For most people ages 50 to 64, the primary source of health insurance is an employer, either theirs or their spouse's, according to an AARP Public Policy Institute analysis. If they are retired, however, they are less likely to have access to coverage through an employer. In addition, about 9 percent of those 50 to 64 are uninsured but still working. Either they are self employed, or they work for employers too small to offer benefits or for too few hours to qualify. Options exist to fill the insurance gap between age 60 and Medicare eligibility at age 65.
Even though most companies do not provide insurance to retirees, it's still worth checking with your employer first. About 34 percent of retired people younger than 64 still have access to health insurance through their former employers. The Affordable Care Act has created a temporary program known as the Early Retiree Reinsurance Program, which helps employers provide insurance to retirees between age 55 to 64. So even if your employer has not previously provided health insurance to early retirees, it may do so now.
If you are planning to retire from your employer or are laid off, you can continue the same coverage for up to 18 months by paying the full premiums. While this is more costly than you would have paid as an employee, it is often less expensive than other options such as individual insurance. So, even though you may have to buy individual insurance later, you may be able to save by using COBRA for as long as you can.
Individual insurance is so-called because you don't buy it as part of a group. You can buy it for yourself and your dependents. A 60-year-old may find buying individual insurance to be a challenge because rates increase with age. Policies also sometimes exclude pre-existing conditions. If you've had no break in group or COBRA coverage, however, you have a right under the Health Insurance Portability and Accountability Act of 1996 to buy individual insurance that doesn't limit coverage based on pre-existing conditions. Individual insurance options include fee-for-service and managed care plans. In fee-for-service plans, you'll typically pay a higher premium but can go to any doctor you choose, with the plan paying a percentage of your costs. In a health maintenance organization, which is one form of managed care, you are required to see a doctor within the network. In a preferred provider organization, another managed care plan, you are allowed to see doctors outside of the network but will pay considerably more than if you stay within the network.
You may be able to buy health insurance through a trade or professional association or religious organization that you belong to. While you would be buying an individual policy, you would be doing so at group rates, which are typically cheaper. When evaluating this option, determine how complete the coverage is, whether it will cover preventive care, prescriptions and major medical and whether you can buy it for your family as well as yourself.
Thirty-five states offer health insurance to those who can't otherwise get it because of pre-existing conditions. The National Association of State Comprehensive Health Insurance Plans can tell you if your state offers such a program. While these programs allow access to insurance in cases when individual policies may not, they often do so at expensive rates. A federal high risk pool, known as the Pre-Existing Conditions Insurance Plan, is available in all states. To qualify, you must have been without insurance for at least six months.
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