Having medical insurance in place is a good idea for anyone and can help bear the burden of healthcare costs, if and when treatment is required. This can be especially important for those that have retired and are at an age where medical treatment may be required more often. For those that have finished their working life, retiree medical insurance is an important issue and the following are five things to know about this.
Check Your Eligibility for Medicare
Medicare is a government funded health insurance program, which can be a way for seniors to cover the cost of many of their medical requirements. It is open to those that are 65 years and over, and an eligibility tool at the Medicare website can be a way to find if you qualify for the program. Medicare basically includes two main parts. Part A is known as Hospital Insurance and is typically free to those that enroll in the program. Part B is called Medical Insurance and a monthly premium is required for those that want this included (as of 2011 the premium is $115.40). It is also possible to opt for Medicare Part C (known as Medicare Advantage Plans) and Medicare Part D (known as Medicare Prescription Drug Coverage). These are available from private insurance companies approved by Medicare. When someone becomes eligible for Medicare they can choose the parts that they want included and there are various options for this. For the benefits that it provides, Medicare is a type of retiree medical insurance that everyone 65 and over should consider.
Consider Medicare Gap Insurance
While Medicare covers many of the costs of medical treatment, it is not all encompassing and there are still a number of medical treatments and services that are not included. A type of retiree medical insurance that can help with this is Medicare gap insurance. This is offered by private insurance companies and, as the name suggests, is designed to provide coverage of the gaps in the Medicare plan. There are a number of standard supplemental plans available and these can be used to cover the cost of a variety of treatments. Typically there will be a monthly premium to pay for Medicare gap insurance, although for more complete coverage than only standard Medicare it is something to consider purchasing.
Look at Employer Retiree Medical Benefits
Those that intend to retire before the age of 65 will need to consider other methods of paying for the years of retirement, until such time that they can apply for Medicare. Many employers provide their staff with the option of retiree medical insurance as a benefit, and this is something to consider if it is available. However, there can be a few conditions to being eligible and this includes having worked for a company for a set number of years and reaching a certain age (with 55 and 60 being common options). A benefit of this option is that an employer may pay for part of the monthly premium required, making it more affordable. However, it is important to check the exact details of what is involved in terms of how much it will cost and what the benefits are before signing up to this type of medical insurance.
Consider COBRA benefits
For those that have employer health insurance and are less than 18 months from the age of 65 when they retire, an option to consider is the Consolidated Omnibus Budget Reconciliation Act (COBRA). There is a stipulation in this that those that leave work, including those that retire, have the option of continuing their employer health insurance for a period of 18 months. Although the employer has no obligation to contribute to the premiums, and it is likely that the employee will need to fund the full monthly cost, it can be a simple way of keeping your employer health insurance going until such time that you become eligible for Medicare
There are a number of other options to consider for retiree medical insurance for those that retire prior to age 65. Individual health insurance from a private insurer is an option, although this can be expensive and if you have pre-existing conditions it can mean companies disqualify you from purchasing their insurance products. If you are a member of an association or professional organization, in many cases these can offer group insurance in much the same way as an employer and this can be a more affordable way to get access to health insurance. Another option to consider is applying to a state insurance high risk pool. These are generally provided by state governments for those that have been denied health insurance from a private carrier, although the premiums for these can also be expensive.
Individuals that retire need to consider how they will fund this period of their life and medical costs are a big part of this. Retirees are generally in an age group where healthcare treatments and medication are more likely to be needed. This means that they need to carefully consider retiree medical insurance and the details above are some of the things to think about. It provides information on some of the options which can be used by individuals to cover their healthcare costs in their retirement.