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Health Insurance and Senior Citizens

Seniors have more options when it comes to obtaining health insurance than any other segment of the population. Here’s some information about, and expert advice for, each of them.

senior citizens with health insurance

Buying health insurance tends to be a rather joyless experience for a lot of people, no matter how young or old they may be.

That certainly seems to have been the experience of Gail Cavanaugh, an agent with Columbia, South Carolina-based Colonial Life, who admits that “choosing a health plan today is an overwhelming task.”

Given the sheer number of options that are available to American seniors when it comes to this process, the argument could be made that seniors have it quite a bit worse than younger folks.

After all, it isn’t out of the question for today’s seniors to find themselves contemplating one or more of the following forms of health insurance as they age: retiree coverage, other private insurance, Medicare, and Medicaid.

Coming to grips with each of these offerings should be a little easier for you and your loved ones once you’ve made your way through the following descriptions and explanations.

Retiree Health Insurance

Some seniors don’t have a whole lot to worry about in terms of acquiring health insurance when they retire. Many are able to keep the coverage they first obtained via their employers even after they retire.

These folks tend to be fairly small in number, though, as the majority of employer health plans end when the people attached to them retire.

If you’re lucky enough to be included among this select—and dwindling, it seems—group of seniors, there are a few things you should know about the situation:

  • According to, if you have retiree benefits, you can rest assured that you’re covered under the Affordable Care Act. This means you won’t be penalized like those who lack adequate health insurance.
  • You’re free to buy health insurance elsewhere if you’re currently enrolled in some sort of job-based plan. But doing so will make you ineligible for the kinds of tax credits and other savings that may be offered to you otherwise based on your income.
  • The above is true only if you’re enrolled in such a plan; if you’re eligible but not yet enrolled, you can still access these credits and savings if you qualify.
  • If you’re making use of retiree health insurance through a former employer and you decide to drop that coverage, you won’t qualify for a special enrollment period that allows you to buy a marketplace or exchange plan outside of the government’s open enrollment period.

Don’t forget that private-sector employers are under no obligation to offer retiree health insurance. Most of those that decide to provide them can cut or eliminate those plans at any time. But not if they've made specific promises that they will maintain them.

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Marketplace Plans

A far more likely situation than the one above for most American seniors is that they may retire early but still need health insurance until they turn 65, which is when they’ll become eligible for Medicare.

Some employers will help fill this gap by extending a person’s job-based health insurance until he or she turns 65. But a more typical scenario is that thyou'd have to purchase this temporary coverage on your own. And usually via the federal health insurance marketplace or the related state “exchanges.”

A couple of notes related to this course of action:

  • If you lose your employer-based health plan when you retire, you will be able to take advantage of a special enrollment period when you go to use the above-mentioned marketplace or exchanges. This means you don’t have to wait until open enrollment—a three-month window that for 2017 opens at the beginning of November this year and closes December 15—to apply.
  • Speaking of the application process, when you fill out yours, you’ll not only find out if you qualify for tax cuts or other savings based on your income or household size, but you’ll also find out if you qualify for Medicaid coverage. (More information on the latter can be found below.)

The Many Forms of Medicare

Once you turn 65, though, you’ll probably drop any marketplace plan you may have picked up in the preceding years in favor of some form of Medicare, which is the federally backed health insurance program for seniors who are older than 65 and who spent at least 10 years working full time. (It also supports some younger people who receive Social Security disability benefits.)

Here’s where things can get a bit complicated, unfortunately. That’s because there isn’t just a single policy or product related to Medicare. Instead, it’s divided into four parts that usually are referred to as Part A, Part B, Part C, and Part D. And just to add even more confusion to the situation, there’s a related form of coverage known as Medicare supplement insurance, or “Medigap.”

As difficult as it may be to wrap your head around all of these Medicare-related options, you’re going to want to give it your best shot, as Rachel Kenselaar, co-founder of, says that “the first step in selecting a health plan is understanding the difference between Medicare and Medicare Advantage plans.”

Speaking of which, here is some additional information about both of those health insurance options and more:

Medicare Part A

Also commonly referred to as “hospital insurance,” Medicare Part A covers many of the costs associated with in-patient hospital stays, care that’s provided in skilled-nursing facilities, hospice care, and some instances of home health care.

There are some limits placed on this coverage, of course, but it’s hard to complain about that fact when you consider that it’s made available to most people free of charge.

