Insurance for Retirees
2014 Medicare and Medigap Updates
Insurance for Retirees
If you are individual between the ages of 55 and 64, a trip to your insurance agent will reveal that you are likely to pay more for health insurance coverage as you are now considered a high risk. Previously, it used to be an uphill task for such individuals to find quality healthcare insurance as the policies available were either too expensive or the insurance companies denied coverage due to pre-existing conditions. However, due to the new law, the Patient Protection and Affordable Care Act, which became effective on March, 2010, there are more affordable options in terms of insurance for retirees.
Some of the new aspects introduced by the law includes measures to protect individuals who lost their jobs due to budget cutbacks or happened to take no-coverage early retirement packages as part of their employment package. Moreover, the law also covers individuals who choose to retire early. If you are one of these retirees and do not yet qualify for Medicare, here are some of the insurance options available to you.
The first option would be to extend your existing insurance coverage. The COBRA act allows for one to extend their insurance that they have with their employer for at least 18 months after they retire. This is only possible if the employer has 20 other employees under the same health insurance package. However, there is a slight drawback to this option. Rather than share the premiums with the other employers as you would have done before retiring, you will have to cater for the entire premium from your own pocket. You should look at other insurance for retirees options well before COBRA runs out as the process is time consuming.
The other option available as insurance for retirees would be to buy coverage. With this method, the premiums will be higher as it is an individual plan and not a group plan. Moreover, as you are of an older age bracket, the policy you will be given will be underwritten based on a number of factors such as age, current health profile and whether or not you smoke. Fortunately, the healthcare reform act limits insurance companies from charging more than three times what they would charge younger policy holders.
One of the best options for insurance for retirees would be to try high deductible insurance plans. Certain individuals may not qualify for subsidies on their plans and may still want to keep their monthly premiums as low as possible. For these individuals, high deductible plans such as those which have a $5000 deductible make the monthly premiums much more manageable. While deductible may be quite steep, you can offset the cost by contributing to a Health and Savings account. If you do not have one, be sure to open one when considering this option.
Of course if you have worked and paid into the system you will have Medicare at age 65 or 66, depending on current age. However, Medicare is only going to take of 80% of your medical bills so it would be wise to have a low cost and government supplement called Medigap.