Do You Get Affordable Health Insurance Plans If You Are Retiring at 60?
With talk in every personal finance magazine about how lots of people can look forward from this point on to nothing but diminished savings for their old age and working to 80 to make up for it, you’d think that there was practically no one retiring early anymore. That’s not true, of course; some people do find that they are lucky to retire even before 62.
Anyone planning to do that though, does need to think ahead and do a little extra planning. For instance, if you plan to retire at 60, you know you’re not old enough to be eligible for Medicare. But that doesn’t mean that the private insurance industry considers you young enough to allow you near their affordable health insurance plans. What do you do?
With the Patient Protection and Affordable Care Act (otherwise unflatteringly known as Obamacare) coming in to the rescue, affordable health insurance plans do exist now – even if you have pre-existing conditions (you would have to be Superman to be 60 and not have pre-existing conditions).
Certainly, “affordable” health insurance plans for early retirees is not to be taken to mean that they will cost the same as what a 30-year-old would pay. Insurance does cost more as you grow older. But it won’t be as bad as it used to be. In addition, anyone who takes a no-coverage early-retirement deal when they retire will have protection too.
But this does come with one big caveat. If you’re one of those 60-year-olds who are so healthy you feel no need to pay for insurance just yet, you have to know that the healthcare reform bill makes it mandatory for everyone to have health insurance. If you don’t comply by the year 2014, there’ll be a penalty – of at least 1% of your income.
But right now, if you’re too young to qualify for Medicare, this is what you need to do for affordable health insurance plans. Right now, if you have employer-sponsored health insurance, you can keep it for one and a half years after you retire. That’s what COBRA does for you. But you do have to pay the premium. A few months before that plan runs out, you need to start shopping for your own insurance.
How exactly do you do this? Individual policies certainly are expensive; but the health care reform act makes sure that at the most, they can charge you three times what they charge a young and healthy person. And there are subsidies too if you don’t make that much (four times over the poverty line is the formula they follow).
If you’re finding it hard to get coverage because you have a pre-existing condition that makes your premiums go up too high for you, you can always take advantage of the high insurance pool that the federal government funds. Whatever questions you have in the matter, your state insurance commissioner’s office should really be able to guide you.