Because health insurance is so often tied to a job, seniors have a hard time finding affordable health care options. One of the issues faced by many seniors is that they aren’t eligible for Medicare until they are 65, and some seniors retire before then, and have to figure out how to cover health care costs until they can take advantage of Medicare.
Options for Affordable Health Insurance
If you are a senior, here are some of your options when it comes to finding affordable health insurance:
First of all, if you are 65, and you have Medicare, it’s important to understand that not every health care situation is covered. This means that you will need to find supplemental insurance, often called Medigap insurance. There are three different tiers of Medigap coverage:
- Plan A: Basic, with very affordable premiums.
- Plan N: Higher premiums, more coverage, and co-pays required with each health care visit.
- Plan L: Low premiums, but higher out-of-pocket expenses.
You can get more information about Medigap coverage, and help managing your options related to Medicare by contacting your State Health Insurance Assistance Program (SHIP).
In some cases, you can still get access to your employer’s health benefits, even if you have retired. Some employers will allow you to continue to access their health benefits program later. However, watch out if you are using COBRA, since COBRA can get expensive.
Another consideration is to extend your working years a little bit so that you still qualify for health care benefits. Many seniors continue working until they qualify for Medicare, just so that they can access affordable health insurance.
If you aren’t sure what options you have, an insurance broker can help you wade through the possibilities. An insurance broker can sell insurance from a variety of companies, which means that he or she has access to different plans. You can use an insurance broker to help you figure out what’s available, and what is likely to fit your situation. However, you do need to be aware that insurance brokers are paid on commission, so be wary of the plan that you choose.
Another option is to use health insurance aggregators to help you locate the right coverage for a reasonable price. This is especially important if you decide to retire before you are eligible for Medicare, and if retaining employer benefits isn’t an option.
With aggregators like eHealthInsurance.com can provide you with a number of options from different providers. Looking for private insurance before you have lapse in coverage is a good idea, since going without coverage for a period of time can lead to more expensive premiums.
Consider that you can save money on premiums if you are willing to pay more out of pocket. A higher deductible can lead to lower premiums. Also, consider pairing your high deductible plan with a Health Savings Account. This can provide you with a tax deduction, and tax-free growth — provided you withdraw money for qualified health care expenses.
However, if you have a chronic condition, or other expensive issues, a higher deductible might not make sense for you.
State Insurance Exchanges
By 2014, state insurance exchanges are supposed to be in effect. This is in time for the provisions of the new health care reform law to require everyone to purchase health insurance, or pay a penalty. State insurance exchanges (some states choose to default to a federal option) are supposed to provide a market where individuals can find compare plans and find affordable options. If you can’t afford health insurance, you will receive government help paying for your plan.
You can find out more about how health care will be affected by health care reform coming into effect, and explore your options, at HealthCare.gov.
The unfortunate truth is that it is difficult to find affordable health insurance as a senior if you are too young for Medicare, but don’t have a job that provides you with subsidized benefits. Your age, even if you are in good health, means that health insurance providers will charge you higher premiums.
Photo credit: Wikimedia Commons.
Miranda is a professional personal finance journalist. She is a contributor for several personal finance web sites. Her work has been mentioned in and linked to from, USA Today, The Huffington Post, The San Francisco Chronicle, The New York Times, The Wall Street Journal, and other publications. She also has her own personal finance blog: Planting Money Seeds.