Understanding AARP Health Insurance Plans and Coverage

What AARP Health Insurance Plans Are and How They Work

AARP health insurance plans are Medicare supplement insurance policies (also called Medigap) and Medicare Advantage plans marketed through AARP. These are not health plans created or run by AARP itself. Instead, AARP partners with insurance companies like UnitedHealthcare to offer these plans to people who are enrolled in Medicare. Understanding this distinction matters because AARP is an organization that represents older adults, but the actual insurance coverage comes from licensed insurance carriers.

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Medicare supplement plans help pay for costs that Original Medicare (Medicare Part A and Part B) does not cover. These costs include deductibles, copayments, and coinsurance. For example, if you go to the hospital, Medicare Part A covers many hospital costs, but you would pay a deductible in 2024 of $1,676. A Medigap plan can help pay that deductible so you are not responsible for the full amount.

Medicare Advantage plans (also called Part C) are a different type of coverage. Instead of using Original Medicare, you get your Part A and Part B coverage through a private insurance company. These plans often include prescription drug coverage (Part D) built in. Many Medicare Advantage plans offer extra benefits like dental, vision, or fitness programs that Original Medicare does not cover.

The plans available through AARP are standardized by the federal government, meaning a Medigap Plan F offered by one insurance company covers the same things as a Plan F offered by another company. The main differences between insurers are price and customer service quality. This makes it easier to compare plans across different carriers.

Practical Takeaway: Before looking at specific AARP plans, determine whether you want to keep Original Medicare (which would require a Medigap plan) or switch to Medicare Advantage (which replaces Original Medicare). This choice affects which type of plan you would review.

Types of AARP Medicare Supplement (Medigap) Plans

AARP offers 10 standardized Medigap plans, labeled A through N. Each plan covers different combinations of costs that Original Medicare leaves unpaid. The federal government sets what each plan letter must cover, so these benefits do not vary between insurance companies—only prices change.

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Plan A is the most basic option. It covers Part A coinsurance and hospital costs up to 365 days after Medicare benefits end. It also covers Part B coinsurance and copayments for emergency room visits and urgent care. For 2024, Plan A premiums through AARP start around $100 to $150 per month, though prices vary by location and age.

Plan G is one of the most popular choices. It covers most costs that Original Medicare does not pay, except the Part B deductible (which is $240 in 2024). Plan G typically costs more than Plan A—around $150 to $250 per month depending on your location—but it offers broader coverage that can save you money if you need significant medical care.

Plan N is another popular option that offers moderate coverage at a lower price point than Plan G. It covers many costs but requires you to pay small copayments for doctor visits ($20 typical) and emergency room visits ($50 typical). This plan costs less monthly but means paying small amounts at the point of care.

Other plans include Plan B (similar to A but with higher deductible coverage), Plan D, Plan K, and Plan L, which offer varying levels of coverage. Plans F and C were available before 2020 but are no longer sold to people newly enrolled in Medicare. The choice between plans depends on your expected medical needs and budget.

Practical Takeaway: Create a list of your expected healthcare needs for the year—doctor visits, hospital stays, prescription drugs—and use this to compare which plan letter makes financial sense for your situation.

Understanding AARP Medicare Advantage Plans

Medicare Advantage plans offered through AARP operate differently than Medigap. Instead of supplementing Original Medicare, these plans replace it entirely. You still pay your Medicare Part B premium to the federal government, but your coverage comes through a private insurance company partnering with AARP.

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Most AARP Medicare Advantage plans are Health Maintenance Organization (HMO) plans or Preferred Provider Organization (PPO) plans. HMO plans require you to use doctors and hospitals within a specific network, except in emergencies. If you go outside the network without authorization, you pay the full cost. PPO plans offer more flexibility to see out-of-network providers, but you pay more to do so.

These plans often cost $0 in monthly premiums, which appeals to many people. However, they typically have higher deductibles and out-of-pocket costs when you use medical services. For example, a plan might charge $0 premium but require you to pay $250 per specialist visit or $500 annual deductible. Over a year, these costs could add up to $1,000 or more if you need frequent care.

A significant advantage of Medicare Advantage is that many plans include prescription drug coverage (Part D), dental benefits, vision benefits, and wellness programs like gym memberships. Some plans even cover hearing aids or podiatry. Original Medicare does not include these benefits, so Medicare Advantage can provide additional coverage if these services matter to you.

Medicare Advantage plans must cover all services that Original Medicare covers, but they can set their own costs, deductibles, and copayments. Each plan differs in what it covers and how much you pay, so comparing plans in your area is essential.

Practical Takeaway: List the doctors and hospitals you use regularly, then check whether the Medicare Advantage plans you are reviewing include them in their networks. If your preferred providers are out-of-network, the plan may cost you significantly more.

Costs, Deductibles, and Out-of-Pocket Limits

Understanding the costs associated with AARP health insurance plans requires learning several key terms. The monthly premium is the amount you pay every month for coverage, regardless of whether you use healthcare services. Medigap premiums are paid directly to the insurance company. Medicare Advantage premiums are often $0, but you still pay your Medicare Part B premium to the government.

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The deductible is the amount you must pay out of your own pocket for healthcare services before insurance starts paying. For example, a Medigap Plan A might have no deductible for Part B services, while Plan G has a $240 annual deductible for Part B. A Medicare Advantage plan might have a $500 deductible for hospital stays or $0 for office visits. Different services can have different deductibles within the same plan.

Copayments (copays) are fixed amounts you pay for specific services. For instance, you might pay $15 for a doctor visit or $50 for an emergency room visit. Coinsurance is a percentage of the cost you pay after meeting your deductible. If your coinsurance is 20%, and a procedure costs $1,000, you pay $200 and insurance pays $800.

Medicare Advantage plans have out-of-pocket maximums, which is the most you will pay in a year for covered services (not including premiums). Once you reach this limit, the plan pays 100% of covered services for the rest of the year. For 2024, this maximum is $8,300 for in-network care in most plans. Medigap plans do not have out-of-pocket maximums in the traditional sense, but your total costs are capped by plan design.

It is important to calculate total annual costs, not just premiums. A plan with a low premium might have high deductibles and copays, resulting in higher total spending if you need care. Conversely, a higher premium plan might save you money if you use healthcare services frequently.

Practical Takeaway: Create a cost comparison spreadsheet listing monthly premiums, deductibles, copays for your expected services, and potential out-of-pocket costs for each plan you are considering. Calculate total annual costs under different healthcare scenarios (minimal care, moderate care, high care) to see which plan costs less based on your needs.

How to Review and Compare AARP Plans in Your Area

AARP plans vary significantly by state and county. A plan available in one area may not be offered in another, and prices change frequently. To find

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