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What Are Your Health Insurance Options

    • 88 posts
    May 4, 2021 8:42 AM +0430

    What Are Your Health Insurance Options If You Retire Before Medicare?

    Early retirement is a very common goal, but how exactly do you define “early?” For most people, “early” means stopping work before the availability of benefits that are used by retirees like Social Security and Medicare. Uncertainty over whether retirement savings can last without these programs is often the reason people put off retirement.

    If you have dreams of sleeping in or traveling the world before you’re eligible for retiree benefits, all is not lost. As is the case with any goal, you must decide to face it head-on and find ways to make it work within your financial plan. Here are a few ways to address meeting your medical care needs if you choose to retire prior to age 65. slotpg

    Option 1: Obtaining insurance through the federal marketplace

    Pros

    · You have the possibility of finding health coverage similar to what you have with your employer – Due to the implementation of the Affordable Care Act, coverage from your employer and coverage through healthcare.gov offer similar coverage benefits, deductibles and premiums.

    · You may be eligible for subsidies depending on your income – The cost of coverage for health insurance through the federal exchange is correlated to how much taxable income you report. In some cases, these subsidies can bring the cost of coverage in line with what you are currently paying through work.

    Cons

    · Coverage can be very expensive – Without the subsidies, you are exposed to the full brunt of the cost of healthcare. Depending on where you live and the size of the deductible you choose, costs can approach $1,000 or more per month. While you may want to maintain the deductible, you have through your employer, you may need to increase it in order to make premiums affordable.

    · Changes in laws pertaining to the Affordable Care Act can make it difficult to plan – The laws that govern the plans that are available on the exchanges have changed in the past, and there is reason to believe that there are more changes to come. This can make it very difficult to plan the cost for this line item in your budget going forward.

    Option 2: Use COBRA coverage

    Pros

    · You can maintain your same coverage – The Consolidated Omnibus Reconciliation Act or COBRA is a rule requiring employers to offer you access to coverage after separation of service for a certain amount of time. So rather than searching for a similar plan, you can use the same plan.