How to Get Retiree Health Insurance Before 65

You may be ready to finally take a break from the work you’ve been doing for decades, but your health concerns won’t let you. Your dream of retiring before you reach age 65 might seem more distant than ever before simply because you don’t know where to get health insurance that will cover you until you’re eligible for Medicare. This article highlights a few options for claiming health insurance during your early retirement years—when you may need them the most.

Employer-sponsored Health Insurance
One of the most convenient ways to get health insurance if you are between 55 and 65 is through your former employer. In fact, the federal government has been trying to encourage more companies to offer health coverage for those who wish to retire early. The U.S. government’s Early Retiree Reinsurance Program has already provided hundreds of millions of dollars to fund retiree health costs, with over 5,000 employers taking advantage of this program. The problem, however, is that less than 30 percent of big companies with 200-plus workers offered health insurance for retirees in 2010. In addition, the prospect of getting employer-sponsored health insurance is even more miniscule for those retiring from small firms, with just 3 percent of these companies offering retiree health plans.

COBRA, Private and Group Health Insurance Options
If your employer doesn’t offer health insurance for retirees, you may choose to retire at 63 and ½ and then use COBRA for a year and a half. COBRA—which enables you to temporarily continue your health insurance coverage at a group rate—will keep you covered, guaranteed, until you can switch to Medicare. You might also opt for a private insurance plan. However, your budget may not be able to handle the costs of either of these types of plans. If your spouse still works for his or her employer, you could simply obtain medical insurance through that employer, which may be your cheapest option. Once you are no longer eligible for your former plan, you must request to be enrolled in your spouse’s plan within a 30-day period.

Retiree Health Insurance Costs
According to a recent study, retirees under 65 pay an individual health coverage bill of $600 each month, on average. That amount jumps to more than $1,600 per month for family health coverage. It is essential to understand all of your retiree health insurance options so that you can make a decision that will take into consideration both your budget and your health situation during your early retirement years.

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