Health Insurance Options for Early Retirees

You're racing to retire as soon as possible.

If you're successful, that means you'll likely get there before age 65.

You'll be too young for Medicare, and you just walked out on a company health plan.

What are your options?

See below for 6 Ideas:

1. COBRA

COBRA is an act that allows individuals and families to continue group health insurance after separation from an employer. Though it’s a great way to keep seeing the same doctors and getting the same prescriptions filled, the coverage only lasts 18 months. That means if you want no interruptions between employment coverage and Medicare, you'll need to retire at age 63 1/2 at the earliest. If you plan on retiring sooner than that, you'll need to explore an additional option to COBRA.

Additionally, you won’t be sharing costs with your employer anymore—you’re paying FULL price for the coverage. That makes COBRA an okay short-term health insurance solution in early retirement, but not a long-term play.

2. Part-time Employment

Maybe you want to retire from your career, but you want to work a part-time job to keep access to health insurance. Companies like Amazon and Starbucks offer this type of arrangement.

Of course, the caveat with this option is you aren't fully retired.

3. Spouse's Plan

Depending on your financial plan, you may consider having the older spouse retire first, then enroll on the younger spouse’s company insurance plan. This may be a short-term fix until having to look for something else.

This situation might work best with a larger age gap between the older and younger spouse, when the younger spouse continues to work.

4. Marketplace

On www.healthcare.gov, you may be able to find a personal insurance plan that suits your needs. Depending on your economic status, you may also be eligible for premium tax credits, which would reduce your monthly premiums.

The challenge with Marketplace is plan designs. There are set plans based on premiums, deductibles, and coinsurance. It may be difficult to find the perfect fit.

5. Health Share Plans

Health sharing plans are not technically insurance, but they do help cover costs of healthcare. Members of health share plans agree to help each other pay for medical bills, and often, pre-existing conditions are excluded. For retirees, this may not be best case scenario, since your need for healthcare typically increases as you get older.

These plans are often faith-based and require a statement of faith to participate. If you are a healthy Christian, this could be an alternative health insurance plan to explore.

6. Private Health Insurance

You may be able to purchase your own private health insurance plan. Being private, you may have additional options for coverage that are unavailable through the Healthcare Marketplace. However, you won’t be eligible for premium tax credits, so your premiums might be higher.

Similar to life insurance and disability insurance, you may have to complete medical underwriting to confirm eligibility and premiums. Thus, there's no guarantee of coverage with certain providers.

Final Thoughts

If you're planning to retire before 65, it's important to plan your healthcare expenses. Likely, the discounted premiums you're currently receiving for coverage through work won't be an option when you retire, so it's important to have a health insurance plan before you call it quits.

Are you curious about the best health insurance options for you?

My team and I evaluate your whole financial picture, which includes selecting benefits and insurance plans, either while working or retired.

If you'd like to learn more about how we give advice beyond a mutual fund recommendation, you can:

1. Message me.
2. Visit our website.
3. Schedule a conversation.