By the way, if you’re receiving Social Security benefits when you become eligible for Medicare (which is a seven-month period that surrounds your 65th birthday), you’ll be automatically enrolled in Medicare Parts A and B.

Medicare Part B

This form of Medicare often is called “medical insurance,” which makes sense given that it covers all sorts of outpatient medical services like:

  • Doctor’s visits
  • “Durable” medical equipment and supplies (think blood sugar monitors, CPAP devices, hospital beds, walkers, and wheelchairs)
  • Laboratory and diagnostic tests
  • Mental health care and treatment
  • Various kinds of preventative care (such as flu and pneumonia vaccinations), and more

Unlike Medicare Part A, Part B usually isn’t free and has both monthly premiums and small deductibles associated with it (although private Medigap insurance can pick up some or all of the latter).

Also, while Part B is optional, if you decide to opt out of it when you first enroll in Medicare but later decide you’d like to buy the coverage, your premium will be higher than it would’ve been otherwise. This is because of a penalty that’s imposed on people who are actively working and receiving health insurance from an employer fail to purchase it.

When contemplating Medicare Parts A and B, Kenselaar says, remember that neither of them “cover most dental care, dentures, eye exams related to prescription glasses, hearing aids, prescription drugs, or long-term care.”

So, she adds, it’s important to understand what supplemental policies exist—such as Medicare Part D and Medigap, both detailed below--and the alternatives offered through Medicare Advantage plans.

Medicare Part C

These “Medicare Advantage” plans basically serve as an alternative to or substitute for Medicare Parts A and B.

They’re offered by private insurance companies who contract with, and receive compensation from, the federal government.

Other than that, the main differences between Medicare Advantage plans and the coverage associated with Medicare Parts A and B are that people who choose the former option:

  • Typically, are forced to name a primary care physician and use a select network of healthcare providers—such as through a health maintenance organization (HMO) or a preferred provider organization (PPO)—except for in specific situations or emergencies.
  • May be given access to various benefits that aren’t included in Medicare Parts A or B, such as vision, dental, or prescription drug coverage.
  • Are not allowed to buy Medicare supplemental insurance, aka Medigap, plans. (Only people who have Medicare Part A and B plans can purchase these.)

Medicare Part D

At long last, we’ve come to Medicare Part D. These plans help people who are enrolled in Medicare Parts A and B pay for prescription medications, a cost that isn’t covered by the aforementioned forms of Medicare.

Although they’re approved and regulated by federal government, they’re provided to members of the public by private insurance companies. Also, like Medicare Advantage plans, and unlike Medicare Parts A and B, Part D coverage isn’t standardized. That means that different plans will cover different medications to different extents.


As for Medigap (or Medicare supplement insurance) policies, they’re also sold by private companies.

They exist to fill the coverage gaps that are left open by Medicare Parts A and B. Specifically, Medigap plans can help people pay some of the co-insurance costs and deductibles related to their care.

Four things to keep in mind if you’re thinking of purchasing this kind of coverage:

  • After you turn 65 and you enroll in Medicare Parts A and B, you’ll have six months to pick up any Medigap policy that’s sold in your state, regardless of your health status.
  • Monthly premiums are associated with Medigap plans, just like they’re associated with Medicare Part B.
  • Only one person can benefit from this form of coverage. (In other words, if you have a spouse, he or she will have to buy their own Medigap plan.)
  • You can’t buy Medicare supplement insurance if you already have a Medicare Advantage policy.

For more information on this kind of coverage, read our “Medigap Insurance Policy FAQ.”

Before You Buy a Medigap Policy…

When choosing a supplemental policy provided by a private insurer, eCaregivers’ Kenselaar and Sarah O'Leary, CEO and founder of Exhale Healthcare Advocates, suggest putting a bit of time into the following:

Ask yourself, "What are my current and anticipated medical needs, and what policy is the best value for me?" For instance, O'Leary says, “If a patient is in need of a hip replacement in the next year, he should bear that in mind when considering his supplemental plan choice for the upcoming year.”

Adds Kenselaar: “Everyone’s financial situation and health condition are different so write down what coverage is important to you and ask lots of questions before enrolling in a health plan.”

Get objective advice when choosing or changing your supplemental policy. “AARP, for example, recommends a United Healthcare supplemental policy for its members,” she shares. “Most members don't realize that AARP is paid for that endorsement based on how many AARP members enroll in the program. This makes the advisement less than unbiased. Further, most insurance brokers are paid by insurance companies and may have a compromised point of view.”

