Health insurance for seniors continues to become more complex and expensive. According to Fidelity’s 2024 Retirement Healthcare Cost Estimate, a 65-year-old couple retiring in 2024 will need about $330,000 (after taxes) to cover healthcare expenses for the rest of their lives — a 5% increase from the previous year.
The number of adults aged 65 and older is projected to grow from 40 million in 2010 to over 72 million by 2030, intensifying demand on healthcare programs. Healthcare spending accounts for about 18% of the U.S. GDP, with spending for seniors expected to grow substantially as this population increases.
So how will you manage the costs of your care as you enter your golden years? Most senior health care costs are paid for by government programs like Medicare, Medicaid, the Veterans Administration, or by private health insurers.
There are many options out there, so there isn’t one answer for the best health insurance for seniors. Let’s take a look at options for seniors and some things to consider as you decide on the best health insurance coverage for you.
Medicare Options for Seniors
Medicare, the most popular option, is a Federal insurance program for adults 65 and older.
It includes four parts. You are eligible when you turn 65 or have a qualifying disability before age 65. Parts C and D are optional for enrollees.
- Medicare Part A provides hospital insurance. It’s free if you’ve worked 10 or more years and paid Social Security taxes, and all you have to do is fill out an application.
- Medicare Part B is medical insurance that covers doctor visits, annual checkups, mental health care, x-rays and similar medical services rendered outside of a hospital. You are automatically enrolled when you are eligible for Social Security. Part B is not free – the annual premium and deductible will vary from year to year, and there are coverage limits.
- Medicare Part C is also known as Medicare Advantage. This option allows you to get Medicare coverage through private insurance companies that offer qualifying plans. Part C plans must include Part A and B benefits, and may provide better coverage than traditional Medicare. Costs vary by state and provider, so shop around before selecting the Part C plan that meets your needs.
- Medicare Part D is a prescription plan that is available to anyone enrolled in Traditional Medicare or a Medicare Advantage plan. Although optional, it is highly recommended as it can offer significant benefits in managing your prescription drug costs. It comes with a monthly premium based on the amount of coverage the plan offers.
Your own costs as a Medicare patient will depend on a few factors:
- What kind of care do you utilize and how often do you need care?
- What type of Medicare coverage do you use?
- Does your doctor charge only what Medicare will pay or does he/she charge more?
- Do you have other insurance to fill in the gaps and provide for things that Medicare doesn’t cover?
Medicaid for Seniors
Medicaid is medical insurance specifically designed for low-income seniors.
You are only eligible for Medicaid if you have “spent down” available assets. You might want to consult with an elder law attorney or financial advisor for advice on how to qualify for Medicaid.
It is often utilized in conjunction with Medicare, and may cover some medical services and prescriptions not covered by Medicare. Medicaid also covers costs associated with long-term care, nursing home care, skilled care at home, and hospice care.
Medicaid is run by the states and partially funded by the Federal government, so before applying you’ll want to check on the rules governing coverage in your particular state.
Insurance for Military Families
The Federal government also provides medical benefits for active duty service members, veterans and spouses.
Veterans Administration benefits are available to all veterans, at any age, who were honorably discharged. You qualify for VA benefits if you meet one of the following:
- Served at least 2 years on active duty
- Have a service-related disability
- Have served in various war theaters
If you are 65 or older, you may use your VA benefits to complement the care you receive under Medicare.
If you are currently on active duty, you and your family may receive TRICARE benefits. Retired personnel may enroll in Medicare Parts A and B and Tricare for Life, which provides so-called “Medigap” coverage.
Private Health Insurance
If you are 65 or older and still have yet to retire, you may continue to receive health insurance through your employer’s benefits package. Some employer plans continue to provide benefits after retirement as part of a pension.
After retirement, you may purchase individual health insurance from an insurer who offers individual plans. Private health insurance may be paired with Medicare to boost the coverage you receive.
Medicare Supplemental Insurance (Medigap)
Medigap plans are designed to cover out-of-pocket costs not paid by Original Medicare (Parts A & B), such as:
- Coinsurance
- Copayments
- Deductibles
To qualify for Medigap, you must be enrolled in both Medicare Part A and Part B. These plans are sold by private insurers and standardized across most states (Plans A–N), although premiums and availability vary.
Important Notes:
- Medigap does not cover dental, vision, hearing aids, or long-term care.
- Medigap policies do not work with Medicare Advantage (Part C)—you cannot have both.
- The best time to buy a Medigap policy is during your six-month Medigap Open Enrollment Period, which begins the month you’re both 65+ and enrolled in Medicare Part B.
Supplemental Health Insurance (Not Medigap)
Private insurers also offer standalone plans that cover services not included in Original Medicare, such as:
- Dental
- Vision
- Hearing
- Prescription drug coverage (if not using Part D)
- Life insurance
- Hospital indemnity plans
These policies can be purchased at any time, though eligibility and pricing may depend on age and health history. They’re a good option for those who want extra coverage beyond Medigap or Medicare Advantage.
Long-Term Care Insurance
Most assisted living residents in the U.S. pay for care using personal savings, retirement income, or private long-term care insurance. Medicaid may cover some long-term care, but only for those who meet strict income and asset limits.
Long-term care insurance helps cover costs not typically included in Medicare or standard health plans, including:
- Assisted living facilities
- In-home caregiving services
- Nursing home care
- Hospice or palliative care
However, it’s important to note:
- Only a small percentage of older adults currently have a long-term care policy.
- The best time to buy is in your 50s or early 60s—premiums increase significantly with age and declining health.
- Policies may include daily benefit limits, elimination periods, and coverage caps, so compare options carefully.
What’s the Right Health Insurance Plan for You?
If you’re shopping around for a plan to sign up for in the coming year, you want to think about your own health care needs, and the specific features of individual plans you’re considering.
Here are some important questions to ask yourself when choosing a health plan:
- How much can I afford to spend out-of-pocket on health care?
- What pre-existing conditions do I have?
- Do I want more coverage than Medicare alone can provide?
- Do I already have group insurance — for example, through employment, union membership or some other affiliation?
Here are some criteria to look for when comparing the different health specific plans:
- Monthly premiums
- Co-pays and deductibles
- How much of your doctor and hospital bills the plan covers
- Choice of doctors and hospitals
- What if you have an emergency?
- What if you need a doctor after hours?
- Limits on medical conditions covered
Do you have questions about choosing the right health insurance plan for you? Do you need to learn more about insurance for long-term care needs such as assisted living?
Contact Culpepper Place of Olive Branch. We can provide helpful information on health insurance options for seniors, as well as information on paying for assisted living.
