Best Health Insurance Companies for Retirees

How to choose the right health insurance if you’re retiring

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Having adequate health insurance as a retiree is essential. It’s a wise investment throughout life, but even more so as you near retirement. Recent analysis shows that although people over 55 represent 29% of the population, they account for around 56% of healthcare spending. 

For those over 65 or who meet other qualifying criteria, Medicare is typically the most economical form of health insurance. However, it doesn’t cover people who retire earlier than the qualifying age or cover 100% of healthcare bills. There are still out-of-pocket expenses, which can quickly mount up and deplete hard-earned retirement savings in cases of a serious illness.  

If you’re approaching retirement age or considering early retirement, reviewing your health insurance arrangements is imperative.

This roundup explores a selection of options to help people considering their health insurance needs as retirees. We assessed 21 health insurance plans, exploring price, availability, and coverage. Continue reading to find out who made the list of our best health insurance for retirees.

Best Health Insurance Companies for Retirees

Best Health Insurance Companies for Retirees
Best Health Insurance Companies for Retirees

Best Overall : Aetna

Aetna

 Aetna

Why We Chose It: We chose Aetna as our best overall health insurance for retirees because of its reputation, extensive network, range of coverage options, and impressive benefits, such as acupuncture and chiropractic therapies.

What We Like
  • $0 premium plans available

  • Online quote and purchase system

  • Home delivery prescriptions

  • SilverSneakers fitness program

  • Meal delivery program

  • Rated 4 to 5 out of 5 on CMS star ratings

What We Didn't Like
  • Plans only available in 16 states

  • Offerings limited to HMO and PPO plans

  • No individual health insurance plans

  • Must select primary care physician with HMO plans

Aetna is one of the largest providers of Medicare Advantage Plans. These plans are alternatives to Original Medicare that offer additional benefits such as dental, hearing, and vision care. 

Aetna’s offerings consistently rank highly in The Centers for Medicare & Medicaid Services (CMS) annual star ratings. Aetna offers some of the lowest cost but highest quality insurance plans for retirees, making them our top pick overall.

Aetna began its long history as an insurance provider in 1853. CVS Health acquired Aetna in 2018, and they now serve around 39 million people with a range of health, prescription drug, and dental insurance plans.

Their financial strength is rated A (Excellent) by AM Best, and the Better Business Bureau (BBB) rates them as A+, which speaks to their outstanding customer service.

As with other Medicare plans, Aetna’s Medicare Advantage Plans’ benefits don’t max out and are guaranteed renewable. There is typically no upper dollar limit for covered services that are medically necessary. However, there may be coverage limits for some benefits, such as for hospital stays.

There are many Medicare Advantage plans to choose from, including the Aetna Medicare Plus Plan, with a $0 monthly premium, $0 deductible, and a maximum out-of-pocket of $999 per year. In common with all Medicare Advantage plans, you will also have to pay any Medicare Part A and Part B premiums. 

There are also Medicaid, Medigap, dental, and vision plans.

If you enroll in Medicare during the General Enrollment Period from January 1 through March 31, your coverage will begin on July 1.

Depending on the plan and your location, Aetna plans have a wide range of benefits beyond Original Medicare. These include:

  • Dental, vision, and hearing care
  • Alternative therapies including acupuncture and chiropractic care
  • Fitness benefits through the Silver Sneakers fitness program
  • Over-the-counter benefits for non-prescription drugs and health products
  • Prescription delivery service
  • 24-hour nurse hotline
  • Annual flu shots at no charge
  • Meals-at-home program following a hospital stay
  • Resources for living program for help at home, caregiver support, and social support

Medicare Advantage plans, including Aetna plans, only cover medically necessary services. They do not exclude pre-existing conditions but will not cover alternative therapies, alternative therapies, custodial care, personal care, and non-medical services.

Providing you qualify for Medicare, you can enroll in an Aetna Medicare Advantage Plan. You may find that these plans offer a more comprehensive health insurance option than Original Medicare, owing to the additional covered services.

Best for Low-income Seniors : Medicaid

Medicaid

 Medicaid

Why We Chose It: Medicaid is our top choice for low-income seniors because it’s a federal government program providing low or zero-cost access to health care.

