What are the health insurance options for retirees younger than 65? Making retirement plans involves multiple lifestyle and financial considerations by the individual.
However, among the important aspects for people who want to retire before reaching the age of 65, which is the standard traditional retirement age, getting proper health insurance is one of them.
Besides, health insurance is important for ensuring individual access to quality care and managing medical expenses. For retirees younger than 65, finding cheap and appropriate health insurance plans can be daunting because of the gap between Medicare eligibility and early retirement.
In this article, we will be discovering what early retirement is, the factors to consider, and the multiple available options for individuals who are under 65 and have retirement plans.
What is Considered Early Retirement?
Generally, early retirement is referred to as retiring from a workplace or the workforce before the age of 65, which is the traditional age. Moreover, this is the period a person becomes qualified for Medicare.
This is a federal health insurance program for elders. This is because many people are not qualified for Medicare until they are 65 years of age. Meanwhile, people with job-based health insurance may need a new source of health coverage.
Health Insurance Factors To Consider In Early Retirement
When making plans for health insurance for retirement, there are some factors that you need to consider. They include:
- Coverage.
- Pre-existing conditions.
- Costs.
- Alternative coverage options.
- Network.
- Retirement accounts.
- Eligibility.
- Types of plans.
Health Insurance Options For Retirees Younger Than 65
As mentioned previously, there are multiple health insurance options for individuals younger than 65 who have plans of retirement. If you are one of them, here are the available options you can consider:
- Health Insurance Marketplace (ACA Plans).
- Private Health Insurance.
- COBRA Coverage.
- Medicaid.
- Spousal Insurance.
- Retiree Health Benefits.
- Short-Term Health Insurance.
- Funds from your Health Savings Account (HSA).
Health Insurance Marketplace (ACA Plans)
Health insurance marketplaces were established by the Affordable Care Act, also known as ACA, where retired individuals can buy individual health insurance plans. Meanwhile, you can qualify for subsidies to reduce the premium costs based on your income.
Private Health Insurance
Instead of purchasing from a marketplace, you can consider purchasing a health insurance quote from a private insurance provider. Besides, the plans differ based on cost and coverage. This is why it is important to compare various offerings before choosing.
COBRA Coverage
If you were covered under an employer-sponsored health insurance plan previously, COBRA, also known as the Consolidated Omnibus Budget Reconciliation Act, enables individuals to enjoy continuous coverage for up to 18 months. However, you will need to make full premium payments as well as a small administrative fee.
Medicaid
As one of the health insurance options for retirees younger than 65, Medicaid is a joint state and federal program designed specifically to offer coverage to low-income families and individuals.
Meanwhile, to qualify for Medicaid, you need to meet the federal and state-specific eligibility criteria. In addition to this, the structure of this program can differ between states. Nevertheless, you can be eligible for Medicaid depending on your state of residence and income.
Spousal Insurance
Insurance through a spouse is another health insurance option to consider if you are planning to retire before the traditional age of 65.
Hence, if your spouse or partner has employer-sponsored health insurance and is still working, you might be able to join their health insurance plan. Instead of buying an individual policy, sharing one with your spouse is cost-effective.
Retiree Health Benefits
Health benefits are offered by some employers to retirees before they clock the age of 65. It is advisable to ask your employer if they provide such benefits and understand the conditions and terms behind these benefits.
Short-Term Health Insurance
Short-term health insurance plans offer temporary coverage and can be cheaper than other available options. However, keep in mind that these insurance types might not cover pre-existing conditions and provide limited benefits.
Funds from Your Health Savings Account (HSA)
Another way to receive health insurance coverage as a retiree under the age of 65 is through your health savings account. So, while you are working, if you contributed to your HAS, you can use the money to cover qualified medical expenses without tax implications during early retirement. This includes coinsurance, deductibles, and copay expenses.
Bottom Line
For retirees who are younger than 65, obtaining the perfect health insurance plan is important for maintaining your overall health and handling your medical expenses.
Since there is a wide range of options to explore, from COBRA to ACA Marketplace plans and short-term insurance, it is important that you review each option based on your personal needs, cost, and coverage.
By understanding the involved factors and your health insurance options, you can make the right decision to meet your health and financial goals.