Health Insurance After Retirement
Answering the health insurance question of where you’re going to get health coverage sometimes becomes one of the biggest hurdles to retirement or one of the most important factors in your retirement plan.
Before you reach the age of 65 you have to get some type of private insurance coverage and after the age of 65 you can go on Medicare. That also means that you’re going to need some type of Medicare supplement or Medicare Advantage plan as well as a Medicare Part D prescription plan.
Let’s break down all of these plans. Whether you’re looking to retire before 65 or you just need health insurance before then you have a couple of options.
First, you’ll have your employer plans if you’re still working. That is a pretty easy decision to just take advantage of what your employer offers. The question of what your options are depends on if you don’t have an employer plan or you’re planning to retire before the age of 65.
You can go with the marketplace plan, better known as Obama Care plans. Those plans all have to cover certain criteria and the pricing is usually pretty universal because it is subsidized based on your income. This means if you have lower income then you’re paying less in premiums.
However, to really see the low premiums you need to be making less than $50,000 a year. A lot of times when we’re looking at retirement and creating retirement income that you want for the lifestyle you want, your annual income is pushed beyond $50,000 per year.
To understand what qualifies as income under the Obama Care Plan you will look at any income that is taxable. This would include any rent from land or properties, your investment income, Social Security income, pension, etc. Each of these revenue streams that are taxable add up go towards that $50,000 mark and whether you will be paying the low premiums.
So one option is the Obama Care plan. It works well for some, but not all.
Another option is to go through the traditional health insurance plan. Most people don’t know that this is even still an option. What I mean by traditional health insurance is any plan that doesn’t follow the marketplace requirements of the Obama Care plan.
When looking at the Obama Care plan, there are certain requirements that every single person’s plan will cover, regardless of gender, age, or need. For example, the marketplace option of Obama Care requires pregnancy to be covered for everyone. You might be thinking, yeah, I don’t think that I need that coverage at this point in my life. Other requirements listed are mental health, substance abuse, etc. These might not apply to you either.
Another part of health insurance that I would like to mention because it determines that price is pre-existing conditions.
Sometimes pre-existing conditions really get a bad rap and people can’t believe that an insurance plan wouldn’t underwrite a certain pre-existing condition. However, certain traditional plans allow for people who are healthier to get lower premiums because, in theory, they’re not going to “cost” the insurance company much money due to you being at less risk. A pre-existing condition puts you at a higher “health-risk” (i.e. cost) for the insurance company; that’s just how insurance works.
Wherewith the marketplace Obama Care plan, if you have pre-existing conditions then that is the better plan for you.
Now let me define pre-existing conditions a little bit because it has been defined differently by various health insurance plans. For the most part, a pre-existing condition is where you have been seen by a doctor and treated for something within the last couple of years. A pre-existing condition is not something that happened 20 years ago and you’ve never been to a doctor since. If you currently have a diagnosis from a doctor and a treatment plan for an ongoing health issue, then that will qualify as a pre-existing condition.
To recap, traditional insurance can be a great option for those people who are healthy and at lower risk while the marketplace insurance plan of Obama Care would be a good place for those with pre-existing conditions.
The third health insurance option you have is a Medical Sharing plan. A lot of times Christian Ministries will offer this plan and I believe Samaritan’s Purse is one of those options.
Personally, I use Medishare. Instead of paying a health insurance premium, they call it a share that you pay. So each month that share goes towards other people’s medical costs. If you personally need something then you take it out for what you need.
Now there are pre-existing conditions that can go through those too with some exclusions, so you might want to check first, but that could be another great option.
Outside of those, there are also some stand-alone coverage plans. If you just need some in-between coverage for a short period of time, there are options.
We have a team of specialists that are here and ready to answer your questions and find the best plan for you now.
Now, when you pass the age of 65, you’ll start with Medicare and the most common form of Medicare we see is a Medicare supplement plan. This means that Medicare pays first and the supplement takes care of the rest, so most of your healthcare costs are covered.
You’ll also need to get a Medicare Part D plan to pay for your prescription coverage as well. Because these needs are so common you will see that most of the Medicare Supplement plans are quite similar.
What you want to make sure to ask or look out for when comparing plans is making sure that you work with a company that is independent. This means that they offer different plans and will help you to figure out which plan best suits your needs.
This is important because over the years we have found that some companies come in at a lower premium initially, but then increase their premiums over time. The independent insurance advisors will know the rate history and trends and will be able to help you to decide which plan is best for you.
Another option you have is a Medicare Advantage plan. These plans are designed for you to pay a lot less upfront or each month, but you might have a deductible or co-pay.
So again, for the healthier person who is used to paying deductibles or co-pays, maybe they already have money set aside in a Health Savings Advantage Plan (HSA), then this Medicare Advantage plan could be a great tool.
Which makes the most sense? That’s for you to find out. You really need to talk to someone to determine how your lifestyle and health history fit into a plan.
For example, if you travel a lot throughout the United States, then an Advantage Plan might not be a good fit since it is a more regional plan. It all depends on your lifestyle.
I’ve given you many different health insurance options, but how you answer the question of “Which healthcare insurance plan is right for me after retirement?” really depends on your needs, your health history, and your lifestyle.
The most important thing is to talk to a specialist, someone who is independent and knows the different ways to figure out what will work for you. Don’t forget to ask questions about premiums, plan terms, and rate history because it is important to know what you’re buying.
If you still have questions or would like to have us help you, give us a call and we’ll put you in touch with one of our healthcare specialists.
Now is the time to review your options because if you’re over 65 and looking for a plan, we’re in an open enrollment period. This means that you can make changes and I want to make sure that you think ahead of retirement and be prepared before the end of open enrollment.
Give us a call, we’ll answer your questions and connect you with some of the specialists we work with to help answer the questions you have and make sure that you get the best health insurance coverage for your current situation.
With the potential healthcare reform changes ahead, it is more important than ever to have a specialist you can turn to!
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