8 early retirement health insurance options

The Social Security Act of 1935 set age 65 as America’s retirement age. While Social Security benefits start at 62, Medicare eligibility is at 65. If considering early retirement, understand pre-Medicare health insurance options. Here are eight to begin with:

Employer-sponsored retiree benefits

Certain employers voluntarily extend health insurance to retirees, resembling active employee plans. Employers often subsidize 70% to 80% of healthcare premiums for employees. However, subsidizing retiree plans isn’t guaranteed, potentially requiring you to cover the entire premium.

COBRA

Upon leaving employment, COBRA mandates employers to offer access to their group health plan for up to 18 months. Exceptions exist, like termination with cause. Though this allows continued employer insurance, you may bear the entire premium cost, as most employers do not subsidize COBRA coverage.

Spousal Insurance

If your spouse works, joining their employer-sponsored health plan is an option. While potentially more affordable, costs increase with additional members. Evaluate any implications before opting for your spouse’s plan.

Health Insurance Marketplace

Government-run, the Health Insurance Marketplace enables private insurance purchase. Subsidies for income and household size-qualifiers can significantly cut costs. However, without subsidies, the program can be expensive. Visit Healthcare.gov or use a calculator for estimates.

Buying Direct (Off-exchange) Insurance

Plans directly purchased from providers offer more options but can be costlier without subsidies. Unlike government marketplace plans, direct purchases lack employer or government support.

Short Term Insurance Plans

Offering limited coverage for up to a year (renewable twice), these plans are budget-friendly but may not cover all aspects. Denials for preexisting conditions are possible. Comprehensive needs may warrant alternatives due to potential limitations. 

Health Benefits through Membership Organizations

Certain groups negotiate lower premiums for members, offering cost-sharing plans. Association health plans involve similar members, negotiating lower prices, while health sharing plans, often faith-based, pool contributions for medical expenses.

Part Time Job

Despite seeming counterproductive, a part-time job can provide needed health coverage. Subsidies from employer group health plans may be available. Ensure to inquire about part-time employee benefits before committing.

Bottom Line:

Considering coverage needs versus affordability is vital, as comprehensive plans usually entail higher premiums. Assess your health condition and budget, acknowledging individual needs amid diverse early retirement health insurance options. No perfect plan exists, emphasizing the necessity for tailored consideration based on unique health and financial circumstances.