Early Retirement Health Insurance Options

Before you finalize your plans to retire by the age of 37, it is important to think through all aspects of your budget. A common major expense that people overlook when planning a retirement budget is health insurance. Currently, your health insurance may be paid for by your employer. However, this coverage may cease when you quit your job. Even though you are still young and may be very healthy at your current age, the reality is that accidents and illnesses happen all the time. You simply must have health insurance if you want to pay for the healthcare services you need in the months and years to come. By learning more about the different early retirement health insurance options available to most people, you can better plan for this aspect of your budget.

Your Top Three Choices

When you look at available early retirement health insurance options, there are three primary choices to consider. Each of these early retirement health insurance options has pros and cons that you should review carefully. Therefore, analyzing them will help you make a more educated decision on meeting your health insurance coverage needs.

Group Retiree Coverage

One idea is to purchase group retiree coverage. When you need early retirement health insurance options for you and your family, this is a generally affordable coverage available regardless of age. There are many different group retiree plans available to consider through insurance companies.

In many cases, these plans are available through your current employer. Moreover, this is particularly true if you are retiring from a major corporation. Be sure to check your spouse’s employer for the availability of this coverage as well. Typically, you must sign up for this coverage before you leave your current employer. However, this is not always the case.

Costs and benefits can vary substantially from plan to plan. Still, you may find that this type of group coverage has many of the same features as the employer-sponsored plan has. For example, many group retiree plans include full coverage for well-checks and preventive care. They may also provide coverage for prescription drugs, hospitalization, testing and more. If you qualify for a group plan, this may be one of the more affordable ways to get health insurance when you retire earlier in life.

Currently, you may be many years away from needing to sign up for Medicare. However, the good news is that many of these plans integrate with Medicare as well. When you qualify for Medicare, it will often become your primary source of coverage. Your group retiree coverage will become the secondary source of coverage to fill in the blanks. If you are interested in getting group retiree health insurance coverage, it is important you explore the availability of this option before you retire.

Federal Exchanges

Group retiree coverage is one of the top early retirement health insurance options available for you to consider. However, it is not an option that is available to everyone. After all, you may be self-employed, or your employer may not offer this type of coverage.

Another idea to consider if you are exploring early retirement health insurance options is federal exchange insurance. This is a government-sponsored policy available through Healthcare.gov. Through this website, you will be able to search for plans available to you based on the state you live in. If you plan to relocate to another state after you retire, keep in mind that your coverage options and health insurance expenses may change considerably.

Many people who do not qualify for a group retiree insurance plan will need to purchase an individual policy. The federal exchange plans are very similar to an individual policy. However, they may be available at a more affordable rate. There is a wide range of plans to choose from through some of the top insurance providers in the country. You can choose from a range of deductibles, premiums, and co-pay amounts. In this way, you can find coverage that meets your specific needs. You can even research covered prescription drugs and medical providers that link to the coverage before you sign up.

Through the federal exchange, you may also qualify for a tax credit that can reduce the cost of your coverage. The tax credit is available based on your income level. Many people who retire early live on a very modest budget. Therefore, they may qualify for this money-saving tax credit. You can have hundreds of thousands of dollars or more in assets. However, the tax credit is based on income rather than assets. With this in mind, it makes sense to see if you qualify for a tax credit that can save you money on this type of coverage.

Recommended read – Ask Yourself This – 5 Questions for Retiring Early


Another idea to consider if you want to learn about the best early retirement health insurance options is to purchase a COBRA plan from your workplace. COBRA means Consolidated Omnibus Budget Reconciliation Act

Under this act, workers and their dependents obtain health coverage from the company continuously. It doesn’t matter if the job loss was voluntary or involuntary. COBRA plans are available through companies that have at least 20 employees. Moreover, you can obtain this coverage through your workplace or your spouse’s workplace.

You should be aware that your employer is no longer required to pay a portion of your premium when you are under the COBRA plan. With this in mind, you will generally see your out-of-pocket cost for the premium rise after you retire early. In addition, this type of coverage is often only available to you for up to 18 months after you leave the company. This is a temporary option for health insurance coverage. However, it can buy you time to shop around for a better policy under the federal exchange. Otherwise, you can explore other health insurance options available.

With a COBRA plan, you should continue to have access to the same health insurance policy you have at this time. Let’s say the policy renews at the start of a new year. You should be provided with the same coverage all employees in the company have access to. This may include coverage for maternity care, hospitalization, well-checks, tests, surgeries, prescription drugs and more.

As you can see, you have several early retirement health insurance options to consider. If you are trying to decide which of these coverage options is right for you, pay close attention to the premium cost and how it will affect your budget. Also, consider if you have ongoing needs for a pre-existing condition. Think if you require regular medical attention through frequent appointments. Do you need coverage for specific medications you take on a regular basis? Analyze these points. Then you can better decide which of the early retirement health insurance options are right for you and your family. If you have comments or suggestions regarding the health insurance for individuals who retire by the age of 37, please leave a message in the space below.

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