What Disabled Veterans Should Know About Medicare

CCK Law: Our Vital Role in Veterans Law

Veterans can receive VA disability compensation and Medicare at the same time, and enrolling in one has no effect on the other. Enrolling in Medicare does not reduce a veteran’s VA disability rating, lower their monthly compensation, or affect their eligibility for VA health care. The programs operate independently, and in many cases, having both gives veterans more flexibility and better coverage than either program provides alone.

Here is what you need to know about how VA disability and Medicare work together, as well as the common mistakes that can cost veterans access to care they may be eligible for.

Key points of this article include:

• Medicare has no impact on your VA disability rating or monthly compensation.
• VA health care and Medicare are separate systems that can be used at the same time.
• Veterans rated 50 percent or higher fall into VA Priority Group 1 and owe no VA copays, but Medicare still covers care that VA cannot.
• Delaying Medicare enrollment can result in permanent financial penalties that VA health care does not protect you from.

Does Medicare Impact VA Disability Compensation?

No, being enrolled in Medicare should have no effect on a veteran’s VA disability compensation. VA disability compensation is not means tested, and VA does not reduce it because a veteran gains other health coverage.

“Medicare enrollment does not affect your VA disability rating, your repayment amount, or your eligibility,” says Bradley Hennings, partner at CCK Law. “There is no offset, no reduction, and no reporting requirement just because you sign up for Medicare. In plain terms, Medicare has no impact on your VA disability compensation.”

Want to learn more about how VA disability interacts with Medicare? Watch CCK Law Partner Bradley Hennings discuss the details:

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How Does Medicare Work for Veterans?

Medicare is the federal health insurance program for people 65 and older and for some younger people with disabilities. Veterans younger than 65 may qualify after 24 months of Social Security Disability Insurance (SSDI) benefits. A VA disability rating does not by itself create Medicare eligibility. This is because the Social Security Administration (SSA) applies a different disability standard than VA does.

Medicare has four parts:

Veterans with higher incomes pay more for Part B and Part D through the income-related monthly adjustment amount (IRMAA).

Can Veterans Use Both VA Health Care and Medicare?

“VA healthcare and Medicare are separate systems, but they can be used concurrently,” says Bradley Hennings. “That means you can use VA healthcare for some treatment and Medicare for other treatment. You don’t have to choose one or the other.”

The split follows where care is delivered, not what condition is treated. The table below shows who generally pays.

For example, it is fairly common for veterans to rely on their VA health care for medical needs such as service-connected care and prescription medication. On the other hand, these same veterans may decide to use Medicare to pay for emergency care, appointments with specialists closer to home, or visits with medical providers outside of the VA network.

Who Pays for Emergency Care at a Non-VA Hospital?

Many veterans are surprised to learn that VA may reimburse emergency treatment at a non-VA facility under two statutes:

• 38 USC § 1728 — This applies to emergency treatment for a service-connected condition.
• 38 USC § 1725 — This applies to emergency treatment for a nonservice-connected condition.

The second pathway carries a limit that Medicare does not remove. Under 38 CFR § 17.1002(f), VA may only reimburse a veteran if their other coverage would not fully extinguish the bill. After Staab v. McDonald, 28 Vet. App. 50 (2016), partial payment by another insurer no longer bars reimbursement.

However, 38 CFR § 17.1005(a)(5) provides that VA will not reimburse a veteran for any copayment, deductible, or other payment the veteran owes under a health plan contract.

Put plainly, this means that Medicare pays its fair share, VA may pay part of the remaining amount, and the veteran can still owe the Medicare deductible and coinsurance. Enrolling in Medicare remains the right call for most veterans. It simply does not make emergency care outside VA free of cost.

What Is a Common Misconception About VA Disability and Medicare?

One prominent misconception veterans often have about VA and Medicare is that by having one, the veteran no longer needs the other:

“I Have Medicare Now, So VA Health Care No Longer Matters”

This is not necessarily true. VA disability compensation and health care services continue even if a veteran is enrolled in Medicare. Additionally, VA health care often offers benefits that Medicare does not cover, including lower prescription costs and specialized care for service-connected conditions.

What About Veterans With 100% VA Disability and Medicare?

Veterans with a 100 percent VA disability rating are placed in VA Priority Group 1. Veterans in Priority Group 1 pay no VA copays for inpatient care, outpatient care, or medications.

Veterans rated at 100 percent also have access to a range of additional benefits, including VA dental care, VA life insurance through the VALife program, and state-specific benefits such as property tax exemptions.

