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Details of the AARP health insurance plan
AARP is a trusted name for many people, but especially for retirees. AARP is not an insurance company, but it does support UnitedHealthcare’s health insurance plans. These are the only programs accredited by the AARP.
AARP’s mission is to improve the quality of life for people as they age. Because many people need to go beyond original health insurance, the AARP endorses the main types of private health insurance: Medicare Advantage and Medicare Supplement.
The gap in primary health insurance
As people choose AARP Medicare plans to supplement or even replace their Original Medicare coverage, we’ll quickly review some of the gaps in Original Medicare before discussing plans that are endorsed by the American Association of Retired Persons (AARP).
Originally Medicare was provided in two “parts” – Part A, which covered inpatient services, and Part B, which included outpatient services. You can expect to pay some money out of your pocket with these two parts. These costs come in several forms: deductibles, co-pays/coinsurance, and Medicare excess charges.
Under the original Medicare system, there was no cap on your out-of-pocket expenses in a year or lifetime. If you had a particularly bad year of health, with multiple hospitalizations or major surgeries, you could be paying tens of thousands of dollars.
Additionally, prescription drugs are not covered by Original Medicare. Instead, you have to buy the drug out of your pocket or join a private prescription drug plan.
People often worry about the impact these out-of-pocket costs will have on their finances, especially in retirement. To ease their burden, they often choose to enroll in Medicare Supplement insurance or Medicare Advantage plans.
AARP Medicare Supplemental Insurance Plan
AARP’s Medicare supplemental insurance plan pays for some or all of what you would normally pay with Original Medicare. These costs are often referred to as “gaps”, medicare supplemental insurance plans are also known as Medigap plans or policies.
Medigap policies are issued in standardized “plans.” There are 10 standardized plans: A, B, C, D, F, G, K, L, M, and N. Each standardized plan covers a different portion of the gap in Original Medicare.
The three most popular Medigap plans are F, G, and N. As you can see, the three plans share certain features:
- 100% Part A deductible
- Emergency coverage outside the US
- Party B co-insurance
- Skilled Nursing CONUNSURANCE Coverage
Plan F is the most comprehensive Medicaid program available. This plan covers 100% of the cost of medical licensing services and procedures. In any given year, you can use Plan F without out-of-pocket.
You may have heard about plans to withdraw in 2020. If you were already eligible for Medicare before January 1, 2020, you still have the right to remain in Plan F, or to participate in the plan. However, if you become eligible for Medicare on or after January 1, 2020, Plan F will no longer be valid.
Plan G is the second comprehensive Medigap plan available. It’s very similar, except that Part B is deductible. Every year, you’ll have to pay $198 for Part B service. After this time, your plan will cover 100% of Medicare-approved expenses.
From 2020, a new program called High Deductible G (HDG) will be available. HDG is the same as regular Plan G, except there is a $2,180 deductible. You pay the first $2180 and the program pays the rest. HDG’s premiums are much lower due to deductibles.
Plan N is also very comprehensive. It’s also more like traditional health insurance. With Plan n, you will pay a small fee (up to $20) to see a doctor. You will also pay up to $50 to visit the emergency room. Plan N does not cover Part B’s “excess charges.”
Additional fees are charged only by physicians and institutions that do not accept Medicare-approved rates. These providers can add up to 15% of the Medicare-approved amount, and this 15% is billed directly to you. Note that most doctors accept Medicare pricing, so overcharging is somewhat rare.
No matter which standard plan you choose, an important benefit is that you can see any doctor who accepts Medicare or use any medical facility. You can use your Medicaid program anywhere in the country without a referral. This is a big reason why people choose Medicaid.
The AARP branded Medicaid insurance plan comes with additional benefits. These benefits go beyond the requirements of the standard Medigap plan. AARP plans to provide these benefits, giving members even more value.
Additional benefits vary by the state where you live, but can include:
- gym membership
- Discounts on Vision Exams and Glasses
- 24-hour nurse service hotline
Prescription Drug Coverage
Medicaid does not cover prescription drugs. You need to sign up for a stand-alone Prescription Drug Plan (PDP) if you want someone to help you pay for your medicines.
Eligibility for Medigap plans generally follows the rules of Original Medicare you must be in both Part A and Part B to purchase a Medigap policy.
