Re-evaluating your Health Insurance: Retirement and Medicare

Congratulations! You’ve decided to retire, and now it's time to sit back and enjoy it. To get the most out of retirement, it’s important to stay on top of your healthcare planning so you can maximize your health insurance coverage and reduce avoidable expenses. Here are a few things to think about as you leave active employment.

Pre-65 Retirement

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If you were covered by an employer’s health insurance plan and are not yet eligible for Medicare, you will be given the option of signing up for COBRA when you leave active employment.

While it often costs more than your employee coverage, it does allow you to keep the same doctors and same coverage you are accustomed to.
Many early retirees choose their final working date to align with the 18 months before their 65 birthday, so their COBRA coverage will cover them right up to their Medicare enrollment.

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Some companies offer pre-65 retiree benefits. These are often the same benefits you had as an employee and allow you to cover your dependents — but the rates are often different.

You can often find details about this kind of coverage through your HR department or on your HR web portal.

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Choosing a Marketplace plan is also an option for coverage. The Marketplace is a great one-stop-shop to compare qualified Affordable Care Act-compliant health plans side by side.

You cannot be denied for pre-existing conditions. The only criteria that can be used for plan eligibility or price are your age, your sex, and your smoking status.
All of the Marketplace plans guarantee 10 essential health benefits, including prescription drugs, mental health coverage, preventive services, and emergency services.

Turning 65

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Your 65th birthday is a special milestone for many reasons. One of them is that 65 is when you qualify for the many parts of Medicare health coverage.

Learn more about how to enroll in Medicare at 65 here.
A crucial point to consider is that Medicare is individual coverage, so you cannot add your dependents or family members to the coverage. Your other family members might need to consider a Marketplace plan, COBRA, or coverage through their own employer if available.

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If you are still working full time and you have a qualified health plan through your employer, you can delay your Medicare enrollment.

Many employers recommend that you enroll in Part A (hospital coverage) when you turn 65 because there is generally no cost to you for this coverage. However, you will want to maintain a qualified health plan with no gaps in coverage. You’ll receive a coverage termination letter from your employer when you are ready to retire which you’ll need to be eligible for Medicare enrollment after age 65. Without this letter, you could be charged Late Enrollment Penalties.
At the time of your delayed Medicare enrollment, your employer will submit a form that documents that you have had coverage the entire time from your 65th birthday until you enrolled.

A Caribou HealthPlanning Analysis can help you and your family ensure everyone is covered and that you’ve maximized your options to enjoy a long and full retirement.

Learn More:

When does Medicare coverage start? | Medicare.gov

Top 5 things you need to know about Medicare Enrollment | CMS.gov

Last Revised August 2nd, 2022