When you’re planning for retirement, you may not think that health insurance is an issue since Medicare exists. However, Medicare is generally only for those who are 65 and older, or those who meet certain other eligibility criteria. If you retire before you’re eligible for Medicare, you’ll have to find an alternative source of coverage.
Maintaining health insurance when you retire is essential for your financial security since your health needs increase as you age. Without insurance, you could be on the hook for thousands in medical bills. For example, the average cost per hospital stay is $11,700, while treatment for cancer can cost hundreds of thousands of dollars.
To help you find the right coverage for you during retirement, we examined 18 providers of health insurance geared toward seniors. We evaluated these providers based on their coverage options, costs, and provider networks. Here are our choices for the best insurers.
Best Overall : UnitedHealthcare
Our choice for the best overall insurance provider for retirees is UnitedHealthcare because of its comprehensive coverage options that go above and beyond the limits of Medicare. With UnitedHealthcare, you can get worldwide coverage and vision, dental, and chiropractic care.
You have coverage when traveling outside the country
Additional services are covered
Immunizations and preventative services are 100% covered
Only available to those eligible for Medicare
Additional premium required
There may be location limitations
While Medicare is a valuable insurance option, it has limitations. It doesn’t include prescription drug coverage, medical care received outside of the United States, or dental or vision care. If you want those services covered, you can opt for a Medicare Advantage Plan, also known as Medicare Part C.
UnitedHealthcare is the largest provider of Medicare Advantage Plans, with 26% of Medicare Advantage beneficiaries enrolled in the company’s plans. It also has an A (Excellent) rating from AM Best.
UnitedHealthcare offers both HMO and PPO plans, so you can choose a provider network that meets your needs. With a Medicare Advantage Plan from the company, you get coverage when traveling outside of the United States, and immunizations and preventative care are completely covered at no additional cost. Depending on your location and the policy you choose, UnitedHealthcare plans may cover the following services:
- Hearing aids
- Vision care
- Dental care
- Chiropractic visits
- Fitness club memberships
- Caregiver resources
- Medical transportation
Medicare Advantage Plans are only available to individuals who qualify for Medicare. You may have to pay an additional premium for your plan depending on the policy and deductible you choose. Some Medicare Advantage Plans have regional restrictions, so double-check your policy if you spend months out of the year in a different location, such as spending the winter in the southern states.
If you are eligible for Medicare, enrolling in a Medicare Advantage Plan from UnitedHealthcare is a good way to ensure you have a complete health insurance plan that goes beyond Original Medicare’s covered services. It’s our pick for the best overall provider because of its robust coverage options, expansive provider networks, and extra covered services.
Best for Supplementing Medicare : Humana
If you have coverage through Medicare, our choice for the best supplemental policy is Humana. Humana’s Medicare Supplement Plans—also known as Medigap—help pay for your remaining health care costs, and plans may also cover extra services like foreign travel or your nursing care coinsurance.
Multiple plans to choose from
You can choose any healthcare provider
Majority of your Medicare costs covered
Does not include prescription drug coverage
Monthly premiums can be high
Not available in all locations
If you’re 65 or older, you may not think that you need additional coverage since you qualify for Medicare. However, Medicare isn’t free healthcare. In fact, a 65-year-old couple that retired in 2019 can expect to pay $285,000 in healthcare and medical expenses during their retirement.
A Medigap policy can help cover your health costs, such as your Medicare deductibles, coinsurance, or copayments.
Humana is one of the top Medigap providers, offering a user-friendly website that allows you to easily search through the company’s Medigap plans. With a Humana Medigap policy, you can see any healthcare provider you wish that accepts Medicare, without having to worry about networks. Depending on which plan you choose, the majority of your Medicare costs may be covered. Humana has an A- (Excellent) rating from AM Best.
However, Medigap policies don’t include prescription drug coverage, and your monthly premium may be expensive. For example, a Medigap Plan C from Humana with a $0 deductible is $291.82 per month for a woman in California.
Humana is not licensed to offer Medigap policies in all states, so check to see if plans are available where you live.
