Will I Have Health Insurance When I Retire?
Getting insurance after you retire can be challenging if you retire before the age of 65. At 65, you become eligible for Medicare health coverage. However, before 65, your options may be limited. Because health insurance is so important, particularly as you advance in age, you should be sure to have a plan for coverage before you retire early. Make sure you will have access to coverage at least until you reach Medicare eligibility.
The best option for extending health care benefits past retirement is to join your spouse’s employer sponsored health plan. This is almost always the most affordable option. Before you rely on your spouse’s health insurance to carry you until you’re 65, however, consider if you spouse will be in that job until then and whether the business is stable and reliable. If your spouse suddenly loses that job, both of you will be without health insurance.
Some employers extend health benefits to their retired employees. This is often a good option for continuing your health care. Be aware, however, that these plans are not usually the same plan you have become accustomed to as a working employee. Usually these plans offer reduced coverage and require increased premiums. Sometimes you will have to pay the entire premium without any employer subsidizing. It’s important to find out exactly what is covered under your employer’s retirement health benefits and what is not. If you are on expensive medication, for example, make sure prescriptions are covered. Find out if there is a lifetime cap on coverage as well. A major illness or heart attack can quickly drain your coverage leaving you without insurance. Finally, find out if the coverage has a time limit. Some of these plans are only available for a year or two after retirement. You want to make sure you’re covered until the age of 65.
If you worked in a business with 20 or more employees before you retired, you may be eligible to purchase COBRA (Consolidated Omnibus Budget Reconciliation Act) insurance. You are only eligible if your employer offered group insurance to employees, however. These plans are more expensive than regular group insurance, but they are less than individual plans. The only catch is, they are only available for 18 months after retirement.
If you don’t have access to group health insurance, you may have to purchase an individual plan. These plans are going to cost a fortune in premiums, however, because of your advanced age. Most insurers will consider you a high risk particularly if you have a history of health problems. In order to get coverage, you may have to waive treatment of pre-existing conditions and pay for treatment of those conditions out-of-pocket. This is probably the most expensive option and should be your last resort for health insurance.
Finally, if none of these options work for you because of lack of funds or ineligibility, you can look to your state assistance programs for help. Medicaid is available for low-income seniors that meet eligibility requirements. Coverage and cost varies from state to state, so you have to research what is available where you live. No matter what, you cannot go without health insurance. A catastrophic illness or accident could ruin you physically and financially, and unfortunately the older you get, the more likely you are to get sick.
