Learn About AARP Health Insurance Plan Options

Understanding AARP Health Insurance Plan Types

AARP offers several different types of health insurance plans through partner insurance companies. These plans are specifically designed for people age 50 and older. Each type of plan works differently and covers different amounts of your medical costs.

Medicare Advantage plans, also called Part C plans, combine your Medicare Part A and Part B coverage into one plan. These plans are offered by private insurance companies approved by Medicare. Medicare Advantage plans typically include prescription drug coverage as part of the plan. Many AARP Medicare Advantage plans also offer additional benefits like dental, vision, or hearing coverage that original Medicare does not provide.

Medigap plans, also called Medicare Supplement plans, work alongside your original Medicare coverage. These plans help pay for costs that Medicare doesn't cover, such as deductibles, copayments, and coinsurance. Medigap plans do not include prescription drug coverage, so you would need a separate prescription drug plan if you want that coverage.

Prescription drug plans, known as Part D plans, help pay for medications. These plans can be added to original Medicare coverage or may already be included in your Medicare Advantage plan. Different plans cover different medications, so comparing which drugs are covered under each plan matters.

Long-term care insurance through AARP helps pay for care services if you need extended help with daily activities. This type of coverage is separate from health insurance and covers costs related to nursing home care, assisted living, or in-home care services.

Practical Takeaway: Each plan type serves a different purpose. Before looking at specific plan options, think about what type of coverage structure makes the most sense for your situation—whether you want one combined plan or separate plans for different types of coverage.

How Medicare Advantage Plans Through AARP Work

Medicare Advantage plans operate as an alternative way to receive your Medicare benefits. Instead of using the original Medicare system run by the federal government, you receive your Part A and Part B benefits through a private insurance company. AARP partners with several major insurance companies to offer these plans.

In a Medicare Advantage plan, you typically choose a primary care doctor who coordinates your care. When you need medical services, you usually must visit doctors and hospitals within the plan's network. Going outside the network usually costs more or may not be covered at all. However, some plans offer out-of-network coverage for emergencies or certain situations.

Most Medicare Advantage plans have a yearly out-of-pocket maximum. Once you reach this limit by paying deductibles, copayments, and coinsurance, the plan pays for most remaining covered services for the rest of that year. In 2024, the out-of-pocket maximum for Medicare Advantage plans cannot exceed $8,050 per year for in-network care.

Many AARP Medicare Advantage plans include benefits that original Medicare doesn't provide. These may include:

• Dental coverage for cleanings, fillings, or dentures
• Vision coverage for eye exams and eyeglasses or contacts
• Hearing coverage for exams and hearing aids
• Fitness benefits like gym memberships
• Transportation to medical appointments
• Over-the-counter medication allowances

Prescription drug coverage is included in all Medicare Advantage plans. The medications covered and the costs you pay may vary from plan to plan. You should review which medications are covered under each plan you consider, especially if you take regular prescriptions.

Practical Takeaway: When comparing Medicare Advantage plans, check whether your current doctors participate in the plan's network and review the list of covered medications. These two factors often matter more than small differences in monthly premiums.

Medigap Coverage and How It Supplements Medicare

Medigap insurance works with original Medicare to help cover medical expenses that Medicare doesn't pay for completely. Original Medicare covers a significant portion of hospital and doctor costs, but you still have to pay deductibles, copayments, and coinsurance. Medigap policies are designed to fill in these gaps.

The federal government has standardized Medigap plans into different types, labeled A through N (with some additional plans available in certain states). Each plan type offers the same benefits no matter which insurance company sells it. However, prices vary between companies and between different geographic areas. Plan G and Plan N are currently among the most popular options available.

Here's what Medigap plans typically help pay for:

• Medicare Part A deductible (the amount you pay before Medicare starts covering hospital stays)
• Medicare Part B deductible (the amount you pay before Medicare covers doctor visits and outpatient services)
• Copayments for hospital stays and doctor visits
• Coinsurance for hospital and doctor services
• Blood transfusions
• Emergency medical care outside the United States

It's important to understand that Medigap plans do not include prescription drug coverage. You would need to purchase a separate Part D plan to cover medications. AARP offers Part D plans that can be added to your original Medicare and Medigap combination.

When you first turn 65 and enroll in Medicare Part B, you have a six-month period called the Medigap Open Enrollment Period. During this time, you can buy any Medigap plan without medical underwriting, meaning the insurance company cannot deny you or charge you more based on health conditions. If you miss this window, some insurance companies may review your health history before approving a plan.

Practical Takeaway: If you plan to use Medigap coverage, enroll during your six-month Open Enrollment Period starting when you turn 65 and sign up for Medicare Part B. This protects you from potential medical underwriting later.

Prescription Drug Coverage Options and Medication Costs

Prescription drug plans help pay for medications, reducing what you have to spend out of pocket for prescriptions. These plans are called Part D plans when used with original Medicare, and they are typically included automatically in Medicare Advantage plans.

Part D plans have a specific structure for how costs are shared throughout the year. Early in the year, you pay a monthly premium for the plan. When you fill prescriptions, you pay a copayment or coinsurance amount, and the plan pays its share. This continues until you and your plan together have paid $5,850 in drug costs (as of 2024). After that, there is a coverage gap sometimes called the "donut hole."

In the coverage gap, you pay a larger share of medication costs, though the plan still provides some coverage. Once your out-of-pocket spending reaches a certain threshold (currently $7,050 in 2024), you enter the catastrophic coverage phase. At this point, you pay a small copayment and the plan covers most of the remaining costs for the year.

Different Part D plans cover different medications. Each plan maintains a formulary, which is a list of covered drugs. When comparing plans, you should:

• Check whether your regular medications are covered by the plan
• Review the tier level of each medication (lower tiers typically cost less)
• Look at mail-order and specialty pharmacy options
• Compare the total estimated yearly cost including premiums, copayments, and the coverage gap

AARP offers multiple Part D plan options through partner insurance companies. Because formularies change and drug prices vary, the best plan for you may be different from one year to the next. Many people re-evaluate their Part D plans annually during the open enrollment period from October 15 to December 7.

Practical Takeaway: Make a list of all medications you take regularly, including dosages. Use this list to compare which drugs are covered under different plans and at what cost tier before choosing a prescription drug plan.

Comparing AARP Plan Options and Costs

Comparing health insurance plans requires looking at several different cost and coverage factors. The lowest monthly premium doesn't necessarily mean the lowest total cost, because plans with higher premiums sometimes have lower deductibles or copayments.

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