Humana is our choice as the best Medigap provider for its customizable coverage options, allowing you to adjust your deductible to meet your needs and keep the healthcare providers you trust.
Best for Low-Income Seniors : Medicaid
If you are a low-income senior, the best way to get health insurance is through Medicaid, a federal insurance program. With Medicaid, you can get free or low-cost coverage.
Low or $0 premiums for low-income seniors
Covers services that Medicare doesn’t
Provides a financial safeguard
Income restrictions apply
Some states have cost-sharing programs
You may not qualify if you’re under 65
Medicaid is a federal program for low-income individuals and people with disabilities. It provides coverage to 7.2 million seniors who are also enrolled in Medicare.
Through Medicaid, eligible beneficiaries can get financial assistance with their Medicare premiums and out-of-pocket medical expenses, such as your deductibles or copayments. It also covers services that Medicare doesn’t, such as prescription medications, eyeglasses, and hearing aids. If you have a medical emergency, such as a serious illness, Medicaid provides an essential safeguard.
However, not everyone qualifies for Medicaid. To be eligible, you must meet your state’s income restrictions. Typically, you have to make no more than 135% of the federal poverty level to qualify for Medicaid assistance.
Some states will insure adults who are not yet eligible for Medicare through Medicaid, but not all do. If you live in a state that hasn’t expanded its Medicare coverage, you may not qualify for assistance until you reach 65.
For low-income individuals, Medicaid is our top choice for health insurance. You can get comprehensive coverage and may pay as little as $0 per month.
Best Short-Term Coverage : Golden Rule Insurance Company
The top pick for short-term insurance for retirees is the Golden Rule Insurance Company. Offering low monthly premiums, the Golden Rule Insurance Company is ideal for people who retire early and need to bridge the gap until they’re eligible for Medicare.
Low monthly premiums
Coverage can start as quickly as the next day
You can enroll at any time
You can be denied for pre-existing conditions
Coverage may not cover some necessary services
Short-term coverage may not satisfy state-level requirements
If you retire before you turn 65, short-term insurance can give you some protection until you’re eligible for Medicare.
The Golden Rule Insurance Company is backed by UnitedHealthcare, which has an A rating from AM Best and specializes in short-term insurance policies. With a short-term policy from the company, you can get health insurance to protect against emergencies at a cost that is significantly cheaper than private insurance.
Golden Rule Insurance Company has plans available for as little as $47 per month. Unlike Medicare or private insurance, you don’t have to wait until Jan. 1 for your coverage to begin; your coverage can start as soon as the day after you purchase your policy. You can enroll in a short-term plan at any time, without having to wait for an annual Open Enrollment period or qualifying for Special Enrollment.
However, the Golden Rule Insurance Company can deny you for pre-existing conditions, and short-term plans don’t have to cover all of the same benefits that private insurance does. While there is no longer a federal mandate for minimum essential coverage, some states still have mandates. Short-term plans don’t typically satisfy the minimum essential coverage requirement, so you may owe a penalty when you pay your state taxes.
If you have one to three years until you’re eligible for Medicare, purchasing a short-term insurance plan from the Golden Rule Insurance Company can give you coverage during times of transition.
It’s the top choice for short-term insurance because it’s backed by UnitedHealthcare, one of the largest and most reliable insurance companies in the country. And, plans are affordable, costing significantly less than other insurance plans for retirees.
Best for Under 65 : Cigna
If you plan on purchasing private insurance through the Health Insurance Marketplace, Cigna is our top choice. You can get comprehensive coverage, even if you have pre-existing conditions, and Cigna offers perks like $0 virtual care 24/7 access to nurses and doctors.
Financial assistance programs available
No referrals needed for specialists
$0 virtual visits with doctors
Not everyone will qualify for subsidized premiums
Does not offer plans in all states
International coverage must be purchased separately
Cigna is one of the largest insurance companies on the Health Insurance Marketplace, with over $29 billion in premiums written in 2018. When comparing plans on the Health Insurance Marketplace, Cigna stands out from its competitors with its extra perks and benefits.
