Best Retiree Health Insurance

Which Type of Insurance Is Most Important for Retired Persons

Retirement is a stage in life when everything changes. From travel plans to daily schedules and living situations, there are often a lot of moving pieces. One of the less exciting but incredibly important changes is a retiree’s health insurance coverage and the policies that need to be added, dropped or changed.

There are some types of insurance that are less important for individuals coming into retirement. One of the most obvious types that is not at all necessary for retirees to have as a part of their coverage plan would be disability insurance.

Once seniors have stopped working and officially enter retirement, disability insurance essentially becomes pointless. Most retirees will choose to relocate the money they previously were spending on disability coverage to other forms of insurance that will serve to keep them stable into retirement.

When we are talking about which type of insurance is most important for retired persons, the answer is somewhat obvious. Medical insurance is for many reasons the most important coverage for retirees to have in place. Increasing health care costs in combination with the unavoidable need for more care with old age make medical insurance even more important for people transitioning into retirement.

Although most retirees are eligible for Medicare, it does not cover 100 percent of medical costs in the end. There are a number of supplemental plan options that can help offset the cost if not fully cover the services that basic Medicare does not. Examples of these supplemental plans would be Medigap and Medicare Part D coverage.

What Health Insurance Is Available For Early Retirees?

Early retirement is quite a common goal among people in the workforce, regardless of what their occupation is. But what exactly defines “early”?

For most, early retirement means stopping work before benefits used by retirees such as Social Security and Medicare become available.

If you are looking to start traveling the world on your own time and sleeping in whenever you’d like before your retiree benefits kick in, there is still hope. Let’s discuss a few potential methods for taking care of your health insurance needs if you have the privilege of retiring before the age of 65.

1. Obtain insurance through the federal marketplace

It is possible to find health insurance coverage similar to what you may have had with your employer. The Affordable Care Act has enabled coverage from your employer and coverage through healthcare.gov to essentially offer the same coverage benefits, deductibles and premiums. You may also be eligible for subsidies based on your income.

2. Use COBRA coverage

COBRA coverage, or The Consolidated Omnibus Reconciliation Act, allows individuals to maintain their coverage after exiting the workforce. This is a rule that requires employers to extend offers for access to coverage after separation of service by employees, for a certain amount of time.

Instead of searching for a plan that is similar after early retirement, you can continue to use the same plan you were on while employed.

One thing to keep in mind is the fact that COBRA coverage is only a temporary option for early retirement coverage. It usually lasts a maximum of 18 months.

3. Private Health Plans

These plans do not conform to the rules put in place by the Affordable Care Act, thanks to the fact that they are private. As a result, early retirees may be able to find reasonable coverage for their specific situations at a significant discount. This coverage offers premiums that are often more stable as well.

With a private health plan early retirees can choose from a number of coverage styles that allow them to build a plan that suits their specific needs. Most times this coverage can be purchased at any time of year.

What Insurance Do You Get At 65

Prior to retirement, workers are usually covered by their employer’s health insurance plan. Oftentimes, even if it isn’t necessary for them to work, people will postpone retirement until the age of 65. This is because of the fact that at 65, they will qualify for the government’s healthcare program, known as Medicare.

Individuals are eligible for Medicare if they or their spouse has worked for at least ten years in a Medicare-covered employment, they are 65 years of age or older, and are a citizen of the United States.

If retirees are eligible for Social Security retirement benefits, they are automatically eligible for Part A of the Medicare program, starting on the first day of the month in which they turn 65.

If they are receiving Social Security retirement benefits, they are automatically enrolled in Medicare Part B at the same time they become eligible for Part A, unless they decide to opt out of Medicare Part B coverage.

Medicare Part A provides inpatient and or hospital expense coverage. Medicare Part B offers outpatient and medical coverage. Part C of the Medicare program offers an alternate method for members to receive their Medicare benefits, with more details involved. Finally, Medicare Part D provides prescription and pharmaceutical drug coverage benefits.

Is It Mandatory To Go On Medicare When You Turn 65?

Medicare is a public health insurance program designed for people of age 65 and over, as well as individuals with disabilities. It covers hospitalization and a number of other medical costs fully or at reduced rates.

It is not necessarily mandatory for eligible persons to go on Medicare, however the insurance is automatically offered, and in some cases opting can be quite complicated for a number of reasons. Late enrollment often comes with penalties and declining Medicare parts A and B which are the foundation of the program, often comes with some sort of consequences.

Some of the more common reasons individuals may consider deferring or delaying their Medicare coverage include:

• They would like to continue contributing to a health savings account (HSA)
• They are continuing to work and have an insurance plan through an employer
• They have coverage through Veteran Affairs, TRICARE, or CHAMPVA