Health Care for the Stars: Lessons on Retirement Planning from Venus Williams' Experience
Managing Health Care Costs in Retirement: A Comprehensive Guide
As retirement approaches, one of the most significant concerns for many individuals is managing health care expenses. Proactive planning and understanding the various insurance options available can help avoid financial shocks and ensure a smoother transition into retirement.
For those without health coverage from a spouse, there are several insurance options to consider. These include short-term health insurance plans, Affordable Care Act (ACA) marketplace plans, employer-sponsored retiree health plans, COBRA coverage, private health insurance from companies like Cigna, and Medicare Advantage and Medicare Supplement plans for those eligible or approaching eligibility.
Short-Term Health Insurance Plans
These temporary policies are designed to cover gaps in insurance, such as after retirement and before Medicare starts. UnitedHealthcare offers short-term plans that provide more coverage than many competitors and are generally cheaper than standard health insurance. However, they have significant limitations, such as lack of protections for pre-existing conditions, coverage caps, and the possibility of denial or higher rates based on health history. These plans are best suited for coverage lasting only a few months before Medicare coverage begins.
Marketplace (ACA) Plans
Retirees under 65 can shop for ACA marketplace plans, which offer comprehensive coverage including protections for pre-existing conditions. Special enrollment periods may apply if you recently lost coverage due to retirement or other qualifying events. These plans usually have more benefits than short-term plans but can vary in cost depending on income and subsidies available.
Employer-Sponsored Retiree Health Plans
Some retirees may have access to post-retirement health benefits offered by their former employers, which can bridge the coverage gap until Medicare eligibility.
COBRA Coverage
Retirees who recently left a job with employer health insurance may continue their previous coverage for up to 18 months through COBRA. However, COBRA premiums tend to be high since the retiree often pays the full cost.
Private Health Insurance through Companies like Cigna
Cigna and similar insurers offer various plans geared toward early retirees, emphasizing options with broad networks, preventive care coverage, and online tools to manage care and costs.
Medicare Advantage and Medicare Supplement Plans
Once Medicare starts, beneficiaries often choose plans like Medicare Advantage from AARP/UnitedHealthcare for bundled coverage at affordable prices or combine Original Medicare with a Medigap plan for more flexibility, though usually at a higher monthly cost.
Planning ahead and understanding the pros and cons of each option is critical, as health insurance is often the biggest hurdle for early retirees. Many resources recommend evaluating these options carefully and considering the timing of Medicare enrollment to minimize gaps in coverage and unexpected expenses.
In summary, before Medicare kicks in, retirees usually manage health care expenses using short-term plans, ACA marketplace plans, employer retiree benefits, COBRA, or private insurance tailored to early retirees, and then transition to Medicare plans at age 65.
It is essential to plan for health insurance coverage before retiring to avoid financial surprises. The unknown of obtaining personal health insurance after retiring can be scary for many people, but with proper planning and research, retirees can find the best insurance solutions to meet their needs.
[1] https://www.forbes.com/sites/nextavenue/2019/01/14/how-to-choose-health-insurance-when-youre-retiring/?sh=59871f3d32d2 [2] https://www.cigna.com/individual-and-family/health-plans/retiree-health-plans [3] https://www.aarp.org/health/health-insurance/info-2019/health-insurance-for-retirees.html [4] https://www.healthcare.gov/coverage-outside-marketplace/medicare/medicare-and-you/part-d/index.html
- For those planning for retirement and expecting to be Medicare-ineligible, it might be prudent to consider short-term health insurance plans, like those offered by UnitedHealthcare, as a temporary solution to bridge the gap before Medicare starts.
- As retirees become Medicare-eligible at 65, selecting a Medicare Advantage plan from AARP/UnitedHealthcare or a Medigap plan for more flexibility can provide adequate coverage at an affordable price, ensuring health-and-wellness needs are met under the umbrella of science-backed health care solutions, such as those offered by Medicare.
