Upon retirement, you may lose the group health insurance coverage offered from your employer. In some cases, the insurance can be extended for a short period of time, but in most others it may discontinue altogether or become too expensive to maintain.
The dividing line for most retirees is age 65. If you are younger than age 65 and you cannot continue your group health insurance coverage for any reason, the next best option is to purchase an individual or family plan from a provider such as Aetna, Anthem Blue Cross, or United Healthcare among others.
If you are over age 65 and losing group coverage, then you will need to enroll in Medicare Part B (if you have not already done so) and purchase supplemental coverage. The two options available for retirees over age 65 are traditional Medicare supplements and Medicare Advantage plans.
Many retirees are age 65 or older when they lose their group health insurance coverage. In some cases, they can maintain their current group coverage, but in many cases they are involuntarily dropped from the plan.
In fact, many large companies are discontinuing health insurance benefits altogether for retired workers over age 65 whether they recently retired or were offered health benefits in the past.
The good news is that those who are both voluntarily and involuntarily losing group health insurance can almost always purchase a supplemental plan on a guaranteed issue basis. In this case, Medicare will be their primary coverage. Those over age 65 must first be enrolled in both Medicare Part A and Part B and then they can best decide how to supplement the gaps in Medicare.
The first option is to purchase a traditional Medicare supplement. There are ten plans to choose from and each offer a varying degree of coverage.
There are no traditional Medigap or supplemental plans that cover prescription drug coverage, so it is wise to purchase a stand-along Part D drug plan unless credible rx coverage is available elsewhere.
Supplemental plans and Part D coverage can both be compared on price and purchased direct (at no additional cost) from independent agents who represent a wide array of insurance carriers.
Medicare supplements are popular because the potential out-of-pocket expenses associated with these plans is very limited and predictable for the insured. Plan F is often purchased as it covers all of the gaps in Original Medicare Part A and Part B.
Additionally, almost all supplemental plans have no network restrictions to navigate. This means the insured can see any doctor or hospital that accepts Medicare patients. Those who purchase traditional Medigap plans can rest assured that they will not need referrals nor will they be turned away because of any network restrictions.
Advantage plans are not quite as popular as traditional Medicare supplements based on enrollment figures. Typically, this coverage is less expensive on a monthly basis and covers all what Part A and Part B cover and some of what they do not.
Those who purchase an Advantage Plan can have the potential for larger out-of-pocket expenses. It is wise to ask the insurance provider about the yearly maximum for out-of-pocket expenses both in and out of network.
It is also preferable to know about any network limitations that might exist with any Advantage Plan under consideration. In some cases, certain medical facilities and doctors will choose not to accept one or more Medicare Advantage Plan. These limitations can become an issue for the insured if an out-of-network specialist or facility is recommended by their primary care physician.
Many Medicare Advantage Plans will include prescription drug coverage thus eliminating the expense of purchasing a stand-alone Part D plan. When deciding between the two options (Medigap and Advantage) it is wise for seniors to speak with an independent agent about both and consider their options both now and in the future.
Typically, Advantage Plans can be changed each year during open enrollment, but the insured is only allowed a one year free-look period if they wish to return to Original Medicare and purchase a traditional supplement.
That is to say, if the insured was enrolled in an Advantage Plan longer than one year and then desired to purchase a traditional supplement, the Medicare supplement provider can decline their application due to ongoing or past health concerns.
If you are under age 65 and losing your group health insurance due to retirement, then you will need to purchase coverage in the individual market. There are several well known and highly rated carriers providing both individual and family health insurance.
Health care reform has changed the landscape somewhat, but many plans are still available. Unfortunately, the cost of these same plans has increased with the implementation of the reform efforts, but no longer can children be turned down for coverage. However, health insurance providers can still charge significantly higher premiums for those under age 26 who have preexisting conditions.
Conversely, retirees under age 65 can still be turned down for coverage and/or issued policies with exclusionary riders. It is wise for retirees to shop around with an independent agent and to disclose their health backgrounds.
An experienced agent can recommend suitable and cost effective options for those under and over age 65. And remember, there is no additional cost whatsoever to use an agent to purchase health insurance coverage.
Should no provider be willing to offer health insurance coverage to the retiree, then the high risk pool in the state where the retiree resides can be investigated. The high risk health insurance pool can be the stopgap coverage that will bridge the time until Medicare eligibility at age 65 or until other reform laws allow for better access to health insurance.
Hyers and Associates, Inc. is a full service, independent agency offering Medicare supplement and individual and family health insurance policies direct to consumer.
We work with the leading insurance providers in several states in order to offer comprehensive and affordable coverage from several highly rated carriers. Contact us today to discuss your best options.