Which type of plan would be most appropriate for an individual on medicare and is concerned

For most seniors and retirees, the best health insurance plan will be Medicare. We recommend either a Medicare Advantage plan from Kaiser Permanente or a Medicare Supplement Plan G from AARP/UnitedHealthcare (UHC).

However, there may be another good option depending on your age and income. If you have a low income, you may qualify for Medicaid, which is free or low-cost. And if you're under 65 and don't qualify for Medicare, we recommend a Blue Cross Blue Shield (BCBS) plan from the health insurance marketplace.

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Best overall

For those age 65 and older or who have a qualifying disability, the Medicare program will be the cheapest health insurance with the best benefits. When you were working, you paid into the Medicare program via a Medicare tax on income. Your senior years are the time to take advantage of this investment.

Medicare has several different parts including options from private insurance companies and a public option directly through the Medicare agency. This variety allows you to decide what type of plan works best for you.

There are two main pathways on how you can enroll in Medicare coverage:

• Medicare Advantage (also called Medicare Part C) is a bundled health insurance plan that's purchased from a private insurance company. Plans cover medical care and hospital care, and they frequently include prescription drug coverage, dental and vision.

  Medicare Advantage plans are similar to traditional health insurance plans in how they are structured. For example, they have copayments for each medical service, a deductible and an out-of-pocket maximum. And because plans are through private insurance companies, you'll have a network of doctors and health care providers affiliated with the plan.

• Original Medicare lets you combine multiple plans including Part A (hospital insurance) and Part B (medical insurance). These two plans are administered directly by the government, and on top of these plans, you can add on additional coverage from private health insurance companies based on your needs.

  You can add on a Medicare Supplement plan (also called Medigap), which reduces your portion of the health care costs from 20% of the bill to oftentimes $0 after the deductible. Another add-on is a Medicare Part D plan for prescription drug coverage, your only way of getting prescription benefits with Original Medicare.

Best if you have a low income

The Medicaid public health insurance program provides free or affordable insurance for those who are eligible. Even if you're over age 65 or enrolled in Medicare, you can qualify for dual enrollment in both Medicaid and Medicare. This will give you access to certain types of Medicare Advantage plans including a Medicare-Medicaid Plan (MMP) or a Dual Eligible Special Needs Plan (D-SNP).

Qualification criteria for Medicaid vary by state. In 12 states , you'll meet the Medicaid income qualification if you earn less than 100% of the federal poverty level (FPL). That's less than $13,590 per year for an individual and less than $18,310 for a couple.

In 38 states and the District of Columbia, the expanded Medicaid program allows you to meet the income qualification if you earn up to 138% of the FPL. Excluding Alaska and Hawaii, you could be eligible in states with expanded Medicaid if you earn less than $18,754 as an individual or $25,268 as a couple.

Seniors over age 65 who have incomes that are too high to qualify for Medicaid may be able to use a combined calculation of income and medical expenses to qualify. The Medicaid "spenddown" program lets you subtract your medical expenses from your income, and this reduced amount can be used to see if you qualify for Medicaid.

Best Medicare Advantage

Bundled Medicare Advantage plans are administered by private insurance companies, and you could have more than 20 plans offered in your area. Most people will have access to Medicare Advantage plans starting at $0 per month, and the average cost is $33 per month.

Kaiser Permanente stands out as the only national provider with a 5-star average rating, outpacing the other major companies, which do not have an average score higher than 4.2 stars. This overall strong performance makes it our pick as the best Medicare Advantage plan provider.

Pros of Kaiser Permanente:

• Top-rated plans: For seniors choosing a bundle of coverage through Medicare Advantage, Kaiser Permanente is a top-tier company with a high rate of satisfied policyholders. Surveyed subscribers gave the company high ratings for both the quality of the plan and the quality of the health care they received.
• $0 deductible: Most plans have a $0 deductible, so you get the cost-sharing benefits of a plan right away, helping you avoid any upfront costs for medical care. This is a helpful feature for seniors on a fixed income. Many plans also have no deductible for prescription drugs, adding even more value to your benefits.
• Syncs with Kaiser health care: Kaiser's insurance plans are paired with the company's medical facilities and doctors. This is useful for many seniors who appreciate the convenience of having one location for their health care needs and the ease of a simplified billing portal that can combine information about medical costs and your insurance plan. However, as you'll read below, this can also be a disadvantage.
• Free preventive care: Kaiser's Medicare Advantage plans have $0 copayments for preventive care, helping you stay on top of your medical needs while you age. For example, policyholders gave Kaiser high ratings for services like breast cancer screening, colorectal cancer screening, diabetes monitoring and rheumatoid arthritis management.