What We Like
  • Free or low-cost premiums

  • Covers a wide range of health services

  • Limits out-of-pocket costs

  • Available in every state

What We Didn't Like
  • Only those with minimal resources can apply

  • Benefits vary by state

  • Under age 65 may not qualify

The federal government and individual states partner to provide the Medicaid program. It’s our top pick for retirees on a low-income as it offers comprehensive health coverage for little or no cost.

Medicaid helps pay eligible people to pay for their Medicare premiums and contributes toward out-of-pocket healthcare expenses, like deductibles and copayments. A significant advantage of Medicaid is that it extends coverage beyond Medicare. This cover can include prescription drugs, hearing aids, case management, and physical therapy, and there are no exclusions for pre-existing conditions.

Typically, Medicaid coverage begins immediately when an application is approved, has no premiums, and the benefits continue as long as you’re eligible with no maximum ceiling. 

People, including children, parents, pregnant women, seniors, and people with disabilities, can apply for Medicaid assistance. The federal government guidelines for eligibility and benefits are broad and allow individual states a great deal of flexibility in designing and administering their Medicaid programs. As a result, Medicaid qualifying criteria vary widely depending on location, although all use income calculations. 

Your income must be less than 138% of the federal poverty level to qualify for Medicaid if you live in a state with expanded Medicaid coverage. If your state has not expanded Medicaid, non-disabled adults without minor children cannot receive Medicaid benefits regardless of income level.

If you think you may qualify for Medicaid, contact your state Medicaid agency to request an application.

Best for Prescription Coverage : Humana

Humana

 Humana

Why We Chose It: Humana earns our best for prescription coverage ranking with some of the most economical plans on the market, combined with a first-rate reputation, CMS rating, and user-friendly website.

What We Like
  • Low monthly premiums

  • Transparent, online pricing

  • Easy to find out if your medications are covered

  • Large provider network

What We Didn't Like
  • May not be available in some locations

  • $445 deductible applies to drugs on tiers 3, 4, and 5

  • Medications may be cheaper elsewhere

Humana is a popular and well-known provider with an A- (Excellent) rating from AM Best and A+ rating from the BBB. Their solid reputation, combined with low-priced plans, made them our top choice for prescription coverage.

Original Medicare does not cover prescription drugs. If you want coverage, you’ll have to buy a standalone Medicare Part D plan, or instead opt for a Medicare Advantage plan that includes Part D. If you qualify for Original Medicare, you can purchase a Part D or Advantage plan. Humana provides both options for people living across the United States. 

Aside from individual and employer health insurance, Medigap, Medicaid, Medicare Advantage plans, dental, and vision policies, Humana offers three Part D plans you can purchase online. 

The most economical policy is the Humana Walmart Value Rx Plan, with a monthly premium of $17.20. Drug plans use a formulary to divide medication into cost tiers. On this plan, tier 1 and 2 drugs cost a $0 or $1 copay and have a $0 yearly deductible. Drugs on tiers 3, 4, and 5 have a $445 annual deductible. 

The Premium Rx Plan has a monthly premium of around $60, while the Humana Basic Rx Plan premium starts at $20. 

You can enroll in a Part D plan during specific periods, and you’ll have to wait up to three months for coverage to begin. After you’ve paid the deductible, plans cover up to $4,130; then you enter the coverage gap

The website is simple to use. You can easily find out if your current prescription medicines are covered in the plan’s formulary and what they’ll cost, so choosing the right plan is straightforward.

Humana has a wide network of pharmacies nationwide. You may find even lower prescription prices if you use one of the preferred cost-sharing partners, including Walmart, Publix, Kroger, and Costco pharmacies.

Best Short-Term Coverage : United Healthcare

United Healthcare

 United Healthcare

Why We Chose It: We chose United Healthcare for our best short-term coverage pick as they are the only provider that extends cover to 36 months, plus they have one of the largest provider networks in the United States.

