We meet a lot of folks in our business needing different types of insurance coverage, from Medicare plans to life insurance. Sometimes these folks are veterans and their spouses end up having what is called CHAMPVA coverage.
While you may have heard of TRICARE, which is for active-duty and retired members of the uniformed services, CHAMPVA differs in that it is a Department of Veterans Affairs program for the spouse or widow(er) and to the children of a veteran whom fits in the following categories:
Is rated permanently and totally disabled due to a service-connected disability
Was rated permanently and totally disabled due to a service-connected condition at the time of death
Died of a service a service-connected disability
Died on active duty and the dependents are not otherwise eligible for Department of Defense TRICARE benefits
So what does CHAMPVA cover anyway? Well, the allowable amount (what CHAMPVA pays for specific services and supplies) is equivalent to Medicare/TRICARE rates. CHAMPVA has an outpatient deductible of $50 per beneficiary, per calendar year or a maximum of $100 per family, per calendar year. The patient’s cost is 25% of the allowable amount up to a catastrophic cap of $3,000 per calendar year. If you have CHAMPVA, it is imperative for you to ensure a provider will accept assignment, and agrees to accept the allowable amount as payment in full. One important note is that a provider cannot bill you for the difference between the allowable amount and their normally billed amount.
So what if someone has CHAMPVA coverage and other health insurance (OHI)? Well by law, CHAMPVA is always the secondary payer except to Medicaid (state coverage), State Victims of Crime Compensation Programs, Indian Health Services and supplemental CHAMPVA policies.
One type of other health insurance (OHI) is Medicare and if someone turned 65 on or after June 5, 2001, that beneficiary must be enrolled in both Medicare Parts A&B to be eligible for CHAMPVA. An important note to keep in mind is that CHAMPVA will not pay someone’s Part B premium, which can very depending on the income of that individual, but for 2020, most folks will be around $144.60 for the year.
Some folks we meet here in San Antonio, Texas and in other states such as California, and Florida, relay to us that they want a Medicare plan option in addition to CHAMPVA, which is not a problem. Reason? Well let’s take a Medicare Advantage plan for instance. Someone may want the dental benefits provided on a plan, such as $1,000 a year to spend on preventative and comprehensive services or maybe a Silver Sneakers gym membership, that many Medicare Advantage plans offer. On the flip side, someone may want to have a Medicare Supplement plan in place first, ahead of CHAMPVA coverage, as they may have more options when it comes to a provider that otherwise would not accept CHAMPVA, or they want to limit their out-of-pocket costs to a predictable amount (ie. Plan G with a $198 Part B deductible). It really depends on the situation to be honest.
What about Medicare Part D coverage? Well, if you are wondering if someone may be penalized if they do not take Part D coverage when first eligible, the answer is no. Reason? Well, CHAMPVA is considered “creditable” coverage, so even if you are 67 years old but have Part A&B already, you can add a Medicare Part D plan if you’d like and be fine during an applicable enrollment period. But we encourage our customers and clients to consider if it makes sense to do so. With CHAMPVA, the copay will be 25% for medications, this is included as part of your CHAMPVA coverage and the maximum out of pocket under CHAMPVA will be capped at $3,000 per year, lower than other private Part D plans which are $6,350 for 2020. One important distinction here is that CHAMPVA will cover 100% of your medications costs once you reach the $3,000 gap, while any other Part D plan will still leave you with small copays even after reaching the $6,350 gap, not to mention that Medicare Part D plans have a monthly premium.
So the moral of this blog post is that you should see if someone you know might be eligible for CHAMPVA coverage, and if you know someone or are someone who already has it, and will soon be eligible for Medicare Parts A&B, it may be a wise decision to have other health insurance (OHI) besides CHAMPVA, such as a Medicare Advantage plan or a Medicare Supplement plan, to give you more comprehensive coverage when it comes to your healthcare needs. We always say, better to overinsure than underinsure!
For a short recap on the CHAMPVA program, see below from the Veterans Administration (VA):
We hope you found this blog post on CHAMPVA and Medicare coverage helpful, courtesy of The Harrin Group. If we can ever be of assistance to you or anyone in your family, we are here for you! Contact us for a no obligation analysis of your situation today!