What is Medicare? A complete overview for retired military

Medicare was created by Congress in 1965 as Title XVIII of the Social Security Act to give Americans 65 and older a reliable source of health coverage. It is run by the Centers for Medicare & Medicaid Services (CMS), an agency inside the Department of Health and Human Services, with enrollment handled by the Social Security Administration (SSA).

For retired military, Medicare is not a replacement for the healthcare benefit you earned — it works alongside it. The TRICARE benefit you have today restructures itself the day you become Medicare-eligible. The benefit's name even changes: from TRICARE Prime or TRICARE Select to TRICARE For Life (TFL).

The four parts of Medicare

Medicare is organized into four lettered parts. Each part covers a different category of care.

Parts A and B together are called Original Medicare. It is the government-run, fee-for-service version of Medicare and the foundation everything else builds on.

How Medicare is funded

You and your employers (including the federal government during your service) paid into Medicare through the FICA payroll tax (1.45% from you, 1.45% from your employer) for every year you worked. If you (or your spouse) paid into Medicare for at least 40 quarters — about 10 years — you qualify for premium-free Part A at 65. Part B, by contrast, is funded mostly by enrollee premiums plus general federal revenue.

Medicare vs. Medicaid vs. VA healthcare

These three programs sound similar but are very different:

• Medicare is federal health insurance for people 65+, run by CMS. It is not income-based.
• Medicaid is a joint federal/state program for low-income people of any age. Eligibility is income- and asset-based.
• VA healthcare is run by the Department of Veterans Affairs, a separate agency from CMS. It is a direct-care system for eligible veterans. Medicare cannot be used at VA facilities, and the VA cannot bill Medicare.

You can have all three (Medicare, Medicaid, and VA), but they operate independently and do not coordinate claims with one another.

Why this matters for retired military

When you turn 65, three things happen on roughly the same day:

1. You become eligible for Medicare.
2. Your TRICARE benefit converts to TRICARE For Life — if you have both Medicare A and B.
3. Routine primary care at many Military Treatment Facilities (MTFs) shifts from priority enrollment to space-available. Some MTFs also offer TRICARE Plus, a primary care enrollment program at participating facilities based on local capacity — not every MTF participates.

The TFL Handbook is unambiguous: you must be entitled to Medicare Part A and enrolled in Medicare Part B to be eligible for TFL. If you decline Part B, you lose TFL the same day. There is no exception for retired military.

How Medicare pays — the "primary/secondary" rule

Once you have Medicare and TFL, Medicare is your primary payer for any service covered by both. The provider bills Medicare first; Medicare pays its share (typically 80% of the approved amount for Part B services); then the claim crosses over electronically to Wisconsin Physicians Service (WPS), which administers TFL claims; WPS pays the remaining Medicare cost-share. The result for most retirees at participating providers: $0 out of pocket.

Where to learn more

The single best reference is the Medicare & You Handbook, mailed to every Medicare beneficiary every fall and downloadable any time at Medicare.gov. The TFL-specific complement is the TRICARE For Life Handbook, published annually by the Defense Health Agency.

Continue learning

— suggested by the knowledge graph

Lessons

• Common mistakes retired military make at 65 — and how to avoid themThe most expensive errors retired service members and spouses make during the Medicare and TFL transition, and the simple fixes for each.
• Frequently asked questions about Medicare and TRICARE For LifeA quick-reference summary of the questions retired service members and spouses ask most often — with citations to the official source.
• Prescription drug coverage under TRICARE For LifeWhy TFL beneficiaries use TRICARE Pharmacy (Express Scripts), not Medicare Part D — and how the four pharmacy options compare.

Encyclopedia

• Medicare Part AThe hospital insurance side of Original Medicare — covers inpatient stays, skilled nursing, hospice, and some home health.
• Medicare Part BThe medical insurance side of Original Medicare — covers doctor visits, outpatient care, preventive services, and durable medical equipment.
• Medicare Part C (Medicare Advantage)An optional, all-in-one alternative way to get your Medicare benefits — delivered through a private plan instead of through Original Medicare.
• Medicare Part DMedicare's optional prescription drug coverage — almost always unnecessary if you have TRICARE For Life.
• milConnectThe DoD self-service web portal where retirees verify and update DEERS, view TRICARE coverage, and request ID cards.
• IRMAA (Income-Related Monthly Adjustment Amount)An income-based surcharge added to your Medicare Part B and Part D premiums when your modified adjusted gross income exceeds CMS thresholds.
• Special Enrollment Period (SEP)An enrollment window triggered by qualifying life events — TRICARE and VA care do NOT trigger one.
• TRICARE Pharmacy ProgramThe DoD prescription drug benefit administered by Express Scripts — your drug coverage if you have TFL.
• WPS (TFL Claims Contractor)Wisconsin Physicians Service — the Defense Health Agency contractor that processes TRICARE For Life secondary claims.
• Military Treatment Facility (MTF) & Space-Available CareDoD military hospitals and clinics — at 65, retirees can only be seen if appointments aren't needed by active duty or TRICARE Prime enrollees.

FAQs

• Who is eligible for TRICARE For Life?Retired uniformed service members, eligible spouses and widows/widowers, certain former spouses, and Medal of Honor recipients — all entitled to Medicare Part A and enrolled in Part B, with current DEERS status.
• I'm turning 65. What should I do first?About 3 months before your 65th birthday, sign up for Medicare Parts A and B at SSA.gov. TRICARE For Life activates automatically once both are effective and DEERS is current.
• I'm still working with employer health insurance. How does TFL fit?If your employer has 20+ employees, your employer plan pays first, Medicare second, TFL third. You can delay Part B without penalty until employment ends — but TFL is inactive until you take Part B.
• I have FEHB from federal service. Do I still need Medicare?FEHB doesn't replace Medicare. To keep TFL, you must enroll in Part B. Many federal retirees keep both FEHB and Medicare for layered coverage; others drop FEHB once TFL is active.
• Do I need to cancel TRICARE Prime or Select when I turn 65?No. Prime and Select end automatically when you become Medicare-eligible. You don't have to take any action — and your Prime enrollment fee withholding stops.
• What actually changes the day I turn 65?Your TRICARE Prime/Select ends, Medicare A and B become primary, TRICARE For Life turns on as your secondary, and your MTF access drops to space-available.