When you start your retirement early before turning 65, it is important to find health coverage that will get you to Medicare.
You may have a number of options from which to choose when selecting a health plan. The best choice for you likely depends on your income, your health and the network of medical providers to which you want access.
COBRA (continuing group coverage)
You may be able to continue your group health insurance benefits through COBRA. The COBRA Act, passed in 1986, is a federal law that requires employers with 20 or more employees to allow employees to continue their health coverage after leaving employment. In most cases, you can keep COBRA coverage for up to 18 months. However, your employer will no longer pay a portion of your premium, so the coverage may be very expensive. If you are generally healthy, finding other coverage is probably a better option.
Here are a few scenarios in which getting (or remaining) on COBRA may be a good choice:
You are very happy with your plan and are OK with the monthly premium cost.
Your doctors accept your COBRA plan but do not accept other coverage options you have found.
You take medication that is affordable on the COBRA plan, but is much more expensive on other options you have found.
Obamacare/ACA Plans
In Coconino and Yavapai counties, Obamacare (Affordable Care Act) plans are available from carriers such as Ambetter, Blue Cross Blue Shield and Cigna. When you lose group coverage, you have a “qualifying life event” that allows you to enroll in a plan even if it is not currently an Open Enrollment period. Plans are required to accept you and must cover pre-existing conditions. Depending on your household income, you may qualify for a tax subsidy that makes these plans substantially cheaper. For example, a 62-year-old living in Flagstaff with an income of $50,000 qualifies for a $934 monthly premium tax credit – this means that the government will pay that much of that person’s monthly premium. The full price for this individual for Ambetter Balanced Care 11, a very popular ACA plan in Arizona, is $1,354. The monthly tax subsidy brings the cost of the plan down to $420 a month.
Short-Term Health Insurance/Non-ACA Plans
Short term health insurance plans are an alternative to traditional major medical health insurance and can be kept for up to three years. These plans are ideal for people who do not have major health issues and make too much money to qualify for a tax subsidy under the Obamacare marketplace plans. The plans do not cover pre-existing conditions, so they are not a good choice for people with major health issues. They will also deny coverage to you for certain conditions including cancer, diabetes and heart conditions. (These types of plans can refuse to cover you since they are not required to comply with the Affordable Care Act.)
Pros: Access to nationwide PPO networks, about 50% cheaper than Obamacare if you don’t qualify for a tax subsidy, can apply any time (not subject to Open Enrollment).
Cons: Do not cover pre-existing conditions, can refuse to cover you.
Finding the Right Plan For You
When you start your retirement early before turning 65, it is important to find health coverage that will get you to Medicare. If you’d like to go over your options, give us a call at 1-800-600-9663 ext 19, or go to AzRates.info and fill out the small form there and we will get back to you usually within an hour. FBN
By Ken Whitley
Need help deciding which plan is best for you and your family? Fill out our form at LehrmanGroup.com or give us a call at 928-813-7173, extension 19. We’ll help you determine which plans you qualify for, and your smartest option to take based on your particular situation.
Ken Whitley is the director of group sales at Lehrman Group.
