Healthcare Options in Early Retirement
For people who want to retire early there is a long list of factors to consider before making it official. Finding a solution for health insurance before you become Medicare eligible at age 65 is close to the top of the list. Below are a few options to explore.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 provides workers and their families who terminate employment with a covered employer the ability to continue their health insurance for up to eighteen months after employment ends. Retiring at age 63.5 means retirees could continue their coverage until Medicare kicks in at age 65.
If your spouse continues to work you may be eligible to be added to their policy. If available, this may be the easiest and most cost-effective way to obtain coverage. Or, some individuals choose to retire from their current position and seek a part-time opportunity that provides them with health insurance.
Retiree health benefits may be offered by your employer. This coverage typically provides retirees access to health insurance in retirement at a group rate, and some employers continue to provide a subsidy. While not all employers offer this benefit, make sure you inquire about whether or not you are eligible for this benefit.
The Affordable Care Act established a public marketplace as a centralized location for insurance providers to offer coverage to those who are not covered through other means. The type of coverage and costs for policies vary, but you cannot be denied coverage for pre-existing conditions. Depending on your income you may also qualify for government subsidies to help cover part of the cost of the policy.
Private insurance is offered through an insurance agent and may have more options than available through the public marketplace. This type of insurance typically is not Affordable Care Act compliant, but may allow you to create a plan that fits your unique needs until Medicare begins.
If you are exploring your ability to retire and have questions about how your healthcare coverage may change, contact us today to learn how we can help you evaluate your options.