One potential difference is that even if you qualify for Original Medicare at a younger age, some states require you to be 65 or older to enroll in Medigap.
The cost of AARP Medicaid
Medicare supplemental insurance plans from AARP charge a monthly premium each month. This premium is your Part B premium that you must also pay. Premiums vary depending on the standardized plan you choose; Plan F Plans more comprehensive plans have higher premiums.
AARP Medicaid premiums are affected by many factors but are usually determined based on the demographics of the community in which you live. This means that your premiums are not set in a way that is based on your age, but rather on the relative age of the community, among other factors.
AARP Medicare Advantage Plan
AARP also supports the Medicare Advantage program. Medicare Advantage also known as Medicare Part C. Medicare Advantage is an alternative to Original Medicare; it does not supplement like Medigap.
Although these plans are created by private insurance companies, Medicare Advantage plans must provide all the benefits of original Medicare part A and part B. The benefits they bring are more comprehensive.
Medicare Advantage plans work differently than Medigap. Instead of working with Parts A and B and filling most or all of the original Medicare gaps, you’ll have small co-pays and coinsurance for most services and procedures.
These duplication and coinsurance amounts make Medicare Advantage look like employer-provided health insurance that you may already be familiar with. Other similarities include the fact that most Medicare Advantage plans are based on HMOs or PPOs.
You may need to choose from a network of approved doctors and agencies, and you may need a referral from your primary care physician to see a specialist.
Your out-of-pocket costs under Medicare Advantage will differ from Original Medicare in two important ways:
- Co-pays and coinsurance are generally lower under Medicare Advantage
- Medicare Advantage Plan Maximum (OOPM)
You’ll know your maximum annual spending on Medicare-approved health care, unlike Original Medicare.
Having a hard pocket cap is one of the main reasons for the growing popularity of Medicare Advantage. OOPM can help you better budget for your medical bills and can provide you with some peace of mind during your retirement years.
Benefits Beyond Original Medicare
Another reason for the popularity of AARP Medicare Advantage plans is the number of perks that come with them. These perks vary by state, but may include:
- gym membership
- Optional affordable dental insurance
- Vision coverage (examination, lens, and even frame coverage)
- Hear the coverage (exams and discounts on major hearing aids )
- medical service transportation
- foot care, massage care, and acupuncture
Prescription Drug Coverage
Many Medicare Advantage plans have drug coverage. In this case, they are called MAPD plans. You may want to find an MAPD plan because you can’t usually enroll in a Medicare Advantage plan and a separate prescription drug plan at the same time.
The drug plan portion of your Medical Advantage plan has separate deductibles and co-pays/coinsurance compared to the medical portion. There is no co-pay cap on the drug portion of MAPD.
The AARP Medicare Advantage plan follows the eligibility rules of Original Medicare. If you are eligible and take Parts A and B, you can take Medicare Advantage. One exception is if you have the end-stage renal disease (ESRD).
When eligible for Medicare, most Medicare Advantage plans will not accept people who already have ESRD. There are programs, called Chronic Special Needs Programs (C-SNPs), designed for people with ESRD.
AARP Medicare Advantage Plan Costs
Medicare Advantage plans from the American Association of Retired Persons (AARP) may have monthly premiums, which largely depend on where you live. Medicare Advantage plans are typically offered by county; larger, more populous counties tend to have lower premiums or no premiums at all.
In addition to any premiums for your Medicare Advantage plan, you will need to continue to pay your Part B premiums to maintain your Medicare Advantage coverage.
Advancing the AARP Medicare Program
AARP offers a variety of options for health insurance:
- The MeigIAP program supplements the coverage of Parts A and B. Consider combining the AARP-accredited Meigigp program with the AARP Prescription Drug Program.
- Medicare Advantage plans are more affordable than Medigap plans but still lower your high out-of-pocket costs.
As you approach entering Medicare, consider an independent professional as part of the research process. A licensed Medicare insurance agent can help you compare AARP Medicare plan quotes, learn what plans are available in your area, and determine the best plan for your needs.
Joseph Arroyo is a licensed health insurance agent continuing in the South Carolina Hilton. Arroyo is certified to sell Medicare products, including Medicare Supplemental Insurance, Medicare Advantage, and Prescription Drug Plans.