Health Insurance before Medicare Kicks in

[blake Radmacher]

All:

Maintaining health insurance seems to be a critical problem until age 65 when retiring early.
What is the solution?

Blake

 

[wabmester]

I purchased individual medical insurance when I retired about 18 months ago.  So far, they've raised my premiums by double digits in both 2003 and 2004.

I recently shopped around and found a better deal.  Same coverage, same docs, lower premiums.   What especially intrigued me about the new plan is that they charge the same premium for subscriber and spouse, so my wife, who is 7 years younger than me, is the main subscriber.

Just another reason to marry a younger woman  

 

[renferme]

another reason to marry a younger woman: she can continue to work after you retire. Can also, put you on her medical insurance at her job.

 

[John Galt]

Re. "younger women", my wife is 5 years younger
and still working, although not full time. I have
"piggybacked" on her health insurance a few times,
but not presently. One thing we did wrong is just signing on to COBRA a couple of times when my wife left her employer. We should have been shopping for a company we wanted to be with beyond the 18 months. I suggest shopping hard and
sticking with your health care insurer, assuming they
provide service and don't make it cost prohibitive.
Early in ER I jumped around a lot. Eventually this got
to be a problem, although we are satisfied with our current coverage ((so far).

John Galt

 

[Telly]

she can continue to work after you retire.   Can also, put you on her medical insurance at her job.

I believe you would want to think about that, and it's possible outcomes, first.
No doubt that that method would be the cheapest, initially. But say you are on the spouse's employers group policy. Everything is fine. The per-month costs for the two of you are reasonable (as reasonable as insurance gets!) for the coverage provided.

Then one day you develop a condition, or have an emergency. You are glad that you have the great group coverage to handle it all. But later, you realize that the condition or event may(will) prevent you from getting individual health insurance. They are a choosy lot, those underwriters, since there is no "group" to spread your risk over. So now your spouse has to keep working and working until you qualify for Medicare at 65. And your spouse also has to worry about losing her job, as that would scrap your coverage, after the ultra expensive COBRA 18 mos. runs out.

Underwriters might possibly decide to give you a policy with a condition if they think its not too bad. They might just jack the rates up, and disallow coverage for that condition or anything that evolves from it for 2 years or so. So if that problem takes a turn for the worst, its all on your resources to pay for it.


Just some thoughts. In the personal health insurance arena, too late is, too late.

 

[John Galt]

Re. health insurance, Telly is right on. That is pretty
much what happened to me.

John Galt

 

[JWR1945]

This is one area in which Government jobs can be attractive. The Federal Government extends health benefits to retirees that are equal to those of active workers.

In addition, the Federal Government employs people according to its rules. You are not likely to be rejected for employment simply because of the existence of a health condition. (You have to be able to do your job, of course.) I don't think that your coverage is affected by pre-existing health conditions or, if they are, it would only be for a very limited amount of time.

The rules for new employees are different from what I retired on. Back then, the Federal Government was looking for long service or age 65. Full retirement is later these days, but not by too much.

Remember that I am talking about health insurance, not the size of your pension. Today's defined benefit pensions are small. But the (401K equivalent) Thrift Saving Plan for new employees is generous (by most standards).

Have fun.

John R.

 

[Bob_Smith]

Health insurance availability varies greatly from state to state. In Iowa we can buy a policy through BC/BS with no health questions, but it's a policy of last resort, and the cost was $1,077 per month in 2003. Although the price is high, it could save someone from type of situation Telly describes.

State employees here also have excellent coverage they can keep after they retire, and that can be as early as age 55. Even a state employee who works only 20 hours per week qualifies. So if one spouse was able to land a part time state job as a secretary at age 54, and retire at age 55, she could cover the family as long as she lived.

This site has some information pertaining to each state that Radmacher might find useful:

http://www.healthinsuranceinfo.net

 

[John Galt]

That $1077 per month premium in Iowa looks cheap
compared to some other states I checked. Anyway,
if that was our only option we would have to "go bare".
Can't afford it.

John Galt

 

[mike toledano]

consider catastrophic insurance instead. we are 61 and 55, both retired early, and have a policy which covers us after we have accumulated $5000 in medical bills for the year. cost of the policy is $250 per month for both of us.

we figured that with the cost of a 'real' policy being about $900 a month, we have a cushion of $650 a month, or $7800 a year, to play with. as we're both in very good health, i'm willing to take the chance.....

 

[John Galt]

Hello!! $250 a month for 2 people is dirt cheap, even with the $5,000 deductible. I searched high and low
and I don't believe I ever saw a premium like that.

John Galt

 

[haha]

State employees here also have excellent coverage they can keep after they retire, and that can be as early as age 55. Even a state employee who works only 20 hours per week qualifies. So if one spouse was able to land a part time state job as a secretary at age 54, and retire at age 55, she could cover the family as long as she lived.

Hi Bob,

Is this continued coverage free, or is the retired employee billed for the cost?

Thanks, Mikey

 

[haha]

consider catastrophic insurance instead.  we are 61 and 55, both retired early, and have a policy which covers us after we have accumulated $5000 in medical bills for the year.  cost of the policy is $250 per month for both of us.

Mike, this seems excellent. Could you give more details, the name of hte company, website or whatever?

Thanks,

Mikey

 

[Bob_Smith]

Is this continued coverage free, or is the retired employee billed for the cost?

Mikey, the employee pays the full amount. There is a range of plans with varying costs. The Cadillac is about $950/month for a family plan. Everything is covered and the out of pocket max is $800 per year for a family. It's fee for service - one can be treated anywhere. But there are also some HMOs for less than half that. There is no medical underwriting, so if someone in the family had pre-existing conditions, they'd be covered.

 

[haha]

Thanks for the very quick answer Bob.

Mikey

 

[mike toledano]

catastrophic health insurance

to those of you who inquired about our insurance, as outlined above.

we live in florida. the carrier is blue cross / blue shield of florida. i don't know if it's available in any other state, but a search of blue cross might find it for you.

we started by inquiring online, but discovered that blue cross only sold it through reps, and not online. they alerted one of their reps and he got in touch with us in a few days. we were offered three different 'catastrophic' plans and chose the one we have.

by the way, my wife informs me that we pay $260, not $250, per month for the both of us, as i had incorrectly stated previously.