Learn About AARP Healthcare Plan Options

What AARP Healthcare Plans Are and How They Work

AARP offers several types of health insurance plans through partnerships with major insurance carriers. These plans are designed for people age 50 and older, though some specific plans have different age requirements. Understanding what these plans are can help you learn about coverage options that may work for your situation.

AARP Medicare Supplement Insurance (also called Medigap) helps cover costs that Original Medicare doesn't pay for, such as copayments, coinsurance, and deductibles. Original Medicare is the federal health insurance program for people age 65 and older and some younger people with disabilities. When you have a Medigap policy alongside Original Medicare, Medicare pays its share of covered services first, then your Medigap policy pays its share of the remaining costs.

AARP Medicare Advantage plans are an alternative to Original Medicare. These plans are offered by private insurance companies that contract with Medicare. Medicare Advantage plans often include additional coverage that Original Medicare doesn't, such as vision, hearing, or dental services. Most Medicare Advantage plans also include prescription drug coverage built in.

AARP also partners with insurance carriers to offer health plans for people under age 65 who don't yet qualify for Medicare. These plans operate in the individual health insurance marketplace created by the Affordable Care Act. They follow the same rules as other marketplace plans regarding coverage of preventive services and pre-existing conditions.

The key difference between these plan types is how coverage works. With Medigap, you keep Original Medicare and add supplemental coverage. With Medicare Advantage, the private insurance company becomes your main coverage source. Each approach has different costs, networks, and out-of-pocket expenses.

Practical Takeaway: Before exploring specific AARP plans, determine which category fits your age and situation: Are you under 65, turning 65, or already on Medicare? This determines which AARP plan options may be relevant to you.

AARP Medigap Plans: Coverage Options and How They're Structured

AARP Medigap plans are standardized by the federal government, meaning plans with the same letter designation (A, B, D, G, K, L, M, or N) offer identical coverage regardless of which insurance company sells them. This standardization helps you compare plans more easily. The main differences between plans are what specific costs they cover and how much they cost.

Plan A is the most basic Medigap option. It covers the coinsurance for hospital stays after you've met your deductible, coinsurance for medical services, and blood transfusions. Plan B covers everything Plan A does, plus it also covers the Part A deductible (the initial out-of-pocket cost you pay before Medicare coverage begins).

Plan G is one of the most popular choices. According to the Centers for Medicare and Medicaid Services, Plan G coverage includes the Part B deductible, Part A coinsurance, hospital coinsurance, medical services coinsurance, blood transfusions, and Part B excess charges. The main difference between Plan G and the highest-coverage options is that Plan G doesn't cover the Part A deductible, though this deductible was $1,556 in 2024 and is a one-time annual cost.

Plans D, K, L, M, and N offer various levels of coverage between basic and comprehensive options. For example, Plan K covers 50% of certain costs while you cover the other 50%, creating a shared responsibility structure. Plan N covers most costs but may require small copayments ($20 for doctor visits, $50 for emergency room visits in some cases).

The federal government adds and removes plan letters periodically. As of 2024, Plans C and F are no longer being sold to people turning 65, though people who had these plans before certain dates can keep them. This means your options for new coverage may differ from what someone else had in previous years.

Practical Takeaway: Compare the coverage details across different plan letters that interest you by looking at what each one covers regarding Part A and Part B costs. Once you know which coverage type appeals to you, you can compare prices across different insurance companies offering that plan letter.

AARP Medicare Advantage Plans: Understanding Network Restrictions and Extra Coverage

Medicare Advantage plans operate differently than Medigap plans because they replace Original Medicare rather than supplement it. When you enroll in a Medicare Advantage plan, you still have Medicare coverage, but the private insurance company that runs your Medicare Advantage plan handles most of the administrative work and coordinates your care.

Most Medicare Advantage plans are either Health Maintenance Organization (HMO) plans or Preferred Provider Organization (PPO) plans. HMO plans typically require you to choose a primary care doctor who coordinates your care and must give referrals before you see specialists. You generally pay nothing or a small copayment to see in-network doctors. If you see out-of-network doctors without a referral in an emergency, you may pay more.

PPO plans offer more flexibility. You can see any doctor without a referral, and you don't need to choose a primary care doctor. However, you'll pay less if you see in-network doctors. Out-of-network care is covered but at a higher out-of-pocket cost to you. This flexibility comes at a price—PPO premiums are often higher than HMO premiums.

Many Medicare Advantage plans include coverage for services that Original Medicare doesn't pay for. The Medicare.gov website reports that in 2024, approximately 98% of Medicare Advantage enrollees have vision coverage, 97% have dental coverage, and 95% have hearing coverage included in their plans. These additions can represent significant value because Original Medicare doesn't cover routine dental, vision, or hearing services.

Medicare Advantage plans include drug coverage built in, so you don't need to buy a separate prescription drug plan. However, not all drugs may be covered at the same price level. Most plans use a formulary—a list of covered medications organized by tier. Generic drugs are typically in lower tiers with lower copayments, while brand-name or specialty drugs may be in higher tiers with higher copayments.

Practical Takeaway: If you have a doctor you want to keep seeing, check whether that doctor participates in the Medicare Advantage plan's network before enrolling. Compare the copayments and out-of-pocket limits across plans alongside the extra coverage benefits like dental and vision to understand the real value.

Understanding Costs: Premiums, Deductibles, and Out-of-Pocket Limits

AARP health plan costs have several components that you need to understand separately. The monthly premium is what you pay every month for the plan. This is distinct from the deductible, which is the amount of money you must pay out of your own pocket before the plan starts paying its share of covered services.

For Medigap plans, premiums vary significantly based on your age, location, and the plan you choose. AARP doesn't set these prices directly—insurance companies that partner with AARP set them. Premiums might range from $100 to $300 per month or more, depending on these factors. Medigap plans typically don't have a deductible in the traditional sense, but some plans (like Plan G) don't cover certain costs like the Part B deductible, which means you pay that cost when it occurs.

Medicare Advantage plans have different cost structures. Many offer $0 premiums, particularly in areas with competitive insurance markets. The Kaiser Family Foundation reported that in 2023, approximately 40% of Medicare Advantage enrollees had plans with no monthly premium. However, $0 premium doesn't mean no costs—you still pay copayments and coinsurance when you use services, and there's typically a deductible.

Out-of-pocket limits are the maximum amount you'll pay in a year for covered services. Once you reach this limit, the plan pays 100% of covered services for the remainder of that year. For Medicare Advantage, the federal government sets a maximum out-of-pocket limit; in 2024, this was $7,750. Some plans have lower limits. Medigap plans don't have out-of-pocket limits in the same way, because the standardized benefit amounts are set by federal regulation.

When comparing costs, consider your expected healthcare usage. If you rarely see doctors and take few medications, a plan with lower premiums but higher copayments might work well