Cons of Kaiser Permanente:

• Narrow network of doctors and providers: All of Kaiser's plans are HMOs, which means they'll only cover in-network care. And the plan's integration with the Kaiser health network means enrollees don't have the freedom to go to any doctor they want.
• Not suited for frequent travelers: The limited network of providers is especially problematic for those who are frequently outside the service area of Kaiser health facilities. If you're traveling, you'll have out-of-network access to urgent care or hospitalization, but you won't be covered for routine care. That makes these plans not the best fit for those who spend part of their time out of state.
• Average cost of $57 per month: Kaiser Permanente's Medicare Advantage plans are frequently more expensive than other providers. Although a basic plan costs $0 per month, most people can expect to pay $25 or more for a plan.
• Has limited availability: Kaiser Permanente only operates in select locations — California, Colorado, the District of Columbia, Georgia, Hawaii, Maryland, Oregon, Virginia and Washington. However, the plans are a popular option for those who have access.

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Best Medicare Supplement

Medicare Supplement (Medigap) plans provide secondary coverage on top of your Original Medicare benefits. Medigap plans will usually cost more than Medicare Advantage, but typically, you'll pay less for medical care with a Medigap plan than with a Medicare Advantage plan. This is especially useful for seniors who are concerned about escalating medical costs as they age.

Medigap plans are different from other types of insurance plans because coverage is standardized by plan letter. That means Medigap Plan G from one company will have the same benefits as Plan G from another company.

Because of this, we recommend that you first choose the plan letter with the benefits you want and then choose the provider that has affordable prices, good ratings and useful add-on perks.

Medicare Supplement Plan G:

• Why Plan G? As the best plan available to new enrollees, Plan G provides coverage for all available Supplement benefit categories except the Medicare Part B deductible. The only better option is Plan F, which is not available to new enrollees.
• What does Plan G cover? The plan pays for Medicare Part A copayments and the deductible, so you won't pay anything for hospitalization, hospice care or a skilled nursing facility. It pays for all Medicare Part B copayments and excess charges, so all doctor appointments, treatments and tests will be free after you meet your deductible. It also covers 3 pints of blood and 80% of emergency medical costs during foreign travel.
• What medical care will you pay for with Plan G? Plan G doesn't cover the Medicare Part B deductible, which is $233. This means you'll have some out-of-pocket costs for medical care at the beginning of the policy year before your spending reaches the deductible.

Pros of AARP/UnitedHealthcare Medigap:

• Add-on benefits: In addition to the standardized coverage for medical and hospital care, AARP plans stand out for the wide selection of included add-ons. Policyholders get discounts on vision care, eyewear, dental care, hearing screenings and hearing aids. Enrollees also get a free gym membership, access to a 24/7 nurse line and helpful resources for retirees including mental sharpness tools and driver safety courses.
• Good value: For a 65-year-old buying Plan G, the average cost is $159 per month. AARP/UnitedHealthcare isn't typically the cheapest provider available, but plans are a good deal when you consider the add-on benefits. Rates do change based on whether the state allows age-based price increases. For example, a 65-year-old will pay an average of $124 per month in states where prices are permitted to increase by age.
• Option for in-network savings: Typically, Medigap plans have no networks and can be used at nearly all doctors and medical providers in the country. But if you're willing to give up some of this flexibility, AARP/UnitedHealthcare is one of the few companies that offer Medigap Select Plan G, which only has coverage for in-network providers. Choosing this option can give you the same benefits as a standard Plan G but for prices that are about $20 to $40 cheaper per month.

Cons of AARP/UnitedHealthcare Medigap:

• Not the cheapest: The cost of plans from AARP/UHC are about average. In most places, other companies offer more-affordable plans that may be bare-bones policies without any perks, or the company could have a lower overall performance. If getting the cheapest monthly rate is your top priority, consider companies like Aetna or Mutual of Omaha.
• Requires AARP membership: You must be an AARP member in order to enroll in an AARP Medigap plan, and you can join during the application process if needed. The costs are minimal, only $16 for the year, but some seniors have complained about AARP's aggressive marketing.
• More customer complaints than average: UnitedHealthcare receives about 22% more complaints than a typical insurer of its size according to the National Association of Insurance Commissioners (NAIC). However, both UHC and AARP actively resolve complaints filed with the Better Business Bureau (BBB), earning them an A+ rating.

