How the Tricare Catastrophic Cap Affects Your Health Care Costs

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Lt. Cmdr. Michelle Finley, a nurse practitioner with Naval Branch Health Clinic Mayport’s Medical Home Port Pink Team, checks Abbigail Engle’s heart during a routine exam. (U.S. Navy/Jacob Sippel)
Lt. Cmdr. Michelle Finley, a nurse practitioner with Naval Branch Health Clinic Mayport’s Medical Home Port Pink Team, checks Abbigail Engle’s heart during a routine exam. (U.S. Navy/Jacob Sippel)

Tricare medical coverage is one of the biggest benefits of military service, and one of the greatest things about Tricare is the low catastrophic caps that limit the total amount you'll pay on covered medical care in a year. Sometimes called an out-of-pocket maximum, catastrophic caps vary based upon status, the date the sponsor entered the military and Tricare coverage, but they're all quite low compared to most civilian plans. For 2021, the catastrophic caps range from $1,000 per year to $3,703 per year.

What Are Tricare Group A and Group B?

The first thing to understand about your catastrophic cap is what Tricare group you are in.

You're in Group A if your sponsor's initial enlistment or appointment was before Jan. 1, 2018.

You're in Group B if your sponsor's initial enlistment or appointment was on or after Jan. 1, 2018.

Your Military Status

For purposes of Tricare's catastrophic caps, there are four statuses, and one sub-status.

Active-duty family members have a 2021 catastrophic cap of $1,000 for Group A beneficiaries and $1,058 for Group B beneficiaries.

Military retirees and their family members' catastrophic cap depends on their group and, for Group A, the Tricare plan they use -- see below.

Tricare Reserve Select and their family members always use Group B rates, so their 2021 catastrophic cap is $1,058.

Tricare Retired Reserve and their family members always use Group B rates, so their 2021 catastrophic cap is $3,703 per year.

Tricare Young Adult beneficiaries use the catastrophic cap for their sponsor's status, but always at Group B rates. This causes some confusion because the TYA beneficiary may have a different catastrophic cap than the rest of the family, even though all their costs are contributing to the same cap.

Military Retirees and their Tricare Plan

For retirees, the catastrophic cap is based on group and may vary based on the plan that is selected.

Group B military retirees and their families have a 2021 catastrophic cap of $3,703 per year.

The catastrophic cap for Group A retirees depends on which Tricare plan is being used. This is a new change in 2021. For 2021, Group A retirees and their families using Tricare Prime have a catastrophic cap of $3,000 per year. Group A retirees and their families using Tricare Select have a catastrophic cap of $3,500.

What's Counted Toward Your Catastrophic Cap?

Tricare counts everything except premiums toward your catastrophic cap, including enrollment fees, deductibles, co-payments and pharmacy charges. It's important to note the difference between an enrollment fee and a premium. The monthly cost paid by a retiree and their family for Tricare is an enrollment fee, and that enrollment fee is counted toward the catastrophic cap. The monthly cost paid for Tricare Reserve Select, Tricare Retired Reserve, Tricare Young Adult and the Continued Health Care Benefit Program is a premium, and premiums do not count towards the catastrophic cap.

If, or when, your family reaches your catastrophic cap for the year, you don't have any further responsibility for the cost of the Tricare-allowed portion of any covered care. Tricare picks up all the remaining covered costs.

Understanding your catastrophic cap makes it easier to create a health-care budget. Our family takes our catastrophic cap, divides by 12, and puts aside that amount into an account each month. When we have health-care expenses, the money is available to pay those bills. Understanding your catastrophic caps also helps you compare other health coverage options such as an employer-sponsored policy. It's an important part of your health-care coverage to understand.

Keep Up with Changes to Tricare and Your Other Benefits

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