Even so, Medicare can still be valuable for veterans with a 100 percent rating because:

• VA health care primarily covers conditions at VA facilities. Medicare provides coverage at civilian hospitals and providers outside the VA system.
• Emergency situations may require care at a non-VA facility. Medicare can cover a share of that treatment, although VA reimbursement rules still limit what VA will pay on top of it.
• Medicare eligibility does not depend on VA enrollment, so it continues if a veteran’s priority group changes.

Interested in learning more about VA benefits available to older veterans? Watch CCK Law Supervising Attorney Alyse Phillips discuss VA pension, housebound payments, and more:

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Should Veterans Delay Enrolling in Medicare?

No, veterans approaching age 65 should typically not delay enrolling in Medicare, as this could lead to higher premiums down the line.

One of the most important reasons for this is that VA health care does not count as creditable coverage for purposes of avoiding the Medicare Part B late enrollment penalty. If a veteran skips Part B when first eligible because they have VA coverage, but later decides to enroll, they may end up facing a permanent penalty.

The Part B late enrollment penalty is 10 percent of the standard premium for every 12-month period the veteran was eligible but did not enroll, per 42 USC § 1395r(b). That penalty lasts for life. For example, if a veteran delayed Part B enrollment by two full years, their monthly premium could wind up permanently 20 percent higher than the standard rate.

There is a narrow exception. A veteran who is still working and covered by a group health plan through current employment may qualify for a Special Enrollment Period and delay Part B without a late penalty. On its own, VA health care does not create that Special Enrollment Period. This distinction matters in regards to veterans who turn 65 while they are still employed.

Another important exception to this rule involves Medicare Part D. VA health care does count as creditable coverage for Part D (prescription drugs). Veterans with VA drug coverage can delay Part D enrollment without penalty, as long as they enroll within 63 days of losing VA health care or other creditable drug coverage.

Under 42 CFR § 423.46, the Part D penalty attaches only after a continuous gap of 63 days or longer with no creditable coverage, and the Centers for Medicare & Medicaid Services (CMS) lists VA drug coverage as creditable.

What Veterans Should Do Around Age 65:

1. Mark the Initial Enrollment Period — Seven months, starting three months before the month of the veteran’s 65th birthday.
2. Enroll in Part A. This carries no premium for most veterans.
3. Enroll in Part B unless covered by a group health plan through current employment.
4. Keep VA drug coverage and delay Part D, but track the 63-day rule if VA coverage ends.

Do You Need More Assistance?

Frequently Asked Questions

Does enrolling in Medicare affect my VA disability rating?

No. Medicare enrollment has no effect on your VA disability rating, your monthly compensation amount, or your eligibility for VA health care.

Does VA bill Medicare?

No. VA does not bill Medicare for care provided at VA facilities. Medicare does not pay for care received directly through VA. However, if VA pre-authorizes care at a non-VA facility, Medicare may cover additional services provided during that visit that VA does not authorize.

Can veterans under 65 get Medicare?

Yes, veterans under 65 may qualify for Medicare if they have received SSDI benefits for at least 24 months. This is separate from a veteran’s VA disability rating; the Social Security Administration evaluates disability differently than VA does.

Does a VA disability rating affect other federal benefits?

A VA disability rating can sometimes support eligibility or access to other programs:

• SSDI — Veterans rated at 100 percent permanent and total may receive expedited SSDI processing, which can accelerate Medicare eligibility.
• CHAMPVA — Eligible dependents and survivors of veterans with a 100 percent P&T rating may qualify for CHAMPVA, VA’s health care program for families. Veterans and dependents with CHAMPVA must maintain Medicare Part A and Part B to keep their CHAMPVA benefits if they are Medicare-eligible.
• TDIU — Veterans who are unable to maintain substantially gainful employment due to service-connected disabilities may qualify for Total Disability based on Individual Unemployability (TDIU), which compensates veterans at the 100 percent rate even if their combined rating is below 100 percent. TDIU can also affect SSDI eligibility.

Can I use a Medicare Advantage plan with VA health care?

Yes, but a Medicare Advantage plan will not pay for care provided at a VA facility. Before enrolling, a veteran who relies mainly on VA care should compare what the plan actually adds.

Does VA disability compensation raise my Medicare premiums?

No, VA disability compensation is not taxable, so it should not count toward the modified adjusted gross income used to calculate IRMAA surcharges.

What happens if I drop Medicare Part B after enrolling?

If you drop Medicare Part B, coverage generally cannot be restored until the General Enrollment Period, which runs from January 1 through March 31, and a late enrollment penalty may apply upon re-enrollment.