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Best prescription drug plan

For those choosing Original Medicare, the only way to have coverage for prescription drugs is to sign up for a stand-alone prescription drug plan called Medicare Part D. This is an important coverage component for seniors and retirees because your use of prescription drugs can increase as you age, and medications can be very expensive.

A Part D plan isn't needed for most people choosing Medicare Advantage because prescription drug coverage is included in the plan's benefits. However, there are some less common circumstances where you can add on Part D such as if your Medicare Advantage plan is a Private Fee-for-Service (PFFS) plan or a Medical Savings Account (MSA).

We recommend Humana as the best Medicare Part D provider because you can get good benefits at affordable prices with a range of plans available including the zero-deductible Humana Gold Plus.

Pros of Humana Part D:

• Low-cost options: The average cost of Humana's Part D plans is $38 per month, but plans start at $23 per month. Even the cheap plans generally provide a good value on coverage.
• Affordable generics: The cheapest plan, Humana Walmart Value Rx, has no deductible for generic drugs (Tier 1 and 2 prescriptions). This means you can start getting the plan's benefits right away without first having to pay full price for these medications. Plus, at many pharmacies, the copay for these prescriptions is only $0 to $4 for a 30-day supply, making many routine medications very affordable.
• Mail order customer satisfaction: For the increasingly large number of seniors who get their prescriptions through the mail, easy ordering and delivery are valuable benefits. For the past several years, Humana has ranked No. 1 on the J.D. Power survey for mail order customer satisfaction. The company scored even higher than Kaiser Permanente, which has a reputation of being one of the country's top insurance companies.

Cons of Humana Part D:

• High deductible for brand-name prescriptions: Most of Humana's plans have a $480 deductible for medications in Tiers 3, 4 and 5. With these plans, if you do need brand-name or specialty prescriptions, you'll have upfront costs before your spending reaches the deductible. After this, you'll only pay the copayment for each prescription.
• High rate of complaints: Even though Humana's Medicare plans are well-rated and don't have more complaints than average, the company's overall performance is not as strong. Humana has 82% more complaints than is typical for an insurer of its size, according to the NAIC complaint index. This can be something to watch out for in case the Medicare customer experience starts to decline over time.

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Best if you’re under 65

A traditional health insurance plan is the best option if you're under 65, don't yet qualify for Medicare and earn too much to qualify for Medicaid. You can get the best deal on these plans through HealthCare.gov, also called the health insurance marketplace.

Health insurance costs can get very high as you age, and for those over 60, a Silver insurance plan costs more than $1,000 per month, on average. However, the marketplace has a program, called premium tax credits, that provides discounted rates for those who have low to moderate incomes.

For example, an individual earning $51,520 per year (400% of the federal poverty level) would pay about $365 per month for a Silver health insurance plan. These earnings could include retirement account withdrawals, self-employment earnings, unemployment income or other income sources.

Among the insurance companies offering plans on the marketplace, we recommend Blue Cross Blue Shield for its well-rated plans that are widely available.

Pros of Blue Cross Blue Shield health insurance:

• Above-average ratings: According to performance data compiled by the National Committee for Quality Assurance (NCQA), Blue Cross Blue Shield subsidiaries (excluding Anthem) have an average of 3.6 stars. In comparison, UnitedHealthcare has 3.4 stars, and Aetna has 3.3 stars.
• Large network of doctors and medical facilities: BCBS is one of the largest health insurance organizations in the country and therefore has one of the largest networks of affiliated medical providers. Even though the list of in-network providers changes by plan, the expansive network is an asset, especially if you're seeking specialized care.
• Low rate of complaints: According to the NAIC complaint index, BCBS has about half as many complaints as the industry average based on a weighted average of all subsidiaries by total annual premiums.

Cons of Blue Cross Blue Shield health insurance:

• Costs are middle-of-the-road: On average, the cost for BCBS health insurance plans usually falls in the middle, and it's neither the cheapest health insurance company nor the most expensive. For a 60-year-old, the average cost of a full-price Silver plan is $1,188 per month.
• Regional variations: The Blue Cross Blue Shield Association is a collection of independently operated companies, so performance will vary. Some of the best-performing subsidiaries are Highmark, BCBS of Rhode Island and BCBS of Minnesota. Some of the worst-performing companies are BCBS of Indiana and BCBS of New Mexico.

