Getting Health (& Other) Insurance Coverage

Health Care Coverage

Given the high cost of health care, it's extremely important to have health insurance coverage when you are retire. Will you be covered under your employer's retiree health care plan, your "still working" spouse's plan, Medicare, and/or a private health care (medigap) policy? Are you eligible for Veteran health care benefits? Does COBRA coverage1 make sense for you? Whatever your choice(s) make sure you follow all guidelines for how and when to apply for coverage.

When choosing retiree health coverage, be sure to consider the impact of your decision if you want or need to change coverage in the future. For example Medicare includes optional prescription drug coverage (Medicare Part D). You can wait to enroll in a Medicare drug plan if you have other creditable prescription drug coverage but, if you don't have prescription coverage that is, on average, at least as good as Medicare prescription drug coverage, you will pay a penalty if you wait to join later.

Note, too, that once you reach age 65, most plans will coordinate their coverage with Medicare - some plans may do so even if you are eligible for, but not enrolled in, Medicare. Make sure you understand the coordination of coverage rules for your health care coverage.

Medicare

Medicare is our country's health insurance program for people age 65 or older.2 You are eligible for Medicare coverage if you or your spouse are eligible for Social Security benefits, or if either of you worked long enough in a government job where Medicare taxes were paid. The program helps with the cost of health care, but it does not cover all medical expenses or the cost of most long-term care.

Medicare has four parts: Part A (hospital insurance), Part B (medical insurance), Part C (combines Part A and Part B coverage), and Part D (prescription drug coverage). Medicare hospital insurance is free for almost everyone, but you do pay a monthly premium for medical insurance and prescription drug coverage, if elected.

You can get more detailed information about what Medicare covers from Medicare & You (Publication No. CMS-10050). To get a copy, call the Medicare toll-free number, 1-800-MEDICARE (1-800-633-4227), or go to www.medicare.gov.

Other Types of Insurance You May Need

Your insurance needs go beyond healthcare insurance. Check out Are You Properly Insured for more information. Keep in mind, that some types of insurance coverage - e.g., life insurance - factor in your age and/or health when determining rates.


1 The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law that gives employees and their dependents who lose their health benefits due to certain circumstances - e.g., voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events - the right to continue their health coverage from their former plan for limited periods of time. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan.

2 Certain people younger than age 65 can qualify, too, if they have disabilities, permanent kidney failure or amyotrophic lateral sclerosis (Lou Gehrig's disease).

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