I am getting ready to retire. Target date is January 2001 when I'll be 65 and my wife will have just turned 62. The big question is what to do about medical insurance. I'm looking for guidance in this area. Up to now I've worked for good companies with excellent medical insurance plans. In fact, my current employer pays about 90% of the premiums. Great deal. So what should I do to get ready for when my wife and I will be "going solo" in the medical insurance market. The combinations and permutations of insurance are astounding. This is where a little Foolishness is really needed to buy medical insurance intelligently. Any help from the group would be really appreciated. Perhaps, The Fool could publish an article (or series) on this topic. I'm sure I'm not alone on this.
You'll go right into Medicare, so you'll only need to pick up Medigap coverage for yourself. If you were not old enough to qualify for Medicare, you could have continued through COBRA with your last employer's group coverage (you pay 102% of premium) for another 18 months, but since you qualify for Medicare, I don't think you'll have that option; however, check with your employer to see if your wife will still qualify for continued coverage for the 18 month COBRA period. The group rate paid by your employer will be cheaper than any individual policy you could buy.
First check with the H. R. Dept as to what your company offers in their retirement package. Some firms include medical insurance in their retirement plans, usually at a reduction of your cash retirement benifit.
Thanks for your reply. You and Retired121 both suggested to first check with my HR department and I'll do that tomorrow. Your suggestion about paying for COBRA for 18 months is good too. However, what about when COBRA expires in 18 months? I think my question should be revised to ask what the board can recommend about selecting (1) a Medicare plan choice (A through J) and (2) advice on finding a good Medigap policy. Social Security offers decent recommendations about the first question but it seems like a less than straightforward problem to shop intelligently for a Medigap policy unless you are an insurance expert.
However, what about when COBRA expires in 18 months?I'll have to let you know later, as I'm facing the end of my COBRA coverage in <6 months and I'm still 14 years from Medicare; my individual health coverage options here in NJ are limited and VERY EXPENSIVE, even if I subject myself to an HMO!I think my question should be revised to ask what the board can recommend about selecting (1) a Medicare plan choice (A through J) and (2) advice on finding a good Medigap policy.I think you've got things a little confused. The A through J plan choices are for Medigap coverage, not Medicare. Since Medigap policies are well regulated, each company's offerings within each plan (A-J) is quite standardized now; simply pick what features you want to have in your Medigap coverage and shop the different companies on price. You should apply for Medicare before you turn 65 (you can apply up to 3 months before) so that coverage begins on the day you turn 65 without any lapses. You should have your Medigap coverage in place at that time also. You have up to 6 months after going on Medicare to get Medigap coverage without risk of rejection for any level of coverage you want (A-J), but don't procrastinate beyond that or they can reject you, limit your choices, or charge you higher rates.WTR
Thanks for the fast response. You cleared up the confusion. Have a great day.
Like you, my husband and I are retiring soon, within 2 or 3 months. We are eligible for COBRA but only for 18 months. We will not be eligible for Medicare for 12 years. Our company plan for retirees' health coverage is much more expensive than the private insurance quotes we've received--$900+ per month (company plan) vs. about $400 per month (private). That quote for private coverage is from Blue Cross-Blue Shield. Does anyone have suggestions for the best way to look for a good, stable insuror that we can use for the next 12 years? We would prefer a fee-for-service plan or PPO rather than an HMO. We would even be willing to go with catastrophic coverage, but that seems almost as expensive as regular health insurance. I agree that it would be great to have a Foolish series on medical insurance, the pitfalls to avoid, and the best way to select coverage. Any suggestions would be appreciated.ThanksRetire2000
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