Insuring Good Health for Retirees

Insuring Good Health for RetireesWhile there are a number of good things about getting older, obtaining adequate health insurance isn’t one of them. According to the Employee Benefit Research Institute (ERBI), only about 37 per cent of those retiring before age 65 will continue to have now former-employer-based health coverage, and only 27 per cent of those who retire at 65 or older will do so.

Even if you’re thinking that retirement for you is a long way off, just know that, according to experts, Medicare will run out about 2030. Even if you fall into one of the above minorities, you’ll probably be required to pay full premiums, which can be a shocker. Still, though, you’ll be paying a group rate, not individual, and you’ll likely be getting broader coverage than you would with an individual policy.

Even if you’re told that your — and your dependents’ — coverage will end on your last day with the firm, check to see if the federally based COBRA law applies. Under COBRA, certain businesses must offer their former employees insurance coverage, even if at full premium.

Excuse me, but haven’t you ever heard of Medicare?

Indeed I have, Smarty-pants. But Medicare, on the average, covers less than 50% of a senior’s health costs. And that fact brings us to Medigap (Medicare Supplemental) that can be used to fill in some of the cracks. In order to get it with a minimum of fuss (i.e., no physical exam, or questions about your health) be sure to apply for it within six months following your 65th birthday. Medigap offers ten individual and varied plans, each with the same minimum benefits.

If you think it’s likely you may need long-term health care (whether in-home or in a nursing home), be aware that Medicare covers only about 10% of such expenses in the US. That’s when you might turn to Medicaid. To qualify for this, though, you have to fall below the poverty line, which measurement varies from state to state.

OK, grim though that this all may sound, buck up, Sparky! It’s not like there aren’t options.

Options, did you say?

Yep. To begin with, you could try putting aside enough to cover those possible health/long-term care expenses. Per the ERBI again, that would mean saving up about one million dollars to cover such potential costs over the remainder of your life following retirement. This amount, of course, doesn’t include what you’d need for your everyday expenses. Yes, I know – yipes! Well, thank heavens, that’s not the only choice.

So, if your former employer drops you altogether, you can look into private insurance policies (expensive) or a group insurance package, which would prove more economical. Then again, there may be more options. Such as:

How do you feel about further education? You might be able to acquire health coverage by returning to school. Many junior colleges and universities offer relatively inexpensive insurance for their students, and you may only have to take a couple of courses a semester to qualify, just as long as you’re building towards a degree.

Have you wanted to move? I ask because health insurance costs vary from state to state. (This is true for auto and home insurance as well.) The bright side here is that this is true, even for people who are already suffering from ill health. At that, there are countries in both Latin America and Europe with socialized health care, though there could be either a period of residency that must be met, or you may have to marry a native. Then again, that may not be such a sacrifice.

Travel is so broadening . . . and would make you eligible for traveler’s health insurance.

Then again, for those of you in the military, check out TRICARE. Also, have a thorough physical before your retirement date, and fully document any injury you received while serving, however minor. (What’s trivial seeming now could develop into something more serious in the future.) In addition, to protect your chances of a successful later claim, also note any preexisting conditions that became aggravated during this period. If you don’t have such evidence, then you may be unable to make a successful claim later on. Even if you eventually pick up insurance from another employer, as a veteran, you may be qualified for special benefits, so investigate fully.

At that, for those who retire too early to qualify for Medicare, there may be the possibility of “interim” insurance.

In fact, depending on your given profession, and the state where you live, there may be special options open to you, so don’t fail to ask questions!

A few last words . . .

Before beginning your search for the most appropriate coverage, ask yourself the tough questions. “ What kind of health coverage might I need?” (There’s no need to pay for what you won’t likely use.) “What’s my family history like?” If heart problems, say, run in the family, then it would be smart to plan for that eventuality.

As for advice, you’re not in this alone. Contact a trusted insurance agent, scour your Yellow Pages for a local agent, or call the American Association of Retired Persons, also listed in your phone book. Any of these folks can help steer you in the right direction, answering your questions, and even helping you to decide what questions to ask.

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