Getting Health Insurance While You Wait for Medicare
For most Americans, 65 is an important age. Not only is this a time when retirement looms large, but it is the minimum age to qualify for Medicare (although those who have been on Social Security disability for at least two years may enroll at any age). Medicare is the federal government health insurance program that you must pay into while working. Upon eligibility at age 65, you earn benefits like coverage for hospital stays, doctor’s visits, and prescription drugs.
Originally established in 1966, Medicare initially only covered inpatient (Part A) and outpatient (Part B) medical services. As part of the Balanced Budget Act of 1997, the United States Congress introduced Part C which allowed enrollees to join in Medicare Advantage (MA) plans. MA plans provide at least the same benefits of Medicare Parts A and B but are administered by private insurers. In 2003, Congress passed the Medicare Modernization Act which added Part D, a prescription drug program.
Like other insurance plans, Medicare requires premium payments as well as out-of-pocket payments like deductibles, co-payments or co-insurance. Most Medicare enrollees are exempt from paying premiums on Medicare Part A. Part B premiums are usually deducted from monthly Social Security payments. If you enroll in a MA plan, Medicare should pay for some or all of the monthly premium, an amount roughly equivalent to the amount you would pay for traditional Medicare.
Preparing for Retirement
Having Medicare benefits is one of the great privileges of living in the U.S. After working and paying into the Medicare for many years, you are finally able to take advantage of those benefits. In some cases, you may be eager to enroll in Medicare, but too young to do so. If you are not able to enroll in Medicare and must wait for a period of time, there are some good insurance alternatives you may want to take advantage of.
- Work part time—you’ve worked for years, so getting another job may not sound very appealing, but there are some important perks to working. One of the most important is getting health insurance through your employer who may subsidize some or all of your monthly premium. If you have already quit your old job, you may want to work part time with an employer who offers health benefits. It may take some work to find an employer that has a health plan for part-time help, but it is currently a scarce professional market, so more employers are desperate for experienced workers and willing to offer premium benefits to attract them.
- COBRA coverage—the Consolidated Omnibus Budget Reconciliation Act of 1985 allowed employees to remain on their employer’s health plan for an additional 18 months following job termination. Although some employers may pay for some or all of the premium after job loss, in most cases, policyholders are fully responsible for their monthly premiums. If you decide to enroll in a COBRA plan, you must notify your ex-employer within 60 days of termination.
- Extended employer plans—you should check with your employer to see if they offer any health insurance for retired workers. It may not be likely, but it is in your best interests to at least ask around. If there is one available, examine the eligibility criteria and your out-of-pocket costs including the premium. Many of these plans are quite pricey, so do your research before you enroll.
- Obamacare enrollment—if you meet certain income requirements and other eligibility criteria, you might qualify for a subsidized health plan on the Obamacare insurance marketplaces. You must earn an annual income between 100 and 400 percent of the federal poverty level—in 2016, that was between $11,880 and $47,520 for a single person or between $24,300 and $97,200 for a family of four. If you qualify for the tax credits, they may take hundreds of dollars off of your monthly premium but examine each plan carefully to learn how much you are responsible for through annual deductibles and copayments.
- Short term health insurance—if you only have a few months before you can enroll in Medicare, you may want to consider a short term health insurance policy. Unlike other kinds of health insurance, a short term policy does not have to meet the minimum requirements of the Affordable Care Act like universal acceptance or minimum essential benefits. An insurer may turn you down or charge you more if you have a pre-existing health condition, but they do offer some financial protection if you need medical care. These policies only offer coverage for three months at a time, but you can renew them if your insurer approves.
- Move to another state—Insurance rates are set regionally due to the prices fluctuating from one local market to another. If you have the resources and the initiative, you may want to relocate to a state with lower insurance costs. In these lower cost markets, you may also find that health care costs in general are lower if you want to go without insurance.
- Relocate to another country—if you can’t find a region in the U.S. that meets your financial needs, you may want to consider moving to an entirely new country. Many countries like Thailand or Costa Rica offer medical services or health insurance at much lower prices. Many developed nations like Canada or the United Kingdom even offer universal health care. You should research the eligibility requirements for obtaining health care in these countries to avoid any surprises.
Having health insurance just in case you encounter any health problems prior to enrolling in Medicare is a necessity. Not only will it keep your normal health care costs down, but such coverage will ensure that you are prepared for even a major medical emergency. After all, you don’t want to start off your retirement by earning a lot of medical debt that may prove difficult to pay off.
If you would like to learn more about insurance options in your area, please visit Boost Health Insurance.
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