MoneyDo: Early Retirees: How to Bridge The Health Insurance Gap

Are you thinking of retiring before 65? Have you thought about what type of health insurance you’ll need to bridge the gap until you can apply for Medicare? It’s important to have a plan in place for those gap years.

Here are some of the common options available:

Employer Options – Some employers provide retiree health benefits capable of covering you until Medicare eligibility. Check with your benefits administrator to find out if you have any options available.

COBRA – The COBRA option allows you to stay on your employer’s group health plan, but you pay 100% of the premiums including a small administrative fee. COBRA can get very expensive, and it has a time limitation – it can last for 18 months after a qualifying event, such as termination or retirement.

Health Care Marketplace – Also known as the ‘exchange’ or “ Obamacare”, the health care marketplace is a way for individuals to shop for various health plans through a federally-operated platform. You can look at various options at HealthCare.gov, and depending on your income, you may qualify for reduced premiums.

Stand-alone Plans – Many insurance carriers offer plans outside of the Marketplace. Among the offerings are various types of plans, like catastrophic health plans, which have lower monthly premiums but have higher out-of-pocket annual deductibles.

Medical Cost Sharing Plan – Various organizations, like Medi-Share, offer alternative healthcare expense sharing options, which allow members to share in other’s medical expenses.

As you research and study alternatives, make sure you’re aware of what’s available, what works best given your health care needs, and the costs associated with them. If you need help, seek out a financial planner you can trust to help you make an appropriate decision for you.