What We Like
  • Three-year policy available

  • Online quotations

  • Prescription drug coverage available

  • Available in all states

What We Didn't Like
  • Not available in all locations

  • Excludes many pre-existing conditions

  • Coverage may be fairly limited

United Healthcare sells short-term health insurance policies underwritten by the Golden Rule Insurance Company. These policies are designed to cover transitional periods, for example, leaving work and qualifying for Medicare, and typically span from 3 to 12 months. However, their TriTerm insurance can cover up to three years. When combined with reasonable policy prices, United Healthcare was an obvious top pick for short-term coverage.

Other policy offerings include individual and employer health insurance, Medigap, Medicaid, Medicare Advantage plans, dental, vision, and prescription drug plans. 

United Healthcare has a long history of providing short-term health policies, and AM Best awards them an A rating for their financial stability.

The website has an online quotation system, and it’s easy to compare the different policies for your zip code. The system also shows you options for add-ons like vision and dental plans. People can enroll up to the age of 65.

Their Short-Term Medical Direct plans have premiums of around $75 per month which keeps premiums low by removing prescription drug cover and has a deductible of $12,500. For a lower $2,500 deductible, the premium increases to around $180 monthly. Lifetime maximum benefits are $500,000 for plans lasting 1–12 months. Waiting times may be as short as the day following approval.

Short-term health insurance is not compliant with the Affordable Care Act (ACA), so it may not cover pre-existing conditions or include many benefits. However, United Healthcare plans are flexible and have numerous options and add-ons so people can tailor their coverage for their specific needs.

Best for Supplemental Insurance : Cigna

Cigna

 Cigna

Why We Chose It: Our top supplemental insurance pick is Cigna because they offer a wide range of plans for different budgets, including various options to cover cancer treatments, heart attacks, and strokes.

What We Like
  • Online quotes

  • Range of plans available

  • Coverage across all 50 states

  • Non-standard options available

What We Didn't Like
  • Plans may be limited in some states

  • May not cover prescription drugs

  • Can be expensive for fully comprehensive cover

Founded in 1792, Cigna is one of the oldest providers in the United States and has an A rating for financial security from AM Best.

Cigna is an obvious choice for our supplemental insurance top-pick with their plans that include A, B, C, D, F, High-Deductible F, G, and N, plus non-standard options. Their portfolio also includes individual and employer health insurance, dental, and vision policies, plus Medigap, Medicaid, Medicare Advantage, and prescription drug plans. 

If you have Original Medicare coverage, you’ll be left with some out-of-pocket expenses like deductibles, coinsurance, and copayments. Supplemental insurance, or Medigap policy, helps you pay some of these costs.

Cigna’s plans do not require you to use an in-network provider, so you have the flexibility of using any healthcare provider who accepts Medicare. Additional perks include cover for foreign travel and access to Cigna Healthy Rewards. This free program offers savings on massage therapy, wellness products, and programs.

Policies differ considerably in cost, starting at around $50 each month for basic coverage, with fully comprehensive cover coming out at about $300. The maximum out-of-pocket is approximately $5,000. You can find quotes for your location through their online portal.

In common with other Medicare-related plans, you must enroll during specified periods and may wait up to three months for coverage. Plans are guaranteed renewable, don’t exclude pre-existing conditions but don't cover long-term care, vision dental care, or hearing care.

You may save money even with an additional premium to pay each month, plus you have the peace of mind knowing that any unexpected costs will be limited.

Final Verdict

Having health insurance as a retiree is essential as it is likely that your health needs increase during your retirement years. Without adequate health insurance, you could be left with debts totaling thousands of dollars should you fall ill, which would take a chunk out of your retirement savings. Our round-up presents excellent options for health insurance coverage for retirees.

Overall, Aetna was our top pick because of its solid reputation, extensive network, full range of coverage options, and impressive benefits.

Finding the money to cover health care can be particularly challenging if your income is low. Our top pick for low-income retirees is Medicaid. This federal government program is unrivaled in terms of providing low or zero-cost access to health care. 

Although Medicare covers many healthcare expenses, it doesn’t cover most prescription drugs. For standalone coverage, you can add to Original Medicare; Humana earns our highest ranking because of their economic plan options, outstanding reputation, and CMS rating, plus a user-friendly website.

If you retire before 65, you’ll need insurance to bridge the gap before you qualify for Medicare.  United Healthcare is our choice for short-term coverage as they can extend coverage to 36 months.

