Health Insurance Options For Early Retirees

Want to retire early? I don’t blame you. Some people are ok with the idea since they want to experience the benefits of retirement in a younger body. There are pros and cons to this approach though and your health is oftentimes a determining factor. Shopping for a health insurance plan during early retirement can be challenging if you don’t have the right tools at your disposal.

What should you look for?                                                 

First and most importantly, you must choose a plan that works for you. Think of quality care. You need access to individualized treatment from physicians and hospitals everywhere you go. Discounts are also important – you want a variety of in-network hospitals and doctors to choose from, so you can benefit from their discounted rates. Annual checkups should not cost you anything. Preventive care, including screenings and annual exams are essential to keeping you healthy and should be covered under your health plan. Online tools are also beneficial since they allow for an easier and more convenient search experience.

Consider the Cost

If you are retiring before age 65, you probably have some legitimate concerns about your finances. You need to cover the major expenses during your retirement, especially your out-of-pocket health care expenses as they can be very costly for most retirees. Based on a 2018 estimate by Fidelity, a couple can spend as much as $280,000 on healthcare during retirement. Keep in mind, these costs are based on retiring at age 65. Early retirement can be more expensive.

Where to Find Health Coverage

Review your health insurance options, so you can keep them as low as possible. Some options available include:

  • Your spouse’s employer-sponsored health plan – If your spouse is still receiving health benefits, you can obtain coverage through them. Retirement serves as a qualifying event for adding a person to an existing plan. Make sure you talk to your spouse as early as possible so you can organize everything properly and determine whether it’s a good timing to leave the workforce.
  • Get quotes from the private insurance marketplace – If you are in good health, review your options earlier. The private insurance marketplace offers a variety of options. Family and individual health plans, however, can be more expensive. Even if you choose to buy health insurance under COBRA or the ACA, it’s good that you look around and compare prices.
  • Coverage options under the Affordable Care Act (ACA) – Losing your job-sponsored coverage constitutes a qualifying event to get coverage through the ACA. So, you can go ahead and find coverage during open enrollment. You may qualify for a subsidy based on your income amount during early retirement. Look in your state at and find the policy most suitable for you.    
  • Check with your employer to see whether you qualify for retiree health coverage The number of retirees with such benefits has declined significantly. Only 16 to 25 percent of retirees have supplemental Medicare coverage.   If you have health insurance available when you retire, make sure you check the age and eligibility requirements first. Also, check to see how health benefits will evolve as you age.
  • Use COBRA to keep your coverage for 18 months – This is a viable option, but your premiums will be much higher. If you have a health savings account (HAS) you can use the funds to fill in the gaps your health insurance left.  The good news is that you don’t have to change providers, but you are losing your job-sponsored subsidy, and now you are responsible to cover the entire cost.
  • Some part-time jobs may provide access to health coverage – Generating extra-income is always helpful, especially if your employer is generous enough to cover a portion of your healthcare. In most cases, you are responsible for the total health coverage cost. However, you may be able to find a good deal through a group plan. Check local employers that provide health benefits for part-time workers.

At Insurance Line One, we meet the needs of early retirees like you. With the help of one of our licensed insurance agents, you can see the plans we offer through top-rated providers and choose the one that best meets your needs. Happy retirement!


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