pro.

Most military retirees prefer to use Tricare Prime because it’s cheap ($23-$45/month + a $12 copay), but one of the contract requirements is being within 40 miles (30 minutes) of a military treatment facility.

Tricare Standard is available anywhere in the U.S., but you’re responsible for 20% of the bill and there’s a $150-$300 annual deductible.

Tricare Standard essentially lays ~20% of the healthcare risks on your shoulders. If you’re not dealing with a chronic condition and you stay healthy (and accident-free), then you’ll come out ahead. You can buy supplemental insurance to cover your share of the Tricare Standard fees, but then again you’ll be paying a monthly fee to avoid the risk of your share of the costs. You may come out ahead or you may lose money.

With Tricare Prime, you choose a “primary care manager” who’s in charge of all your care needs. You see them for the first step in everything, and if necessary they obtain Tricare’s permission for referrals to specialists. Tricare’s PCM also handles all of the paperwork.

With Tricare Standard, you use any doctor you want, and then you figure out between you who’s doing the billing paperwork. Both systems are “good enough”, but they both use different rulebooks for the paperwork and the payment.

There’s also the “hassle factor” to consider. I manage my father’s finances and I see far too many payment hassles with medical billers and his Medicare supplemental insurance company. You may prefer to use Tricare Prime to eliminate the same hassle. If you use Standard and a supplemental insurance policy, be sure to talk to other customers to see how they feel about the claims reimbursement process.

When our daughter was living with us, Tricare Prime was a clear financial win. Now that she’s an adult with her own health insurance my spouse and I could easily save $548/year by shifting from Prime to Standard. However, the savings would not change our lifestyle, and we’d shoulder the extra hassle of medical billing. I tend to injure myself, and I’d feel stupid if I canceled my Prime policy and then gouged myself on a power tool. I’m also happy to pay $548/year to Tricare Prime to eliminate my paperwork.

In your situation, I’d choose Tricare Prime (if it’s available). If Prime is not in your ZIP code (even after a waiver request) then I’d choose Tricare Standard. If I had health issues or if I indulged in risky activities like rock climbing then I’d also buy a supplemental policy to cover my share of the Tricare Standard expenses.

Keep in mind that whatever you decide to do, the rule will only stay in effect for five years. When you turn age 65, you’ll go on Medicare and Tricare For Life. Medicare becomes your primary health insurance while TFL becomes your supplemental insurance policy as well as your prescription medication policy. There is no fee for TFL.

When you make your decision and choose your insurance, please let us know how it went and what advice you’d share!

Readers, do you use Tricare Standard with a supplemental health insurance policy? Has it been good or bad?

Related articles:
40 miles for Tricare Prime — or maybe Tricare Standard
Medicare, Tricare For Life, Medigap insurance, and Congress
Military Reserve Retirement, Tricare, and Medicare
Book review: The Complete Idiot’s Guide to Social Security and Medicare
How I cost my Dad over $2000 in Medicare benefits

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.

  1. TRICARE Prime here – live near a military medical facility, however, have had to use local ERs lately and co-pay has been very low – also for referrals, there is a co-pay, but again it is low. So far, so good, although if we moved, I would probably go the Standard with the MOAA supplement route as you’ve described.

  2. Thanks, Bill, I’m glad that’s working– and that you don’t have to do the paperwork!

  3. I have been using Tricare Standard since I retired twenty years ago. I also purchase the MOAA supplemental insurance to cover any major costs. It has worked out well as we have moved and gone to different doctors over time. Our current doctor does the billing to both with no major issues. We like Standard because we can go to any doctor without needing a referral from anyone. Like you stated in your article, we do check to see if a new office accepts Tricare Standard before we schedule an appointment. It might be a result of all the retirees in Florida.

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