03 September 2008

Insurance Gap: Retirement to Medicare

Complexity of reading material that the Bolds tackled this week to understand an option for health insurance. For more detail, see bottom of this entry.

Early retirement need for health insurance: For most of us, leaving employment means leaving affordable group health insurance and searching for a replacement policy to span the years to Medicare eligibility (age 65). With Americans favoring early retirement of 62 or even 55, that leaves a big gap in years for health coverage.

Continued employer insurance: The best deal has always been thought to extend coverage with the employer's group policy. So, we were pretty darn excited to receive news that Tom's employer, a large semiconductor company, would start offering "retiree insurance" for those not yet Medicare age. With a start date of October 1, Tom's prospect for affordable coverage looked bright. Even shining.

Groups change, premiums change: For Tom, the best deal may not come with this new offer. With numbers rounded up, his monthly premium would be $1000/month (with $500 annual deductible) or $800/month (with $3700 deductible). Cost for a spouse: additional $750/month.

Comparison shopping: The one plus from learning the figures is that Tom finally has a starting point for comparison shopping. He's still using COBRA from the employer, so there's a window of some months for comparison shopping and final decisions. Cost of understanding this baseline for comparison:
Reading time = 1+ hour
Complexity level = 4
(on scale of 1 to 10, with 10 being mind-boggling).

© 2008 Mary Bold, PhD, CFLE. The content of this blog or related web sites created by Mary Bold (www.marybold.com, www.boldproductions.com, College Intern Blog) is not under any circumstances to be regarded as professional, legal, financial, or medical advice. Or education advice. Or marital advice. Or even a tip.

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