Is Finding Health Insurance Keeping You From Early Retirement?
In the US, most workers get health insurance from the group medical plan at work. Sometimes those benefits do not stay with you after retirement. The majority of US workers must be 65 in order to enroll in Medicare. If you want to retire early, before age 65, how do you make sure you have a good medical insurance plan if your own company does not extend coverage past your termination date?
This problem has actually kept a lot of people from retiring early, even though they had plenty of reasons to leave their current job. Look at the ways that some early retirees solve the early retirement health insurance problem.
Extending Group Health Benefits Past Retirement
Your company may allow you to continue your group benefits. Some companies have a retirement plan that includes medical coverage, though that is getting rarer.
Depending upon your company, and the conditions of your termination, you might be eligible for a COBRA extension. That extension should last several months, and it could tide some retirees over until Medicare kicks in. You should be aware that the premiums you will have to pay with a COBRA extension will probably be quite a bit higher than your current contribution. This is because the company does not usually make its contribution, and so you need to pay the whole thing.
If you are researching early retirement medical plans, because you have been laid off, you may want to look into some typical unemployment health insurance options too.
Individual Health Insurance
The private market for major medical plans is quite active, and you may be able to find an affordable plan that will meet your needs until you reach Medicare age. Here’s the problem. Private insurers have the right to decline applicants. People who are old enough to consider early retirement – say between 55 and 64, but not old enough to enroll in Medicare, may be tough to place.
It is not impossible to find over 50 health insurance though. That is, if you are still fairly healthy, have good health habits, and have the money. You may also want to consider getting a vision and dental plan too.
State And Federal High Risk Health Plans
If you do get declined, or if you think you are at high risk for a decline, you should know that each US state, plus the federal government, now offer high risk health pools. The problem with some state plans is that they were quite costly. Prices also go up with age. The cost of some high risk pools kept some people from getting the coverage they needed.
The new federal plan is supposed to help bring the price tag down.
The state and federal plan will vary by location. If you want more information, please see the state and federal high risk plan page. This page has links to all of the different plans so you can get the right information for the area you live in.
Lower Income Health Insurance
Will early retirement slash your income a lot? Honestly, some early retirees are prepared to accept a cut in income because they figure they can also cut expenses. Again, sometimes health insurance is the only barrier to accepting a lower income and enjoying another stage of life!
This page has good resources on how to afford health care and insurance with a lower income. The solutions may also suit the needs of early retirees too. They include resources like prescription assistance, foundations, Medicaid, and state and county health programs.
Is Health Insurance Keeping You From Early Retirement?
If you your concerns over keeping good medical insurance have kept you from retiring early, you need to do some research. I agree that middle age is no time to lose good coverage! However, you may have some alternatives, besides waiting for the golden Medicare age of 65, that you never considered!
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