I will be retiring in a few months and need to get some health insurance for my wife and me until we can enroll in Medicare. What are my options? — About to Retire
There are several places early retirees can find health insurance coverage before Medicare kicks in, but the best option for you and your wife will depend on your income level and your health care needs. Here’s where to look.
Government Marketplace: If your yearly income falls below the 400 percent poverty level after you retire, the Affordable Care Act (ACA aka Obamacare) marketplace is probably your best option for getting health coverage because of the premium subsidies they offer, which will reduce the amount you’ll have to pay for a policy.
ACA health insurance is major medical insurance that covers essential health benefits with no annual or lifetime coverage maximums. And they can’t charge you more or deny you coverage because of a pre-existing health condition.
To qualify for the subsidies, your household’s modified adjusted gross income for 2019 must be under $48,560 for an individual, or $65,840 for a couple.
If your income is just above these thresholds, you should talk to a tax advisor about perhaps making a larger IRA contribution or strategically timing retirement account withdrawals to help you qualify. To see how various levels of income might affect your premiums and subsidies, see the subsidy calculator on the Kaiser Family Foundation website at KFF.org/interactive/subsidy-calculator.
To shop for marketplace plans in your state, visit HealthCare.gov or call their toll-free helpline at 800-318-2596.
If you find that you are not eligible for the subsidies and the premiums seem unaffordable, look into ACA-compliant plans that you can purchase off the marketplace directly from the insurance carrier or through a broker. In some states, you might find plans with lower premiums, especially on silver plans.
To find off the marketplace policies, contact a broker or agent to assist you.
COBRA: If you need health insurance coverage for less than 18 months, another option you may want to consider is COBRA, which allows you to remain on your former employer’s group health plan, but not every employer plan is COBRA eligible. Contact your employer benefits administrator to find out if yours is.
In most cases COBRA is expensive, requiring you to pay the full monthly premium yourself. But, if you’ve already met or nearly met your employer plan’s deductible and/or out-of-pocket maximum for the year, and don’t want to start over with a new plan; or if you find your employer’s health plan to be better or more affordable that the other options, it makes sense to keep your current coverage under COBRA.
*Cobra is not considered credible coverage for enrollment in Medicare.
Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior.org. Jim Miller is a contributor to the NBC Today show and author of “The Savvy Senior” book.