Shop for an individual policy. For those between the ages of 50 and 64, an individual policy can be tricky, so it pays to shop around. It's a given that your most affordable choices will carry a high deductible, plus your medical history will be a factor in qualifying. While you may be generally healthy, I don't know anyone over 50 who hasn't had some past health issue that an insurance company could flag.
But it's not all gloomy. Seeing an opportunity, several health insurance companies like Humana, Aetna and Kaiser have recently introduced policies tailored specifically to this age group. To get an idea of what's available, an online resource like eHealthInsurance.com can be a good place to start, but it may make the most sense to work with an insurance broker.
See if your state has a high-risk pool. As a last resort, you may be able to get coverage through a state-run high-risk pool. This option is available to residents with pre-existing conditions who can't get an individual policy. Premiums are usually high and policies vary by state. The State Department of Insurance for your state can provide more information.
ASK SOME KEY QUESTIONS
When you get down to actually buying a policy, decide first and foremost how much you can afford to pay in premiums each month. Then, as you compare policies, be sure to ask these questions:
- What services are covered?
- How much is the deductible?
- What are the co-payments?
- What is the out-of-pocket maximum?
- Are pre-existing conditions covered?
While these questions may seem basic, asking them upfront could save you money and aggravation down the road.
LOOK INTO A HEALTH SAVINGS ACCOUNT
If you do end up with a high-deductible individual policy, a Health Savings Account (HSA) can help take some of the sting out of the medical costs you end up paying. An HSA is a tax-advantaged savings account that allows you to pay for qualified medical expenses with pretax dollars (you may want to consult with a tax professional to see how this would impact you). Similar to an IRA, you get a tax-deduction for the money you deposit each year, and the earnings can grow tax-free. You can easily make withdrawals from your HSA at any time with no penalty or taxes for qualified medical expenses. Any funds not used each year continue to accumulate in the account until needed.
TAKE CARE OF YOURSELF
Short of legislation for universal health care, rising costs are going to affect all of us in some way. The most important thing you can do right now is obtain the facts and make sure you're covered before you retire. And then, of course, stay healthy. Exercise, eat properly, don't smoke, and take advantage of preventive care. It will improve your mental and physical health, as well as protect your financial health, so you can enjoy your early retirement and all the full years ahead.
