Retiring Soon? Here's What You Need To Know About Health Insurance

As retirement approaches, it’s easy to focus on the exciting parts—more free time, travel, and finally enjoying the fruits of your labor. But one area that requires serious attention is health insurance. Once you leave your employer-sponsored coverage behind, navigating your options becomes critical to ensure continuous care and financial stability.
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Here’s what you need to know about securing reliable health insurance as you head into retirement:

1. You May Not Qualify for Medicare Immediately
Many people assume that Medicare automatically kicks in at retirement, but eligibility doesn’t begin until age 65. If you plan to retire before 65, you’ll need to bridge the gap with other coverage options.

Coverage Options Before Medicare:

• COBRA: Allows you to extend your employer coverage for up to 18 months (sometimes longer), but it can be expensive.
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• Spouse’s Health Plan: If your spouse is still working and has employer coverage, you may be able to join their plan.
  
  
• Marketplace Health Insurance (ACA Plans): You can shop for coverage through Healthcare.gov or your state exchange. You may qualify for subsidies depending on your income.
  
  
• Short-Term Health Plans: These can be more affordable, but often offer limited coverage and may exclude pre-existing conditions.

2. Medicare: Know Your Options at 65
When you reach age 65, you become eligible for Medicare, but the system includes several parts and optional add-ons:

Parts of Medicare:

• Part A (Hospital Insurance): Usually free if you or your spouse paid Medicare taxes while working.
  
  
• Part B (Medical Insurance): Covers doctor visits, preventive care, outpatient services. There is a monthly premium.
  
  
• Part C (Medicare Advantage): A private alternative that bundles Parts A and B and often includes Part D.
  
  
• Part D (Prescription Drug Coverage): Helps cover the cost of medications.
  
  
• Medigap (Supplemental Insurance): Optional private plans that cover costs like copays and deductibles that Medicare doesn't.

Important: If you don’t enroll in Medicare on time (especially Part B or Part D), you may face late enrollment penalties.

3. Consider Total Costs—Not Just Premiums
When evaluating health insurance options, don’t focus solely on monthly premiums. Instead, look at the total cost of care, which includes:

• Deductibles
• Copayments and coinsurance
• Out-of-pocket maximums
• Prescription drug costs
• Network restrictions (especially for Medicare Advantage)

Retirees often underestimate these ongoing costs, which can significantly affect their budget over time.

4. Your Health Needs May Change—Plan Ahead
As you age, your health care needs typically increase. When choosing a plan, consider:

• Chronic conditions: Ensure your doctors and specialists are in-network.
  
  
• Prescription needs: Check if your medications are covered and at what tier.
  
  
• Travel plans: Medicare Advantage plans may limit out-of-area care; Medigap with Original Medicare offers more flexibility nationwide.

Long-term care: Medicare does not cover custodial care or assisted living. Consider long-term care insurance if it fits your budget.

5. Budget for Health Care in Retirement
According to Fidelity Investments, the average couple retiring at age 65 in 2024 will need about $315,000 for health care expenses during retirement (excluding long-term care).

Ways to Prepare Financially:

• Open or contribute to a Health Savings Account (HSA) while still working
• Build a dedicated health care emergency fund
• Work with a financial advisor to factor health care into your retirement planning

6. Don’t Wait Until the Last Minute
You should start planning your post-retirement health insurance at least 6–12 months before your desired retirement date. This gives you enough time to:

• Understand all available options
• Avoid coverage gaps or penalties
• Align your decision with your financial plan

Final Thoughts
Health insurance in retirement isn't one-size-fits-all. Your ideal plan will depend on your age, health status, income level, and future goals. By understanding the ins and outs of your options early on, you can protect both your health and your wallet during this next exciting chapter of life.

​At Choice Enrollment, we strive to provide our customers with reasonable rates and comprehensive coverage. We will exceed your expectations to assist you with whatever you need. If you have any concerns or want a free quote from our agency, don't hesitate to contact us at (719) 581-5527 or CLICK HERE. 

Disclaimer: The information presented in this blog is intended for informational purposes only and should not be considered as professional advice. It is crucial to consult with a qualified insurance agent or professional for personalized advice tailored to your specific circumstances. They can provide expert guidance and help you make informed decisions regarding your insurance needs.​