A Comprehensive Guide to Early Retirement Health Care Options

Eversurance Health Insurance Team

Entering retirement before the age of 65 should be an exciting transition for your client. Although this transition can be exciting, leaving a job that provides health insurance benefits can be stressful. On one hand, you're free to enjoy retirement without the constraints of work. On the other hand, you now need to find health insurance to bridge the gap until you're eligible for Medicare at age 65.  More than ⅔ of Americans polled in a recent survey stated they were terrified their healthcare costs would skyrocket in retirement. As a financial advisor, you can help your clients understand their options for health insurance before the age of 65. 

  1. ACA Compliant Plan: Your client may be able to purchase health insurance through the Affordable Care Act (ACA) Marketplace. The ACA Marketplace offers a variety of plans from private insurance carriers, with different levels of coverage and costs. Your client may be eligible for subsidies based on their modified adjusted gross income to help offset the cost of the premiums. Working with your client to take advantage of these subsidies can enable early retirement by reducing costs. ACA Compliant plans are legally required to accept individuals with pre-existing conditions. There are no medical questions on the application and you cannot be charged more or denied based upon health history. 
  2. COBRA: If your client's employer has 20 or more employees, they may be eligible for COBRA coverage. COBRA is a law that allows your client to continue their current health insurance coverage for up to 18 months after they retire (29 months if disabled). However, COBRA premiums are typically the most expensive option, since your client is now responsible for paying both the employer and employee portion of the premium plus an additional 2%.
  3. Private Health Insurance (Off Marketplace, Short Term Health Insurance): Your client may also consider purchasing a private health insurance plan directly from an insurance company or carrier. Private health insurance plans may be a fit for high income clients who wouldn’t be eligible for subsidies available on the marketplace. Private health insurance plans vary widely in coverage, cost and maximum benefit, so it's important to shop around and compare different plans before enrolling. 
  4. Faith-based Sharing Program: Faith-based sharing programs are not insurance but can act similarly. In most cases, Members pay a monthly share amount, which is used to pay for eligible medical expenses of other members of the program (or their medical expenses when necessary). Faith-based sharing can be a cost-effective alternative for those who share similar beliefs and values. 
  5. Spouse's Health Insurance: If your client's spouse is still working and has health insurance benefits provided through their employer, your client may be able to join their spouse's plan. However, it's important to consider the cost and coverage of the spouse's plan compared to other options listed above.
At Eversurance it’s our mission to make health and Medicare insurance simple and clear for everyone. Eversurance is a nationally licensed health and Medicare focused insurance agency. We have built the industry’s first pre-65 health insurance cost-estimator and have a dedicated team of health plan advisors who work with financial advisors and their clients everyday. To learn more about health insurance options for early retirees, how to begin referring clients or anything else health insurance and Medicare related, schedule time to connect with our team by clicking here.