Health Insurance in Retirement

When I think about retirement, I think about being healthy so I can be active and enjoy life.  Many fear having a major health problem that will wreck their retirement financially.  When one has a health problem, one wants to get the best medical care available. 

Part of the concern is about health insurance.  We equate the quality of care with the quality of health insurance.  For most people over 65, this is Medicare, which I will talk more about in another video. 

But what if you retire before you are 65?  The answer depends on your specific situation. 

If your employer provides retiree health benefits, you may be able to stay on the company’s plan.  If your employer does not provide retiree health benefits (and most do not), you may want to consider COBRA for up to 18 months.  You can stay on your former employer’s policy, but you have to pay the entire premium.    

Another option may be an individual health policy through the Affordable Care Act Market Place.  To qualify for an Affordable Care Act policy, you must apply within 60 days of losing coverage from your employer.  A good thing about these policies is that pre-existing conditions are covered.  So if you have heart problems, diabetes, cancer … everything is covered.

If you are healthy and have no pre-existing conditions, you may want to consider a short-term medical policy.  There is a type of short-term policy that can last up to 3 years.  These policies are medically underwritten.  So if you have existing health problems, you may be declined.  Even if you are issued a policy and have a claim, the insurance company may check your past medical records to see if the claim is connected to a pre-existing condition.  Premiums for these policies are considerably less than those of Affordable Care Act policies.

What if you are 65 and are not ready to retire?  Maybe your spouse is younger, and you don’t want to retire until he or she is eligible for Medicare.  Or maybe you need to continue working to build up your big bag of money before retiring.

If you continue working past 65, should you sign up for Medicare?  You are automatically enrolled in Part A of Medicare, but you do not need to enroll in Medicare Part B as long as you are covered on your employer’s group policy.  The benefit of staying on the employer’s group plan is you do not have to pay the Medicare Part B premium.  Also, if your spouse is under 65, he or she can be covered by your employer’s group health plan.

Health insurance for retirees under the age of 65 can be complicated and depends on your unique situation.  For help sorting through your options click the button below.