Millions of prospective seniors watch this week with envy as open enrollment for Medicare begins.
While there were high hopes that President Joe Biden would lower the qualifying age from 65 to 60 through his massive Build Back Better plan, we now know that’s not going to happen.
So what should a person do if they have left the workforce, along with their employer-provided health insurance, but are still too young to apply for Medicare?
Fortunately, there is more than one way to get reliable, affordable health insurance.
Alternatives to Medicare for those under 65
As you get older, healthcare becomes more and more important, which translates into higher premiums every year of your life.
But just because you’re about to retire or have already retired doesn’t mean you have to keep counting the days until your 65th birthday.
Take your health into your own hands by exploring one of these alternatives:
Talk to HR before you leave
Employers with fewer than 20 employees are not required by law to provide you with coverage after you retire, but some may offer partial or temporary coverage or even a full extension of your benefits upon retirement.
If you have a comprehensive benefits plan while you’re still employed, it may be worth inquiring about your company’s policies regarding retirement benefits. You should be able to find most of the answers to your questions in your plan’s benefit booklet.
If that doesn’t work, call your union or benefits manager and ask what your options are.
Visit the Obamacare Marketplace
Earlier this year, the Biden administration introduced generous new subsidies to Obamacare’s health plans as part of its $1.9 trillion Covid relief bill.
The new discounts, in effect through at least the end of 2022, will allow anyone earning more than $51,000 to find coverage for approximately $1,000 less per month than before the bill was passed.
So now is the perfect time to buy cheap health insurance on the Affordable Care Act marketplace.
Open enrollment begins November 1, but you may qualify for a special enrollment period for a variety of reasons, including if you retire before age 65 and lose your work-based health plan when you do.
Call on COBRA
A federal law called the Consolidated Omnibus Budget Reconciliation Act (COBRA) requires many private sector employers to keep you on their group health plan for at least 18 months.
This applies to any company with 20 or more employees.
But be prepared to pay your full premium, including the percentage your employer covered when you were still working. Plus, your insurer may pay an extra 2% to cover its administrative costs — which can translate into hundreds of dollars a month.
It’s not a cheap option, but it may be enough to get you across until you get Medicare coverage.
Get Coverage Through Your Spouse’s Employer
If you have that “freedom 55” lifestyle, but your partner still comes in every day, you might be in luck.
While it is often more affordable for some couples to get their own insurance coverage through their direct employer, once you retire, consider joining your spouse’s plan.
That should normally not be a problem to set up. Last year, 95% of employers who offered health benefits extended their coverage to an employee’s spouse, according to the Kaiser Family Foundation.
You may end up paying a higher premium, but it will be cheaper than not having health insurance at all when you need it.
Do a side job
It is becoming increasingly popular for older Americans to delay retiring or return to work part-time — whether that be for health insurance or other financial reasons.
The U.S. Bureau of Labor Statistics predicts that by 2024, about a quarter of the workforce, or 41 million people, will be over age 55 — including 13 million over age 65.
And more than half say they work after retirement for financial reasons, according to a report from the Transamerica Center for Retirement Studies.
Getting to work on your terms after retirement isn’t such a bad idea. find one profitable side business based on your hobbies or talents, you can earn more pocket money or cash to cover your healthcare needs.
How do you pay your new premiums
Depending on the options available to you, there is a chance that the new price of your premium will be higher than you are used to.
And when you retire, you need to start managing your savings carefully.
Here are a few ways to free up some extra cash in your monthly budget to pay for health care:
Reduce the cost of your other insurance bills. If you haven’t compared quotes recently, you may be paying drastically too much for your coverage. You could save up to $1,000 a year on your auto insurance just by shopping around for a better price, and the same move could be save you hundreds on your home insurance, at.
Consolidate – and destroy – your debt. Credit cards can be useful, but they come with expensive interest. Tackle your credit card debt – and clear it up sooner – by flipping your balance on one debt consolidation loan with a lower interest rate.
Invest in a better future. Hopefully you have invested much of your career for retirement, but you don’t have to stop now. Try using an app that lets you: invest your “change” turn your pennies into a diversified portfolio.
This article provides information only and should not be construed as advice. It comes without any kind of warranty.