Healthcare Blog

Feelin' Alright

Know Your Health Coverage Options When Considering Retirement

You made it! You have been working since you were 16. After college, a large employer selected you to head up their new marketing department. Your 35-year tenure at the company was a great experience, but you've raised a family and now are eager to spend time with your new grandchild. You've decided it is time to retire. You can live comfortably on retirement funds and a small pension your employer offered.

When you leave the company, the Human Resource department offers you a COBRA medical plan continuation policy. You have an excellent health plan with your employer, and with COBRA you would have the same rich benefits with a prescription drug plan and would not have to change physicians. The company medical plan paid for most of your ongoing diabetic problems, and that cancer episode five years ago has been treated successfully and is no longer a threat. So, you decide to go with COBRA for 18 months and then get your own health insurance plan. You should have plenty of options and carriers to choose from, right? After all, everybody wants Baby Boomers: there are so many of us!

You contact the local insurance agent and fill out an application. The agent calls you the next day. "Fred, I'm sorry, you are uninsurable!”

With those three words – "you are uninsurable," obtaining health insurance is now critical to living the lifestyle you thought would be there in early retirement. More and more retirees are hearing those three words these days. According to a recent study by the American Hospital Association, in the next few years, six out of every ten Baby Boomers will be managing more than one chronic condition. More than one out of every three Boomers – more than 21 million – will be considered obese. One out of every four Boomers –14 million – will be living with diabetes. Nearly one out of every two Boomers – more than 26 million – will be living with arthritis, and eight times more knee replacements will be performed than are today. Baby Boomers looking for health insurance before the age of 65 will find it a real challenge to obtain adequate coverage!

If you are healthy, insurance companies offer a wealth of various deductible plans, including new Health Savings Accounts. The cost of these plans relative to group sponsored plans can be 20 to 50 percent less. But what about Fred? You see, Fred had cancer five years ago and is diabetic. Insurance companies will not accept him for an individual health policy. What are his options?

• After a COBRA policy time limitation is exhausted, most carriers offer what is commonly called a "conversion" policy. You must apply within 31 days of leaving the COBRA plan.


• The 1996 Health Insurance Portability and Accountability Act, or HIPAA, mandates that insurers accept a limited number of policyholders each year who are uninsurable.


• Some insurance companies may accept you, but may limit or exclude benefits for either a current illness or medical condition.


• Most states mandate that insurance companies offer HMO's and an annual open enrollment period. If you meet the residency requirements, are not under Medicaid, and are not in a hospital or a confined medical setting, you are eligible.

So know your health coverage options when considering retirement. It's a vitally important step toward feelin' alright about your future!

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