The first waves of Baby Boomers have turned 62 this year and started claiming Social Security benefits. But, according to the National Association of Insurance Commissioners (NAIC), many are confused about their post-retirement health insurance options. As a result, the association has offered 10 tips that planners should consider with their clients:
- Plan ahead for retirement health insurance needs. Consider that Americans are eligible for Medicare at age 65 so this needs to be taken into account if there is someone retiring at an earlier age.
- If retiring before the age of 65 and therefore, are not eligible for Medicare, is there eligibility in place for COBRA (Consolidated Omnibus Budget Reconciliation Act), a federal law that typically entitles one to continue the employer’s heath insurance coverage up to 18 months. You need to check the state insurance department in the client’s state on this.
- If the client is not eligible for COBRA, consider a catastrophic or high-deductible medical plan, which typically carries lower premiums than other individual policies. Of course, keep in mind that people with serious pre-existing health problems, such as heart disease, diabetes, or multiple sclerosis, usually cannot get such insurance.
- Before becoming eligible for Medicare, consider purchasing a major medical plan to cover doctors’ visits, drugs, and hospital care. These plans vary in costs and medical benefits, and can include indemnity plans, preferred provider organization plans, health maintenance organization plans, and point-of-service plans.
- Naturally, take sufficient time to research individual health insurance plans. It’s suggested you shop around and ask a lot of questions. Naturally, to avoid purchasing a fraudulent plan, call the state insurance department.
- If the client is 65 years or older and will be using Medicare as the primary health insurance, then you have to make sure the client understands the different coverage options available When enrolling, you will need to decide whether the client wants traditional Medicare or a Medicare Advantage plan. On the latter, find out about which hospitals and doctors are in-network.
- When enrolling in Medicare, consider the purchase of a separate Medicare supplement (Medigap) policy that pays for medical/hospital expenses and deductibles not covered by Medicare.
- When choosing any options, consider enrolling in prescription drug coverage. Remember that if coverage is waived during enrollment time, then at a later date there may be a penalty fee involved.
- Watch out for those health discount cards. They are not insurance. If your client is considering purchasing a health discount card, investigate whether the company is legitimate and whether there have been any complaints filed against it. Make sure you know what types of services the card covers and whether the doctors/dentists accept it.
- Consider the purchase of long-term care insurance. Admittedly, it is not for everyone. Keep in mind that Medicare doe not endorse or sell long-term care insurance.
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