Health insurance in perspective
20 03 08 - 19:12
Contra Costa Times
Article Created: 03/20/2008 03:00:21 AM PDT
Perhaps the most common question I'm asked by pre-retirees who are thinking about retiring soon is about health insurance.
Should I continue to work until age 65? Are there any reasonable insurance products that I can buy if I retire before age 65? Are there risks that I need to understand before I retire before age 65?
For those who have guaranteed health insurance as part of a retirement package, these concerns are generally not an issue, except for the risk that this guarantee might be reneged before one reaches age 65. For many others, the COBRA option guarantees that insurance can be purchased for 18 months following job termination, the problem here being that the full cost of the insurance is now due each month, not just the subsidized amount the employee has been paying.
For those who are forced to retire or choose to retire before age 65 -- the age when one qualifies for Medicare -- there are real concerns. No insurance company has to take you; high blood pressure, overweight and/or other preconditions can lead to a refusal of coverage, or to a high premium with limited coverage.
But reaching age 65 makes things much better. All Medicare plans have to take all who apply. Each has to charge the same premium for all enrollees within the plan. Most provide catastrophic coverage with no maximum cap in total costs. Most pay for emergency services when outside the country.
In Northern California, I favor the Medicare Advantage HMO model offered by Health Net ($26/month) or Kaiser ($74/month). I'm also impressed by the Blue Cross Preferred Provider Organization, which has a monthly premium of $0! But there are reportedly more than 50 Medicare-based plans offered in Northern California, including those that supplement Medicare's fee-for-service model. Plans differ in co-pays and other costs, plus they differ in their lists of doctors and facilities. To learn more, call the Health Insurance Counseling and Advocacy Program at 925-947-3300 to attend a class or workshop so you can sort out your options.
No one who owns a home or has significant assets should be without catastrophic health insurance. For those retiring before age 65, try to lock in continued health coverage before leaving the job. For those 65 and older, Medicare offers a wealth of guaranteed health care options, all of which are underwritten by the federal government as an entitlement to the elderly.
George Fulmore teaches the course "The Art of Retirement" in the Mt. Diablo Adult Education program. The next class begins April 1; call 925-937-1530. Reach him at ArtofRet@aol.com.