My 23-year-old son was dropped from the Tricare health insurance program when he graduated from college. I understand the rules have changed regarding coverage for young adults. Can he get back on my policy?
Although the new health care law required most insurers to offer coverage for adult children up to age 26 on their parents’ policies starting last January, Tricare (the health care program for members of the military and their families) did not offer this coverage extension until recently. But now you can sign up to cover your adult children up to age 26.
Young adults like your son don’t need to be dependents for tax purposes and don’t need to live with their parents. But they do need to be registered with the family in DEERS (the Defense Enrollment Eligibility Reporting System). Plus, they can neither be married nor eligible to enroll in a health insurance plan through their employer (even if they choose not to take their employer’s coverage). If they lose their job and are eligible for extended group coverage under COBRA, however, they can choose to take Tricare coverage instead.
The monthly premium for the Tricare Young Adult program is $186 per month in 2011.
Coverage includes the same medical and pharmacy benefits as Tricare, but co-payments are based on the sponsor’s (parent’s) military status. If your son is eligible, you can sign him up at any time – you don’t need to wait for a life-changing event or open-enrollment period. Some young adults who had large medical expenses over the past year and didn’t have insurance to cover them qualify for retroactive coverage. But you must sign up immediately — by September 30, 2011 — pay the $186 monthly premium for the full nine months from January 2011 to September 2011, and submit receipts for the uninsured medical expenses. So if your child didn’t have insurance for the first part of the year and had medical expenses topping $1,700, this move could pay off.
When deciding whether to buy Tricare Young Adult coverage, your son should compare the cost to the price of buying coverage on his own. In many states, healthy people younger than 26 can buy their own coverage for about $100 a month or less, but they may have a higher deductible and larger co-payments (get price quotes for individual health insurance at eHealthInsurance.com). But if your child has health issues, or he wants more-comprehensive coverage and plans to use in-network providers, the Tricare benefits may be the best bet.
Kimberly Lankford is a contributing editor to Kiplinger’s Personal Finance magazine and the author of Ask Kim for Money Smart Solutions (Kaplan, $18.95). Send your questions and comments to moneypower@kiplinger.com. And for more on this and similar money topics, visit www.Kiplinger.com.
Top GOP senator open to changes in military health
The top Republican on the Senate Armed Services Committee is recommending that a special committee searching for ways to slash the deficit consider some of President Barack Obama’s proposed changes to health and retirement benefits for the military.
In a letter to the bipartisan panel, Arizona Sen. John McCain signaled he was open to cost-saving steps in military benefits, a move certain to send shock waves through Congress and among powerful groups of retired officers and veterans resistant to change.
The Pentagon’s health care costs have skyrocketed from $19 billion in 2001 to $53 billion, but lawmakers and various groups argue that members of the military and their families sacrifice far more than the average American, with a career that includes long and dangerous deployments overseas that overshadow civilian work. Health and retirement benefits help attract service members to the all-volunteer force. McCain said he would support establishing an annual enrollment fee for Tricare for Life, the health care program that has no fee for participation. Obama had proposed an initial annual fee of $200.
“This proposal would be the first such change since Congress established this program in 2001, a period during which national health care costs have risen significantly,” the senator wrote.
McCain also urged the so-called supercommittee to consider restricting working-age military retirees and their dependents from enrolling in Tricare Prime, which has the lowest out-of-pocket expenses. The retirees could still enroll in other Tricare programs. McCain pointed out that the Congressional Budget Office has estimated that such a move would save $111 billion over 10 years.
Active-duty personnel still would be enrolled in the program automatically.
The Associated Press
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