As for what O’Leary would recommend instead, that would be for seniors to do “careful, objective research on their own. Family members who have the ability to understand the complexities of the Medicare system may be of help, and professional independent advocates can be extremely helpful, too.”

Kenselaar also recommends roping family and friends into the situation, as well as “[going] to the local senior center and [finding] out about their experiences with Medicare and Medigap plans.”


This health insurance program, unlike Medicare, is administered by individual states—although it was set up, and is partially funded, by the federal government.

Also, rather than being an entitlement program (people are entitled to it because they helped pay for it through taxes) like Medicare, Medicaid is provided to those in need.

In particular, it’s provided to various segments of the population—including seniors, children, pregnant women, and people with disabilities--who have limited incomes and resources.

One of the peculiarities related to Medicaid is that many seniors have to “spend down” the bulk of their assets before they can benefit from its assistance. This can can be summed up by saying it pays for many of the same services that tend to be covered by Medicare as well as the majority of the costs associated with long-term care provided by skilled-nursing facilities, hospice care, and some home health services.

That’s an overly basic look at what Medicaid can provide to seniors, though, as the services covered by the program varies from state to state. To learn more about how Medicaid works where you live, go to State Medicaid & CHIP Profiles.

Additional Expert Advice

Here are a few final words of wisdom courtesy of Colonial Life’s Gail Cavanaugh, eCaregivers’ Rachel Kenselaar, and Exhale Healthcare Advocates’ Sarah O'Leary.

Seek assistance, if needed

Kenselaar and O'Leary already mentioned this piece of advice in regard to choosing a Medigap policy, but Cavanaugh suggests it also should be heeded when contemplating the other forms of health insurance likely to be considered by seniors.

“Health insurance contracts are very complicated,” she says, and “insurance agents are trained in helping to interpret them and in meeting compliance issues.”

Review your plan every year

“Seniors absolutely should review their health plans each year,” Kenselaar suggests, “and for one simple reason: our health is unpredictable and seniors’ needs can change from one day to the next.”

As part of this annual review, she recommends asking yourself the following questions:

  • Have I started taking new prescription drugs?
  • Have I started visiting any new specialists (particularly out-of-network providers)?
  • Have I been diagnosed with a new illness?

O’Leary is another proponent of such reviews, especially for seniors who are enrolled in a Medicare Advantage, Medicare Part D, or Medigap plan.

“The drug formularies—the list of drugs included in one's policy--and plan benefits of privately insured Medicare plans change constantly,” she says. “The drug that was covered last year might not be this year, and the breadth of coverage can change.”

Another reason you should give your plan a thorough look every year when open enrollment seasons rolls around, O’Leary adds: doing so “can save [you] thousands in the long run.”

Remember: everything’s negotiable

“Most people, seniors included, don't look to negotiate the price of their non-emergency care, medical devices, and prescription drugs prior to the receipt of their services, devices, and drugs,” O’Leary says.

If that describes you, reconsidering your non-negotiable stance could save you a lot of money. “The mark-up on hearing aids is over 100 percent in some areas, and that price can be negotiated,” she explains. “Shopping around the price of prescription drugs can also lead to big savings.”

Don’t ignore long-term care insurance

A “common and dangerous” misconception many seniors have is that “the cost of hiring a caregiver for custodial care--assistance with personal hygiene, meal preparation, running errands--is covered by Medicare,” Kenselaar says.

Unfortunately, it isn’t—yet 70 percent of Americans over 65 are expected to need some sort of long-term care in their lifetime, according to MetLife’s 2012 Market Survey of Long-Term Care Costs.

Seniors could avoid some of the expenses that are related to long-term care if they planned ahead and purchased a long-term care policy or added a long-term care rider to their life insurance policies, she adds.

Cavanaugh also calls for more seniors and their loved ones to consider this form of insurance, especially if they have a significant estate. “Many seniors overlook long-term care coverage for [these] expenses,” she says, despite the fact that “plans are less expensive at younger ages.”

For more information about this type of insurance, check out our “Long-Term Care Insurance FAQ.”

Appeal any claim denials that may come your way

That’s another of O’Leary’s suggestions, who says that “seniors owe it to themselves to appeal any denial of claim or service by the government or their private insurer.”

The typical claim denial will be overturned after just a few attempts, she adds, “so it's important to keep appealing denials. Help from a loved one or professional advocate can help this process become less of a burden on the senior.”

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