Affordable Health Insurance for 65+

Q&A
Jim Miller
"Savvy Senior"

DEAR SAVVY SENIOR: Can you help me locate affordable health insurance? I will be retiring soon and need to find some health coverage to last me until I'm eligible for Medicare at age 65. Any ideas? - Insurance Shopping Cindy

DEAR CINDY: For those who don't have health insurance - because of an early retirement, layoff, divorce or a preexisting medical condition - options are available. Here are some different avenues to look into.

COBRA: Depending on how long you need coverage, one possible option is to purchase a policy under COBRA (Consolidated Omnibus Budget Reconciliation Act), a federal law that allows you continued coverage under your former employer's insurance for up to 18 months. (Spouses, divorced spouses, widows, widowers and dependent children can be covered for up to 36 months).

To be eligible for COBRA, your company must employ at least 20 workers. With COBRA you pay the entire premium yourself, plus 2 percent in administrative costs - which means a big price hike if your employer was subsidizing your premiums.

To learn more, contact the U.S. Department of Labor's Employee Benefits Security Administration at 866-444-3272 or visit www.dol.gov/ebsa. Note that many states require smaller companies (fewer than 20 employees) to offer some type of continuation of coverage to employees. For a database of health care coverage options by state, visit www.nahu.org/consumer/healthcare.

Individual Policies: Buying an individual health insurance policy is another option to consider but keep in mind that you must buy a policy sold in your home state. In the vast majority of states, health insurance costs are based on the applicant's health history and can be very expensive. Any preexisting condition such as heart disease, diabetes, cancer, etc., can drastically increase your premiums or can nix your chances of being accepted at all.

Some states, however, require individual health insurers to offer everyone a plan, a mandate known as "guaranteed issue." To compare policies, visit www.ehealthinsurance.com.

If you need some additional help, contact a licensed independent insurance agent in your state at www.nahu.org/consumer/findagent.cfm.

Savvy tip: If you're denied coverage because of a serious preexisting medical condition, you may still be able to get coverage from a state-assigned risk pool. Thirty-three states currently provide high-risk pool coverage which you can apply for through an insurance agent or directly to the state.

Coverage costs more than private coverage because all the people in the pool have serious medical problems, but rates are capped generally between 125 and 200 percent of the average individual market premium.