Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Student Health Insurance for 5 years
Old 12-23-2008, 08:43 PM   #1
Dryer sheet aficionado
Join Date: May 2004
Posts: 44
Student Health Insurance for 5 years

Would like opinions on the following short term plan for health insurance after I retire. Assumption is we can't get insurance on our own.

When I hopefully retire at 54, I will have 12 years (split evenly 6 yrs each for wife and I) of free retiree insurance available and this can be delayed for up to 5 years. Employer also allows retirees to remain on employer plan at full cost after retiree insurance benefits are over.

I was thinking that it would be financially beneficial to take the delay option, since the value (to me) of the insurance would be more if I took the retiree years from age 59-65, rather than right away from age 54-60. I would be student from 54-59 and take free retiree coverage from 59-65, rather than taking free retiree coverage from 54-60 and pay full cost of employer insurance from 60-65.

So then we would have to find insurance duing those first 5 years. Without having to work at a part-time job enough to get insurance that way, I have found that a local state university offers student insurance for those taking just 3 credits/semester. Though requirement to pass, I would as that's one of my goals is to go back to school. Anyway, while this insurance is somewhat limited ($100,000/year benefits), it is just for the 5 years and with the cost of 4 classes/year (if wife and I each take 2/year to each qualify on our own), other fees, and insurance itself, it's only about $7,500/year - compared to close to about $25,000 for employer's if we paid for that beginning at 60.

Anyway, this 5 year student plan saves us a fair chunk of money to say the least. I know the down side is that insurance coverage is not the greatest but chances are probably wouldn't need in mid 50s and if there was an emergency that better coverage was needed, have option to begin employer's free retiree coverage at any time during those 5 years, regardless of health status.

I say it's worth a chance. What say you?

astroboy is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-24-2008, 07:46 AM   #2
Alan's Avatar
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 22,048
It sounds to me like a pretty good approach provided I was sure that I could sign up for the retiree insurance at any time and that no pre-existing conditions are exempted. If, heaven forbid, one of you gets seriously ill while under the student insurance plan and are going to outstrip the $100K coverage, can you then sign up for your retiree benefits?

Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is online now   Reply With Quote
Old 12-24-2008, 07:59 AM   #3
Moderator Emeritus
Martha's Avatar
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
Student health plans also often exclude certain conditions. Also, they are exempt from COBRA so when they end they end.

The biggest issue was pointed out by Alan: if you become ill on the student plan will that condition be covered under the retiree plan when you decide to switch?

No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Old 12-24-2008, 08:26 AM   #4
Recycles dryer sheets
SteveL's Avatar
Join Date: Aug 2005
Posts: 380
Does your employer offer a large deductible option? If so, I would suggest you consider this for the first five years paying the full employee cost, and then switch to the retiree insurance for the last six years.
SteveL is offline   Reply With Quote
Old 12-24-2008, 11:58 AM   #5
Recycles dryer sheets
Join Date: Apr 2005
Posts: 81
Our youngest son turned 25 last February. He is a full time graduate student (this is his fifth year in grad school). At 25, we couldn't cover him on our megacorp retirement medical insurance.

I looked at the student medical insurance but the lifetime limit was only $15,000 versus the unlimited for megacorp. So, we have chosen to pay for his COBRA coverage until he obtains his own coverage next year. He could keep the COBRA for up to 3 years (versus 18 for an employee who leaves).
dlhanson is offline   Reply With Quote
Old 12-24-2008, 12:34 PM   #6
Thinks s/he gets paid by the post
Join Date: Oct 2008
Location: Naples
Posts: 2,175
Astroboy, what are the odds that your company will be around when you reach 54 years of age? Even if they are still in business, what is the possibility of them dropping health care offers to retirees? The reason I mention this is that I'm a GM salaried retiree who just lost all his health care coverage including dental, vision and prescription drugs. Spent 34 years at GM and it was a shock to me when this happened. If it can happen to one of the largest corporations in the world, it could happen to your company. That puts consideration in the area of taking it as soon as available to make sure you get good use of it. Lots to think about.
JOHNNIE36 is offline   Reply With Quote
Old 12-25-2008, 10:25 AM   #7
Thinks s/he gets paid by the post
DangerMouse's Avatar
Join Date: Jan 2007
Location: Silicon Valley
Posts: 1,812
I wouldn't dream of switching to something like the student plan you are proposing. It is too risky that you will exceed that $100k limit.

My DH had a heart operation earlier this year which involved a 1 night stay in ICU. He was home the next day, so for the surgery and 1 night of hospitalisation the charge was $140k.

I be a girl, he's a boy. Think I maybe FIRED since July 08. Mid 40s, no kidlets. Actually am totally clueless as to what is going on with DH.
DangerMouse is offline   Reply With Quote
Old 12-25-2008, 12:53 PM   #8
Recycles dryer sheets
MovingtotheCove's Avatar
Join Date: Nov 2008
Posts: 153
I'd be skeptical of the student plan due to the limits on the upper end. It might be adequate for a 19 year old but now being over 50 so many things can happen and before you know it the limit would be at the max. Again, we are in our early 50's and are on a private High Deductible plan for the past 4+ years at a level of $3850 deductible per year per family unit. We then have a tax deductible HSA funded each year and can cover our deductible from this is desired or just let it grow. Having 100% coverage after the deductible is reached is good peace of mind. You just need to get used to no co-pays and no reimbursement from the policy for normal everyday routine things....if you want to pay your self back from the HSA. We genearlly write a check back to ourselves in Dec each year. Oh....our upper end limit per person is $2M.....not as much as we would get today but to screw up our coverage to get more isn't worth it at this stage. Again, our early retirement goals have had a bit of a setback like others due to the market meltdowns but we think our insurance plan is still valid unless the company goes under or drops individual plan coverage. At that stage who knows if we could qualify for another plan?
MovingtotheCove is offline   Reply With Quote
Old 12-25-2008, 01:08 PM   #9
Moderator Emeritus
Rich_by_the_Bay's Avatar
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
I'd take the 12 years of free coverage while you know you can get it, the employer is still in business and it's a bird in the hand. 6 years is enough time to know if universal coverage or other reforms are actually going to happen, and my guess is that whatever else unfolds, all Americans will probably have the ability to purchase coverage under a large risk pool, whether they are employed or not.

I echo serious limitations in the typical student health coverage. Do serious homework.

Good luck.
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Old 12-25-2008, 05:22 PM   #10
Recycles dryer sheets
Join Date: Jul 2008
Posts: 97
I'm hoping, for ourselves and many other Americans, that the health care situation will improve for early retirees, etc., within the next few years. So I'd go with the employee plan first, and hope for the best later.

You do always have to worry about companies changing their health plans and/or just going out of business. And the student plans are questionable imho(we looked at one for my daughter and instead included her in our private insurance coverage). Medical costs can be huge for one year - one problem I had two years ago cost more than $40,000 in hospital costs alone, never mind all the associated doctor and lab charges.

barker is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Insurance for Graduating College Student? ERD50 Health and Early Retirement 20 05-21-2008 06:42 PM
Health Insurance and RE Sandy Health and Early Retirement 8 06-26-2007 06:39 PM
health history for health insurance vic Health and Early Retirement 22 10-26-2006 09:07 AM
Health Insurance bookman51 FIRE and Money 48 08-14-2006 06:23 PM
health insurance and effect on increased health care costs Martha Other topics 9 08-08-2006 01:54 PM


All times are GMT -6. The time now is 10:21 AM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.