The cost of health care in retirement is a top concern for retirees. Fortunately, many seniors have options for health coverage to help them manage their expenses.
In addition to Medicare, which pays a portion of many health-care costs, retirees can also choose supplemental insurance, or Medigap policies, which fill in gaps in coverage such as deductibles and copayments. Some supplemental insurance plans offer benefits like dental, critical illness, hospital, accident, short-term disability, final expense and vision insurance to assist with out-of-pocket expenses.
A recent study found that retirees who rely on employment-based supplemental retiree health insurance pay less for medical expenses than those with self-purchased supplemental health insurance or Medicare Advantage plans. Specifically, those with employer-based supplemental retiree health insurance paid only 7 percent of their total out-of-pocket healthcare costs.
Supplemental retiree health insurance is typically offered through the former employer’s health benefits program or privately by independent insurance providers. However, the ACA now allows individuals to buy supplemental retiree health insurance independently and avoid being locked into their former employer’s plan.
Some employers, especially large corporations with national employee benefit programs, continue to offer retiree health coverage to their former employees after retirement. These plans are typically a combination of traditional Medicare and an employer-based retiree health plan, or Medicare Advantage Visit the source. In these plans, the former employee must enroll in Medicare Parts A and B during their initial enrollment period – the 3 months before and after their 65th birthday. Depending on the plan, retirees can select their own doctors, and they can choose from an assortment of hospital, doctor, or specialty networks.
Whether to keep employer-sponsored supplemental retiree health or purchase a private Medigap policy depends on several factors, including where you live and how much you can afford to pay for your healthcare coverage. Costs vary from state to state, and premiums increase as you age. It’s important to consider all of your options carefully and talk with a Via Benefits agent before making a decision.
Individuals who enroll in Medicare Part B at or after their 65th birthday trigger a one-time Medigap open enrollment period. During this period, private insurers are not allowed to deny you insurance coverage or charge you more for a Medigap policy because of your past or present health history.