TRICARE Cost Terms
TRICARE users often get confused about the terms that are used for discussing cost. This can lead to poor decisions about the choice of care. This article will help you get past that confusion.
For the sake of this discussion, we will break costs into three categories:
Monthly fee or premium: The amount you pay each month for you and your family to be enrolled in a plan.
Deductible: How much you must claim in health care expenses each year before TRICARE starts to reimburse your bills.
Catastrophic cap. The most you will pay each year for your family’s care.
This article is a broad overview. To discuss specifics of your family’s situation, visit www.theTRICAREguy.com to find our social media channels, sign up for our newsletter, and purchase our best-selling book, TRICARE Around the World. You can join our community of thousands of TRICARE users in our Facebook groups.
The first concept, and the easiest to understand, is your monthly fee or premium. While we say “monthly”, you can also choose to pay quarterly or annually if you like. Fee or premium is the recurring amount you pay for the privilege of enrolling your family members into a plan.
Fee and Premium are similar concepts, but not identical. Fee-based plans are taxpayer-subsidized, so they are quite affordable. This includes Prime and Select.
Premium-based plans are those which, by law, are not subsidized with tax dollars. This includes TRICARE Young Adult (TYA), TRICARE Retired Reserved (TRR), and TRICARE Reserve Select (TRS). Because they are not taxpayer-subsidized, the monthly premium is much higher than the cost of subsidized plans, making them more comparable to commercial rates.
Active Duty Family Members (ADFM) pay no fee for their Prime or Select coverage. But if they have a child in TYA, they would pay the normal TYA premium.
Deductible is a constant source of confusion among our group members. Although it’s a common term in home or auto coverage, it seems to get confused in the context of health care. For many plans and beneficiaries, your TRICARE benefits don’t start until you have claimed a certain amount of expenses for the year. Once you reach that amount, the benefits of your TRICARE plan kick in. That amount is known as the deductible.
TRICARE Prime has no deductible. This means your benefits start working with the very first dollar spent. This is a big motivator for many people to join Prime. In reality, of the three terms explained here, deductible is financially the least significant. It’s nice to have zero deductible, but don’t get too focused on this one thing.
For those with a deductible, there is both an individual and a family deductible. For instance, Group A retirees on TRICARE Select have an individual deductible of $150 and a family deductible of $300 (as of 2023). This means that once a family member has claimed $150 in medical expenses for the year, their plan benefits start to work. Once two family members have claimed their deductible (for a total of $300), then the benefits of ALL family members will start to work. After the first two, other family members will not have to meet a deductible.
If you are seeing non-network providers, then you must submit a claim to get credit towards your deductible. Your annual deductible will be subtracted from your first reimbursement, but once that’s behind you future claims will be fully honored. It is vitally important to submit that first claim of the year to get your deductible fulfilled!
Some people wrongly believe that the deductible is applied for each & every visit, all year long. They think that the first $150 of EVERY visit is not covered. THIS IS INCORRECT! The deductible is an annual amount, not per-visit. Once you meet the deductible for the year, you will not see it again until the following year.
The final term, and the one with the greatest impact towards protecting you financially, is Catastrophic Cap. This is the maximum amount that your family will have to spend out of pocket in a given year for covered care. It is the sum total of your copayments, fees (not premiums), and deductibles.
The Cap is calculated per-family, not per-person. You add up your out-of-pocket costs all year for the entire family; if that amount ever reaches your cap, then all further allowable expenses are covered 100% by TRICARE, with no more copayments or fees until January 1 of the following year.
Some people wrongly believe that the Catastrophic Cap is the most that TRICARE will pay on your behalf, leading them to believe that their benefits are relatively worthless. This is a complete misunderstanding of what the Cap means. It is not a limit of what TRICARE will pay; it is a limit of what you, as a family, will pay. In 2023, Catastrophic Cap ranges from $1000 for a Group A active duty family, to $4200 on TRICARE Retired Service. For Medicare/TFL, it is $3000.
Your cap is the single most important factor to protect your family from financial stress. While we recognize that $1000-4000 in copayments over the course of a year can be a stretch, most families can deal with this. By contrast, some commercial policies might have caps of $20,000 per year or more, which can be crushing.
Now that you understand these cost-terms, it’s time to look up the specific costs of your plan. Visit our YouTube channel for a demonstration of the TRICARE Cost Tool so you can get a detailed printout of your family’s healthcare costs.