Finally, Cigna was our top supplemental insurance pick as they offer a wide range of plans for different budgets that cover the expenses left behind by Original Medicare.

Compare Providers

Insurance provider Why we picked it Monthly premium (average)
Aetna Best Overall $0
Medicaid Best for Low-Income Seniors $0
Humana Best for Prescription Coverage $17.20
United Healthcare Best Short-Term Coverage $75
Cigna Best for Medicare Supplemental Insurance $44

FAQs

How Does Health Insurance For Retirees Differ?

Health insurance for retirees differs from standard health insurance as typically it acts as a second payer to Medicare. 

Medicare provides coverage for most, but not all, healthcare costs. If you have separate insurance, the plan steps in and pays for any eligible healthcare services that Medicare didn’t cover.

If you purchase health insurance before age 65, it will be the primary payer. Once you enroll in Medicare, and if you choose to keep the insurance plan, it becomes the secondary payer. 

How Do You Choose Health Insurance When Retiring?

The government provides the Affordable Care Act Health Insurance Marketplace at Healthcare.gov to help you find available retiree health insurance plans in your location. If you’ve retired before you’re 65 and have lost your employee health plan, you’ll qualify for a Special Enrollment Period that allows you to enroll outside the annual Open Enrollment Period.

The Marketplace helps you to choose the most appropriate healthcare coverage for your needs and budget. You’ll first need to fill out an application before finding out if you qualify for a plan with premium tax credits and lower out-of-pocket costs. 

Once you turn 65 and qualify for Medicare, you can use Plan Compare at Medicare.gov to find a plan that suits you best.

Depending on your income and assets, you may find that you qualify for Medicaid. This government program offers free or low-cost healthcare coverage.

How Much Does Health Insurance For Retirees Cost?

The costs for retiree health insurance depend on your age and the type of coverage you choose.

If you are one of the nearly 38 million people with Original Medicare, you’ll pay for Part A hospital insurance and Part B medical insurance. Most people don’t pay a Part A premium, providing they’ve paid enough Medicare taxes during their working lives. If you don’t qualify for premium-free Part A, it costs $259 to $471 per month. The standard Part B monthly premium is $148.50. 

People choosing a Medicare Advantage Plan pay on average $25 for the monthly premium. This is in addition to Part A and Part B premiums. 

Private health insurance purchased through the government’s Health Insurance Marketplace costs an average of $462 per month. 

The COBRA Act allows some employees the right to continue their employer-sponsored health insurance if they leave work. The employee must then pay all the premiums for a maximum of 18 months. The cost of these premiums is an average of $7,188 per year.

What Is Excluded From Coverage?

Coverage exclusions differ by plan and provider. For example, Original Medicare does not usually cover the following:

  • Acupuncture and some other alternative healthcare services
  • Cosmetic surgery
  • Dental care and dentures
  • Eye exams
  • Hearing aids
  • Long-term care 
  • Prescription drugs
  • Routine foot care

Medicare Advantage plans have fewer exclusions and often include other benefits such as gym membership, wellness programs, and over-the-counter medications. 

Do I Need Insurance if I Have Medicare?

Unless you have a qualifying health condition, you can only enroll in Medicare at age 65. This means that they need an alternative form of health insurance for people who retire earlier, typically from a private insurance company.

Original Medicare only pays a proportion of covered healthcare services, leaving beneficiaries with out-of-pocket expenses to pay like an annual deductible, coinsurance, and copayments. It also excludes some services altogether such as dental care, and prescription drugs.

To benefit from more comprehensive cover, people can instead choose a bundled Medicare Advantage Plan or supplementary insurance cover through Medigap.

How We Chose The Best Insurance Companies for Retirees

To assess retirees’ best health insurance, we looked at 21 providers of Medicare Advantage Plans, Medigap policies, prescription drug coverage, and short-term coverage as alternatives to Original Medicare. 

We used data from the National Committee for Quality Assurance, AM Best, and The Centers for Medicare & Medicaid Services (CMS) annual star ratings.

Each company was evaluated based on reputation, financial stability, ease of quotation and purchase, monthly premium costs, network, coverage, and additional benefits before selecting the top five health insurance options for retirees.

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Article Sources
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