When you retire, you’re no longer bound to a set schedule and have the freedom to choose how you want to spend your time. But one aspect of retirement that many people forget to consider is health care costs. According to a recent survey from RBC, 80 percent of respondents say they’re worried about how they’ll pay for medical care in retirement. The good news is, you have plenty of options to help you cover those costs when you reach retirement age and aren’t eligible for Medicare.
Retirees can enroll in the marketplace, continue their former employer’s coverage through COBRA or state continuation, and/or join their spouse’s plan. Many of these options are based on your household income, so you’ll need to factor those costs into your budget before you decide.
Another option for retirees is to purchase private health insurance. This process is similar to shopping for health insurance on the marketplace, and you can find a variety of plans at prices that work for your budget. Some of these plans can also be paired with a health savings account, which allows you to save money for healthcare and other expenses.
Most employers subsidize about 70 to 80% of their active employees’ monthly premiums. As a result, most retirees who take early retirement will be responsible for 100% of the premium for their coverage. If you want to keep your employer’s health plan after retiring, you’ll need to sign up for a special enrollment period (SEP). This window usually opens 60 days after you stop working or lose your job and runs until the day you turn 65.
You can also buy supplemental Medicare coverage to help you pay for your Medicare Part A and B deductibles, copays, and coinsurance. These plans are provided by private insurance companies and are known as Medigap policies. These plans typically cost extra each month in addition to your Medicare premiums.
If your household income is low, you may be able to enroll in your state’s Medicaid program. Each state’s program is different, but most have an income threshold to determine eligibility. If you’re thinking about enrolling in Medicaid before turning 65, be sure to check your state’s estate recovery laws, as some states will recover the cost of any care your beneficiaries receive from the program when they pass away.
One way to reduce your out-of-pocket health Visit the blog care costs in retirement is to postpone your Social Security benefits until you’re 65. You can do this by either saving enough to cover the costs of healthcare until then or by purchasing private health insurance that will bridge the gap between your early retirement date and when you’ll be able to collect Medicare. eHealth can help you find a plan that fits your needs and budget. Start your search today!