Re: In addition to medicare
Ellen McGirt and Andy Serwer
FORTUNE via CNNMoney.com
. How will I pay for health-care expenses?
McGirt: Ah, paying for replacement parts. According to Fidelity's 2006 Retirement Index, the typical American worker retiring today without employer health coverage will probably need $200,000 - yup, that's a big number - for expenses not covered by Medicare throughout retirement. And there's more: Since most people retire at 62 and Medicare doesn't kick in until 65, retirees start their golden years with a significant coverage gap.
Part-time work may offer the best solution: a bit of income, a bit of stimulation, and access to health benefits at a reduced cost. If your spouse is still working and has employer coverage, joining the plan of the working spouse is also an easy fix.
Another option is to continue your group coverage through the federal COBRA (Consolidated Omnibus Budget Reconciliation Act, 1986). Anyone who works for a company with more than 20 employees is eligible. You'll still pay out of pocket for premiums, up to 102 percent of the cost, but it may be cheaper and better than anything you can get on the open market - particularly if you have pre-existing conditions.
Your COBRA coverage will last for only 18 months. After that, you'll be entitled to purchase a policy with no pre-existing exclusions in the open market. But they can be pricey. One bright idea in the private market: high-deductible health plans linked with tax-advantaged health savings accounts. For those in good health, HSAs offer a nifty way to save for health-care costs over time, and premiums on high-deductible plans can be significantly lower than those on ordinary plans.
(Sources: Naic.org; Ehealthinsurance.com; HSAinsider.com; Nahu.org; healthdecisions.org)