Health Care Considerations Before Retiring

Amid retirement anticipation, it is crucial to take the time to make wise decisions regarding health care coverage.  Here are some things to consider at various times.

Retiring at any age: While some Medicare Advantage plans cover dental and routine vision services, regular Medicare and Medigap plans don’t. If you’re not planning to buy a Medicare Advantage plan or stand-alone dental and vision plans, take advantage of dental and eye checkups and services before leaving your employer.

Retiring early: Losing a company health plan before 65 requires finding an alternative. While it’s becoming rare, some companies offer employees health benefits in retirement, often a more affordable option. Additional possibilities include: COBRA (available up to 18 months), coverage on a spouse’s plan, working part-time to obtain insurance or a plan from a private or government exchange.

Retiring past age 65: By law, employer group health plans in companies that employ 20 or more people must cover employees at any age who continue working. If you are adequately covered under a group health plan based on current employment (not COBRA) in an organization with at least 20 employees, you will not pay a late enrollment fee for Medicare Part B or Part D. And a Medicare supplement plan can’t turn you down as long as you sign up during the Medigap Open Enrollment period – the six-month period that begins when you turn 65 and are enrolled in Part B. While on an employer-sponsored plan, you can sign up for Medicare Part A, but it is wise not to sign up for Part B since you could lose your guaranteed issue of a Medigap plan.

Before leaving an employer plan, compare premium and out-of-pocket costs between Medicare and your employer’s health plan. High-income earners, in particular, may save by staying on their work policy. Individual Medicare beneficiaries with incomes greater than $160,000 and less than $500,000 pay a $433.40 total monthly premium for Medicare Part B in 2019.1 Add a Part D premium – that ranges from $10 in some states to over $170 per month – and a Medigap policy, which could cost anywhere from $68 to $449 per month, and a work plan may be more cost effective.2,3

Planning for potential health care expenses has never been more important. Whether you’re retired or still working, we can help you find the best vehicles to put money aside for health care.