Cigna members get $0 virtual care, where you can connect with a doctor via phone or video chat with no additional out-of-pocket cost. Regardless of what type of provider you choose, you don’t need referrals to see a specialist, but your primary care physician can recommend a specialist to you that is within the network to help you save money. If you’re diabetic, you’ll pay no more than $25 out-of-pocket for a 30-day supply of covered insulin. And, Cigna’s diabetes care plans offer additional benefits with $0 out-of-pocket costs.
Cigna also offers separate international coverage. If you frequently travel outside of the country, you can purchase international insurance to make sure you’re covered.
Cigna also has a financial assistance program. According to the company, three out of four customers receive help with their plans, and nearly half of those customers pay less than $100 per month.
However, not everyone will qualify for subsidized premiums, so you may be responsible for the full cost yourself. While Cigna’s group and dental plans are available throughout the country, full coverage plans purchased through the Health Insurance Marketplace are not available in all states. For 2021, Cigna is only available in Arizona, Colorado, Florida, Illinois, Kansas, Missouri, North Carolina, Tennessee, Utah, and Virginia.
Cigna is the best choice for people under the age of 65 because of its comprehensive coverage options for people with pre-existing conditions. As a retiree, you can enjoy added benefits as a Cigna customer, and can even qualify for cost-saving programs.
How Do I Get Health Insurance When I Retire?
When you retire, you have multiple options for health insurance:
Medicare: When you turn 65, you are eligible for Medicare, an insurance program operated by the federal government.
COBRA: When you leave your job, you have the option of extending your employer-offered health benefits through the Consolidated Omnibus Budget Reconciliation Act (COBRA). With COBRA, you can continue your coverage for 18 to 36 months.
Health Insurance Marketplace: You can purchase private insurance under the Affordable Care Act on healthcare.gov.
Short-term coverage: Private insurance companies often sell short-term coverage, which is a form of temporary insurance you can use to bridge the gap until other coverage goes into effect.
Do I Need Health Insurance If I Have Medicare?
While Medicare is an excellent option for retirees, you won’t qualify for it until you turn 65. If you retire before that date, you’re responsible for getting your own coverage.
However, even eligible Medicare beneficiaries may need additional insurance.
Medicare covers a large portion of your health expenses, but it doesn’t pay for all of your necessary medical services. Original Medicare—which is made up of Medicare Part A (hospital insurance) and Medicare Part B (medical insurance)—doesn’t cover:
- Dental care
- Hearing aids
- Long-term care
- Prescription drugs
- Routine foot care
If you want insurance that covers the above services, you’ll need additional coverage, such as a Medicare Advantage Plan.
What Does Health Insurance for Retirees Cost?
When it comes to health insurance as a retiree, your costs depend on what insurance options you choose and your age.
Original Medicare: There are two parts to Original Medicare:
- Part A: You won’t pay a premium for Medicare Part A as long as you or your spouse paid Medicare taxes for a certain amount of time. If you aren’t eligible for premium-free Part A, you can purchase Part A coverage. It costs $252 to $458 per month as of 2020.
- Part B: All beneficiaries have to pay a premium for Part B coverage. The standard Part B monthly premium is $144.60 per month, but it can increase based on your income.
Medicare Advantage Plans: If you opt for a Medicare Advantage Plan, you may have to pay a monthly premium in addition to your Part B premium. The average monthly premium for a Medicare Advantage Plan is $25.
Health Insurance Marketplace Plans: If you purchase insurance through healthcare.gov, your monthly premium cost is dependent on what tier you choose, the provider network, your selected deductible, and whether you are eligible for a subsidy. The average marketplace benchmark premium is $478 per month.
COBRA: With COBRA, you can continue your employer-offered insurance policy, but you’re responsible for paying the entire premium yourself. The average premium for single coverage is $599 per month, or $7,188 per year.
Short-term coverage: Short-term coverage tends to be inexpensive, costing just $116 per month, on average.
How We Chose the Best Health Insurance for Retirees
To identify the best health insurance companies for retirees beyond Medicare, we looked at 18 providers of Medicare Advantage Plans, Medigap policies, private insurance, and short-term coverage. We evaluated each company based on their coverage options, costs, benefits, and financial stability for seniors to select the top five companies.