Early retirement gives you a chance to perfect your golf swing, go sailing or simply enjoy the lazy days of summer. Before you start making plans, though, be sure that you have adequate health insurance coverage between now and the day you turn 65. While many employers no longer offer health insurance to retired employees, you still have options to get the coverage you need.
Consider COBRA
If you only have 18 months or less until you turn 65, you might want to pay for continued group health insurance coverage through your employer, using COBRA. In general, COBRA is available to you if you worked for an employer with more than 20 employees. However, you’ll be responsible for the full cost of the premiums and a possible two percent administrative fee. Also, if your former employer goes bankrupt, you’ll lose your coverage.
On the upside, COBRA allows you to keep the same doctors and health insurance coverage that you had before. If you or your spouse has a chronic illness or other condition, keeping the same health insurance policy may be worth the additional expense.
Join a Professional Organization
Some professional organizations offer discounted health insurance policies to members. These policies offer group coverage rates, so they can be less expensive than individual policies. However, the quality and costs of these policies vary widely, so you should do some comparison shopping before purchasing insurance.
Look for an Individual Insurance Plan
In many cases, it may make financial sense to look for an individual insurance plan until you meet Medicare eligibility requirements. If you’d like to keep your premiums low, you might want to consider a high deductible plan. You might have to pay for your own doctor’s visits and initial tests out of pocket, but this type of plan should provide coverage in case you are diagnosed with a serious illness. You can also use a health savings account that works in conjunction with an individual insurance plan to help maximize your savings.
If you do decide to purchase individual health insurance, it’s important to choose a plan with enough coverage for a true medical emergency. Even if you’re healthy now, a cancer diagnosis could devastate your financial future if you’re not properly insured. Examining your family health history is also a good way to assess the type and amount of coverage you’ll need.
Medical challenges, like pre-existing conditions and general poor health, can also affect the price and coverage you can get from an individual insurance plan. If you are in good health but your partner has medical problems, you may want to purchase health insurance coverage from different sources. For example, it may make sense for you to purchase an individual plan, while your spouse uses COBRA to maintain health insurance coverage.
Before setting a retirement date, make sure you have a plan for your continued health insurance coverage. If you’re unsure about the individual and retiree health insurance policies available to you, call 888.279.9701 to get more information and a free Colorado health insurance quote.