The Best Insurance Options for Early Retirees
One of the biggest challenges of retiring early is getting the health insurance coverage you need. For many consumers, early retirement is a dream come true. However, this dream can take considerable effort to realize. It's essential to have health insurance coverage as you get older to protect both your health and your finances. Unfortunately, most individuals can't qualify for coverage through Medicare until they reach 65 years of age. At the same time, most individuals will lose their primary coverage through their employer when they retire. That's why it's important for you to do your research to find the best insurance options for early retirees.
Although it might be challenging for you to find health insurance coverage that allows you to retire early, it should be possible with a bit of time and effort. There are numerous options available when it comes to early retirement health insurance. You simply need to research the options and determine which one works for you.
The following are nine health insurance options for early retirees:
Qualifying For Medicare Due To a Medical Condition
Before you start looking for early retirement coverage, make sure that you're not eligible for Medicare. It's true that most individuals under 65 are not eligible for Medicare.
However, in some situations individuals can qualify for Medicare even if they haven't reached 65. The primary means of qualifying for Medicare when you're younger than 65 is through a medical condition.
If you have one of several medical conditions, you can sign up for Medicare during early retirement.
Individuals who have end stage renal disease are eligible for Medicare even if they haven't reached their 65th birthday.
Lou Gehrig's Disease or ALS is another condition that will automatically qualify you for Medicare.
A third possibility is qualifying for Medicare because of a disability. If you receive social security benefits due to a disability, you may be eligible for Medicare when you're under 65.
Getting Insured Through Your Spouse
One option for married retirees would be getting health insurance coverage through one's spouse. This can be among the best insurance options for early retirees for many consumers. If you're married and your spouse is still working, look into health insurance coverage through your spouse's employer. You can't get health insurance through your spouse if your spouse is insured through Medicare. However, you can potentially get coverage through your spouse if he or she is insured through an employer.
While spousal coverage could be a good option, it's important to consider the expense. In a lot of cases, your spouse's employer sponsored health insurance will be more expensive if you're added to the plan. Make sure to consider the added expense. It might be more cost-effective to find another means of getting the coverage you need. Compare costs and coverage benefits to make sure that spousal coverage is the best option.
Enjoying Coverage Through Group Health Insurance
Some companies offer health insurance coverage to employees after they retire. Although it's rare, there are still some companies out there who will continue to insure you after you retire. It's always important to look into whether your employer offers any group health insurance benefits to retirees.
Another possibility when it comes to group health insurance would be a phased-retirement plan offered by your employer. With a plan like this, your responsibilities at your company will gradually be reduced. This allows you to semi-retire while you still enjoy employer sponsored group health insurance.
You should try to negotiate with your employer if your employer doesn't formally offer such a program. Some employers may be willing to work with you if you express a desire to retire early. This is especially likely if you've been with your employer for a long time and have shown yourself to be a particularly valuable employee.
Getting Covered Through COBRA
If you're retiring early but not that early, the Consolidated Omnibus Budget Reconciliation Act (COBRA) might be able to meet your needs.
Through COBRA, you can extend coverage through your employer for as long as 18 months. This means that COBRA may meet your needs if you retire when you're 63.
Although COBRA may be a good option for some, it's important to understand that this coverage option does entail some expense. When you use COBRA, you have to pay the full premium for coverage. As an employee, your employer offers a subsidy that helps with premium costs. When you use COBRA, you lose this subsidy and have to foot the full bill. Keep COBRA in mind, but also make sure that you're looking into other options.
Purchasing a Plan Through the ACA
Fortunately, ACA plans are available to many individuals who hope to retire early. In fact, ACA plans can be the best insurance options for early retirees. With an ACA plan, you'll enjoy a subsidy from the government if you qualify through your income. If you want to see if you're eligible for an ACA plan, you can go online and look on the Healthcare.gov website. You'll then be directed to your state's health insurance exchange to shop for a plan.
If you qualify for a government subsidy, ACA plans may be affordable. However, it's important for you to choose your plan carefully to make sure that you're getting the coverage you need. These plans can vary widely in terms of how much coverage they offer and how good the coverage is.
Buying Direct From a Health Insurance Provider
Those who don't qualify for a subsidy may need to buy insurance direct from an insurer. You may not qualify for a subsidy if your income is too high. If you earn more than 500 percent of the federal poverty level, you may not qualify. Those who don't qualify won't be eligible for any premium tax credits. If you're not getting any subsidies, you can purchase health insurance from an insurer's website and not through a state health insurance exchange.
Unfortunately, it may be expensive for you to buy direct from an insurer. You need to research carefully and comparison shop. You can use the Internet to do cost comparisons among different providers. Carefully evaluate all the options available to you. If you're buying health insurance direct from the insurer, your costs may be significant. This means that you want to make sure you'll get quality coverage for what you're paying.
If it's expensive for you to buy direct from insurers, you might want to look into catastrophic health insurance. This type of insurance will typically cover you only for emergencies. It is not major medical insurance, but it can protect your health and won't be nearly as costly as major medical plans.
Signing Up For a Health Sharing Plan
Health sharing plans are also sometimes referred to as healthcare sharing ministries. You can look into the possibility of enjoying some coverage from a health sharing plan. With this type of plan, a group of members shares medical costs.
Although coverage is fairly limited with this type of plan:
Health sharing plans might be adequate for retirees without high healthcare costs.
You might have to meet certain requirements to qualify for this type of plan.
It's important to note that health sharing plans generally won't cover costs of treatment for pre-existing conditions.
These plans also typically won't offer coverage for high cost prescription drugs.
Finding a Part-Time Job
You might be able to find a part-time job that you can do during your retirement that offers health insurance. If the idea of working part-time appeals to you, look around for employment opportunities in your area. Working part-time allows you to enjoy the perks of being retired without having to worry so much about getting bored. Many companies out there offer some health insurance coverage to part-time employees. You can look for a part-time job that offers a flexible schedule, minimal responsibilities, and enjoyable work.
Moving Overseas And Enjoying More Affordable Coverage
Retiring early and moving overseas can really simplify your health insurance challenges. Although you might not want to move abroad only for health insurance reasons, more affordable healthcare abroad is definitely a perk of retiring to another country. If you've already been interested in retiring abroad, learning about the health insurance benefits might convince you to finally commit to doing it.
Many countries all over the world have great health care systems. Paying for healthcare in these countries is much less expensive than paying for healthcare in the United States. In some countries, you can enjoy not only cheaper healthcare costs but other cost of living expenses that are cheaper as well.
If the idea of traveling during retirement appeals to you, you should definitely consider getting the healthcare you need at the beginning of your retirement overseas. You could always move back home in the future once you're old enough to qualify for Medicare.
Conclusion
No one wants to be stressed out about healthcare costs when they're retired. It's not really worth retiring early if you can't retire comfortably. Consider the health insurance options mentioned above to see if one of them is available to you. The best insurance options for early retirees are options that are affordable and comprehensive. You'll have to compare the costs of these different options. Doing the math is essential when you're planning your retirement. You need to make sure that you'll have enough money to realize your early retirement goals.
Once you've found the right health insurance for your early retirement, you'll be one step closer to reaching your retirement goals. Make sure you plan for lots of financial cushioning. Costs can turn out to be higher than you expected, so be conservative and careful in your planning. Your goal is to find a way to affordably get adequate coverage until you turn 65. You'll feel relieved and liberated once you've figured out how to do this successfully.
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