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Understanding What This Information Guide Covers

The AARP UnitedHealthcare Information Guide is a free educational resource that presents information about health insurance options that may be available to people age 65 and older. This guide does not make determinations about who can join a plan or process any official requests. Instead, it serves as a starting point for learning how different types of health coverage work and what features various plans may offer.

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The guide focuses on Medicare-related coverage options, including Original Medicare, Medicare Advantage plans, and prescription drug coverage. According to the Centers for Medicare & Medicaid Services, as of 2024, approximately 68 million Americans are enrolled in Medicare, making it the largest health insurance program for seniors in the United States. Understanding the different parts of Medicare and how they work is an important first step before exploring specific plan options.

AARP partners with UnitedHealthcare to produce this informational material. The guide is designed to present factual information in language that is straightforward and easy to follow. It explains concepts like deductibles, copayments, coinsurance, and out-of-pocket maximums—terms that appear in nearly all health insurance plans. These terms affect how much you will pay when you receive medical care, so understanding them matters.

The guide also addresses common questions that people have when they first start learning about Medicare. Many people have been covered by employer health plans for most of their working lives, and the Medicare system works differently in several important ways. This guide helps bridge that gap by explaining how Medicare differs from private health insurance that people may have had before turning 65.

Practical Takeaway: Before contacting any insurance company or visiting any website, read through this guide to build your basic understanding of how Medicare coverage works and what different plan types may offer.

The Different Parts of Medicare and How They Work

Medicare is divided into four different parts, and each part covers different types of medical services. Understanding what each part does is essential because the coverage gaps in one part may be filled by another part. The guide explains these divisions clearly so that people can understand which services fall under which coverage.

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Medicare Part A covers hospital care. This includes inpatient hospital stays, skilled nursing facility care, hospice care, and home health services. According to Medicare.gov, Part A is funded through payroll taxes that workers pay during their working years. Most people age 65 and older receive Part A automatically without paying a monthly premium, though there is a deductible that applies when you are hospitalized.

Medicare Part B covers medical services and outpatient care. This includes visits to doctors, outpatient hospital services, medical equipment, and laboratory tests. Part B requires a monthly premium, which varies based on your income. In 2024, the standard Part B premium is $174.70 per month, though some people pay more if their income exceeds certain thresholds. Part B also has an annual deductible and coinsurance amounts.

Medicare Part D covers prescription drugs. Unlike Parts A and B, which are offered directly by the federal government, Part D coverage comes through private insurance companies. There are many different Part D plans available, and they cover different sets of drugs at different costs. The guide explains how formularies work—these are the lists of drugs that each plan covers—and how to compare plans based on the medications you currently take.

Medicare Part C, also called Medicare Advantage, is an alternative to Original Medicare. With Medicare Advantage, private insurance companies offer coverage that includes Parts A, B, and sometimes D all in one plan. These plans often include additional benefits like dental or vision care, but they typically have network restrictions similar to HMO or PPO plans from employer health insurance.

Practical Takeaway: Create a list of the doctors you currently see and the medications you currently take. As you read about different Medicare parts, mark which of your medical needs would be covered by each part so you understand the full picture of your coverage.

Comparing Original Medicare With Medicare Advantage Plans

One of the most important decisions people face when entering Medicare is whether to stay with Original Medicare or switch to a Medicare Advantage plan. The AARP UnitedHealthcare guide explains the key differences between these two approaches so that you can think through which model might suit your situation better.

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Original Medicare means that Medicare (run by the federal government) pays for your hospital care through Part A and medical services through Part B. You can go to any doctor or hospital that accepts Medicare, which includes the vast majority of providers across the United States. You pay the deductibles and coinsurance amounts set by Medicare, and these amounts are the same no matter where you receive care. However, Original Medicare does not include prescription drug coverage, so you must join a separate Part D plan if you want that coverage. Original Medicare also does not cover services like dental care, vision care, hearing aids, or fitness programs—unless you purchase a supplemental insurance policy called Medigap.

Medicare Advantage plans operate differently. A private insurance company contracts with Medicare to provide all your Part A and Part B coverage through one plan. Many Medicare Advantage plans also include Part D prescription drug coverage. The trade-off is that you must use doctors and hospitals that are in the plan's network, similar to an HMO plan. Your out-of-pocket costs depend on which plan you choose, but many Medicare Advantage plans have lower premiums and lower out-of-pocket costs than Original Medicare plus Medigap. However, if you travel outside your service area or need care from out-of-network providers, you may owe more money.

The guide provides a side-by-side comparison of these features. For example, it shows that Original Medicare offers more freedom to choose providers but may cost more overall if you need frequent medical care. Medicare Advantage plans limit your provider choices but may offer lower costs and additional benefits. The "right" choice depends on your health status, which doctors you see, whether you travel frequently, and your budget.

According to the Kaiser Family Foundation, as of 2024, approximately 28 million Medicare beneficiaries are enrolled in Medicare Advantage plans, representing about 42% of all Medicare beneficiaries. This means that many people have chosen this option, though it is not the right choice for everyone.

Practical Takeaway: Write down whether your current doctors and hospitals would be in-network for any Medicare Advantage plans you are considering. If you frequently travel or have specialists you want to keep, note whether Original Medicare's flexibility would be worth the higher costs.

Understanding Costs: Premiums, Deductibles, and Out-of-Pocket Limits

One reason people struggle with Medicare decisions is confusion about the different types of costs involved. The information guide breaks down each type of cost so that you understand what you will pay and when. This matters because the total amount you spend on healthcare depends on understanding all these pieces.

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A premium is the amount you pay each month to have insurance coverage. With Original Medicare, you pay a Part B premium (standard amount is $174.70 in 2024, though some pay more based on income) and a Part D premium if you join a prescription drug plan. The Part D premium varies by plan, ranging from about $5 to $100+ per month depending on which plan you choose. With Medicare Advantage, you pay a plan premium, which can be as low as $0 but more commonly ranges from $20 to $100+ per month.

A deductible is the amount you must pay out of your own pocket before insurance starts paying. Original Medicare Part B has an annual deductible of $240 in 2024. This means that before Medicare begins to pay for Part B services like doctor visits, you must pay $240 yourself. Different Medicare Advantage plans have different deductibles, ranging from $0 to several hundred dollars depending on the plan.

Copayments and coinsurance are amounts you pay when you receive care. A copayment (or copay) is a flat dollar amount—for example, you might pay $20 for a doctor visit. Coinsurance is a percentage of the cost—for example, you might pay 20% of the cost of an outpatient surgery while Medicare pays 80%. With Original Medicare Part B, you generally pay 20% coinsurance after you meet your deductible. With Medicare Advantage, copayments and coinsurance vary by plan.

An out-of-pocket maximum is the most you will have to pay in a year for covered services. Once you reach this amount, your insurance pays 100% of covered services for the rest of that year. In 2024