Retiree health insurance options before Medicare

If you’re employed full-time, you likely have health insurance through your employer. If you retire before age 65, you’ll need health insurance coverage between when you lose your employer-sponsored plan and when you start Medicare at 65. There are 6 options to bridge that health insurance gap:

1. Self-insurance – This means NOT getting insurance. If/when you need any medical services, you’ll have to pay 100% of the cost.
2. Employer’s retiree benefits – While increasingly rare, some employers offer fully or partially subsidized health insurance benefits to their retirees.
3. Coverage from spouse – If you have a spouse who is still employed and has health insurance coverage through his or her employer, you can most likely be added to that policy.
4. COBRA – This is the ability to continue the coverage you had at your employer. While often the easiest option, it’s not the cheapest - you’ll have to pay 102% of the unsubsidized amount of monthly premium of your employer’s policy. Also, you can typically only extend coverage for up to 18 months after you stop working.
5. Marketplace – Also known as the “exchange,” this is the government-run health insurance shopping platform. Depending on your level of gross income, you may be eligible for subsidies that help defray the monthly premiums you’d otherwise have to pay. Visit www.healthcare.gov for more information.
6. Faith-based health sharing arrangements – Typically requiring you to be of a Christian faith, these are collections of people who pool together money to help pay each other’s medical bills. While not legally insurance, these agreements often look and act like insurance. But be sure to thoroughly research and understand their terms and rules.

For more information on each of these 6 options, watch my recent YouTube video, Health Insurance Options Before Medicare Eligibility.