One of the biggest challenges people face when they’re preparing to retire is finding a way to cover healthcare costs. For many, the health insurance plan they’ve been accustomed to is no longer available once they stop working, and the options that do exist can be expensive and confusing. In this article we’ll help you sort through the options and find the right plan for your needs and budget.
Most Americans over age 65 get their healthcare coverage through Medicare, a national insurance program that provides hospital and medical coverage for most seniors. In addition to Medicare, people may choose to buy private insurance through the Health Insurance Marketplace or receive financial help to pay for their plan.
If you are a recent retiree, you’ll want to make sure you sign up for Medicare during your open enrollment period. Those who don’t will face a monthly penalty for missing this deadline. In the past, this penalty was much more severe for those who had a preexisting condition, but since the Affordable Care Act went into effect, health insurers can no longer deny you coverage or charge you higher premiums due to your health history.
Another option is to take advantage of the Click to view Consolidated Omnibus Budget Reconciliation Act , which gives former employees who lose their employer’s group insurance the right to continue that coverage for a limited time. But this isn’t a long-term solution, so it’s important to start searching for a permanent plan as soon as possible.
You can also find a good plan by looking for a local independent insurance agency that has contracts with the most popular providers in your area. An experienced agent will conduct a thorough analysis of your needs and budget, then guide you through the various plans available. They can even help you save by recommending a high-quality Medicare Advantage or Part D plan that’s ranked highly in the Centers for Medicare and Medicaid Services’ annual star ratings.
Finally, you can also consider investing in a health savings account, which is a tax-advantaged way to set money aside for future health expenses. These accounts can be used to pay for a variety of different things, including health insurance, prescription drugs and dental and vision coverage. The best part is that the money you put into an HSA comes out tax free as long as you spend it on qualified medical expenses. This is an excellent option for those who can’t afford to pay for a full coverage health insurance plan in retirement.