Getting health insurance when you retire early
Monday, May 19, 2014 5:00 PM
If you decide to retire early, you might have trouble keeping your health insurance until you are eligible for Medicare, since few employers offer health coverage to retirees. Fortunately, the Affordable Care Act provides new options for coverage.
Here, we answer some questions you might have as you figure out your health insurance options.
Can I get coverage through my spouse if he or she has workplace coverage?
Your spouse may still be working for an employer who offers health insurance to family members. Perhaps you declined that coverage before because you had it through your own job. Now might be a good time to re-evaluate if you want to join your spouse's plan-but act quickly! After you lose your coverage, you have a special 30-day period to enroll in coverage that is offered through your spouse's employer. (Go to http://familiesusa.org/sites/default/files/product_documents/special-enrollment-opportunity.pdf for more information on signing up for workplace coverage.)
Can I keep my old health plan?
If you worked in a business with 20 or more employees, a federal law called COBRA allows you to keep that health plan for 18 months (or longer in some circumstances). However, you generally have to pay the full cost of monthly premiums-both the share of premiums that is paid by employees and the share that your employer used to pay-plus a small administrative fee. This may be expensive, but it gives you access to the same benefits and providers you had while you were working.
Can I shop for and compare plans in the new health insurance marketplaces?
You can buy an individual health plan through your state's new health insurance marketplace. To find your state's marketplace, go to www.healthcare.gov. You may want to compare the premiums, providers, and benefits in marketplace plans with the costs and benefits of your former employer's plan to decide whether the marketplace or COBRA would be a better deal for you. You have a special opportunity to buy a marketplace plan within 60 days of losing your employer-based coverage. If you miss the 60-day window, you must wait until November 15th for open enrollment.
Marketplace plans may be a particularly good deal if your income for 2014 will be between $11,490 and $45,960 (or between $15,510 and $62,040 for you and your spouse). You may even qualify for financial assistance that lowers your monthly premiums. Don't forget to apply for "help paying costs" in the marketplace. And people with the lowest incomes may qualify for special silver plans that have lower deductibles and copayments.
Can I buy an individual health plan outside of the marketplace?
In most states, you can buy individual insurance outside of the marketplace by going directly to an insurance company or broker. Under the Affordable Care Act, all new health plans that are sold to individuals must cover a set of essential health benefits and cannot refuse to cover you if you have a pre-existing condition.
However, if you buy a plan outside of the marketplace, you will miss out on some benefits. For instance, the marketplace offers plans that undergo greater scrutiny for consumer protections. Plus, the marketplace allows you to compare plan options from multiple insurance companies, apply for financial assistance to lower your monthly premiums, and get help from an unbiased organization or a call center.
Can I get Medicaid?
If your income for 2014 drops below $1,342 a month (or $2,406 a month for you and your spouse), you should check to see if you can get Medicaid in your state. (The income guidelines are even higher in a few states.) The Affordable Care Act allows states to offer Medicaid to most low-income adults. Unfortunately, only about half the states have expanded Medicaid. (Visit http://kff.org/health-reform/slide/current-status-of-the-medicaid-expansion-decision/ to see which states have expanded.)
If you live in a state that has not expanded Medicaid, you can apply for Medicaid anyway and save the denial notice-this denial exempts you from the requirement to have health insurance.
If you are considering retiring early, visit the health insurance marketplace to research your coverage options. By planning ahead, you can make sure you are covered until you qualify for Medicare.