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Best short-term coverage

If you have a gap in your insurance coverage, such as after retirement and before Medicare, a short-term policy is a quick way to get benefits. The cost for a short-term plan is usually very low. But plans are not regulated in the same way as traditional insurance. This is important to note because some benefits will be limited, and you may not qualify for a plan because of your age or if you have a preexisting condition.

Seniors should use caution when selecting a short-term policy over other types of health insurance. However, they're a useful solution if you need some coverage for a few months before your Medicare plan or traditional health insurance policy begins. We recommend UnitedHealthcare's short-term plans because they provide some of the broadest coverage within the segment.

Pros of UnitedHealthcare short-term plans:

• Low-deductible options: UHC plans are available with deductibles as low as $1,000. In contrast, many other companies have deductibles that start much higher. Choosing a low-deductible plan can help allow you to get the benefits of your plan much quicker.
• Preventive care included: Unlike with many other short-term policy providers, some plans will cover preventive care services. Deductibles and copayments will apply, and the preventive care won't be free, as it is with a traditional health insurance plan that's compliant with the Affordable Care Act (ACA). However, this is a valuable benefit that gives you more comprehensive coverage.
• Large network of doctors and medical providers: Even though some plans only cover in-network medical care, UHC's large network of providers gives you more freedom about where you get health care while still staying in the network.

Cons of UnitedHealthcare short-term plans:

• Not available for those over 65: The company only offers short-term plans to those aged 19 through 65. Since you become eligible for Medicare at age 65, the plans are best suited for seniors who have a short gap in coverage before they qualify for Medicare.
• Only offered in 24 states: Many short-term insurance companies operate in a limited service area, and UHC is available in about half of the states. Notably, short-term policies are not sold by any company in 11 states and the District of Columbia, including California, Colorado, Connecticut, Hawaii, Maine, Massachusetts, New Jersey, New Mexico, New York, Rhode Island and Vermont.
• High-deductible options have poor coverage: Some plans have deductibles as high as $10,000. This means the plan wouldn't pay out for anything until your out-of-pocket medical expenses surpass $10,000. Even though the cost of these plans is low, making them attractive for retirees with limited incomes, the coverage is worse than a marketplace plan, where your maximum expenses are $8,700.

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Frequently asked questions

When do seniors qualify for Medicare?

At age 65, all seniors will qualify for Medicare, although some people can qualify earlier because of a disability or medical condition.

What’s the average monthly cost of health insurance for a retired couple?

For a senior couple, the average cost of Medicare is $66 per month for two Medicare Advantage plan bundles. That's on top of the $340.20 per month that's automatically deducted from their Social Security for two Medicare Part B plans. Most enrollees don't pay anything for Medicare Part A.

Are health insurance premiums tax-deductible for retirees?

Yes, the cost of Medicare or health insurance is considered a medical expense and is therefore tax-deductible on your federal income taxes. This only applies to plans that you pay for out of pocket and would not include a plan that's paid out of a pension or with a Social Security deduction.

Is retiring a qualifying event for health insurance?

Retiring itself is not considered a qualifying event. However, losing your health insurance coverage is a qualifying event that allows you to sign up for insurance on the health insurance marketplace via a special enrollment period (SEP). You'll usually have 60 days after losing coverage to sign up for a plan. After that, you can sign up in the fall during open enrollment.

How much is health insurance for seniors?

For those aged 60 to 65, the full price for a Silver individual health insurance policy can cost more than $1,000 per month. However, with marketplace plans, the premium tax credit will provide discounted rates for those who have a low to moderate income. After qualifying for Medicare at age 65, health insurance costs are typically $203 per month for both Medicare Part B and Part C.

Methodology

Health insurance plan data was sourced from the Centers for Medicare & Medicaid Services (CMS) public use files and insurance providers. Insurers were compared based on a variety of factors including cost, coverage, benefits and provider networks. Additional sources include:

Medicare Advantage costs only consider plans that include prescription drug benefits. Our analysis excludes employer-sponsored plans, Special Needs Plans, PACE plans, sanctioned plans and Health Care Prepayment Plans (HCPPs).

Medigap costs are based on a 65-year-old female nonsmoker and include estimates from states that have age-based price increases and states where age is not used to determine premiums. The average cost for Blue Cross Blue Shield marketplace health insurance is based on 2022 health insurance plans offered in Arizona, Georgia, Missouri, North Carolina, Ohio, Oregon, Texas and Wisconsin.