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I am reading all these posts about people that decide to retire in their 50's and early 60's and I am really curious about how they are handling the huge health insurance costs associated with being self-insured.
Isn't health insurance the main reason people are working till 65, Medicare age? We're talking a few thousand a month for insurance premiums.
I could easily retire at 60 if it wasn't for that situation, so I am wondering how the early retirees are handling it.
I retired at 61 and a half, and was fortunate that my employer kept me on their health insurance until age 65, when I went on Medicare. In order to qualify for that, I had to have at least 25 years with them, which I did. They paid 80% and I was quite happy to pay the 20%, as you can imagine. I realize that not all that many people will be in that lucky situation, but it is a partial answer to your question.
You can keep your health insurance after leaving employment by paying the cost yourself under a program called COBRA, but my understanding is that you can only do this for 18 months, and of course it could be rather pricey depending on how good the coverage was. If I am right about the 18 months, then you would have to wait until 63 and a half, then pick up Medicare at 65.
Mine and the wife alos pickup most of teh tab for health insurance and when we get 65 change to a supplement to medicare.Thise days are goign away tho especailly with teh new healthcare benefits mandate in the new healthcare law.
I retired at 61 and a half, and was fortunate that my employer kept me on their health insurance until age 65, when I went on Medicare. In order to qualify for that, I had to have at least 25 years with them, which I did. They paid 80% and I was quite happy to pay the 20%, as you can imagine. I realize that not all that many people will be in that lucky situation, but it is a partial answer to your question.
You can keep your health insurance after leaving employment by paying the cost yourself under a program called COBRA, but my understanding is that you can only do this for 18 months, and of course it could be rather pricey depending on how good the coverage was. If I am right about the 18 months, then you would have to wait until 63 and a half, then pick up Medicare at 65.
Quite right. COBRA (Combined Omnibus Recconciliation Act) will cover you for 18 months but they can charge up to 102% of the group insurance rate it was costing while you were employed. Not much of a bargain!
I retired at 62 and my wife (62 in two months) at age 54. Our former employer pays 100% of our premiums for full coverage health and prescription benefits. We do have copays but they're negligable. As soon we each reach 65 our coverage will become a Medicare supplement policy which, with Medicare, will provide us with the same benefits and prescription coverage. The state will also add our Medicare Part B premiums to our retirement checks so we lose nothing.
We know how fortunate we are and are very thankful. Both of our fathers were retired miliotary and we know how much they and our mothers benefitted from their lifetime coverage.
Location: Finally escaped The People's Republic of California
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My Deal when I retire in 1800 more days, at the age of 55, is the same as Escort Rider, 80%-20% split on the premiums until I'm eligible for Medicare......
I worked an extra year, until I was 66 because we could not get health insurance on my wife for BS reason, mainly because she was an older American at 59 which carries more risk (each company gave different reason when she was turned down). She is on COBRA right now for 36 months, she will be almost 63 when the time period is up, we have no clue what we will do then. Those that have posted are extremely fortunate to have continuing coverage from their employer.
I worked an extra year, until I was 66 because we could not get health insurance on my wife for BS reason, mainly because she was an older American at 59 which carries more risk (each company gave different reason when she was turned down). She is on COBRA right now for 36 months, she will be almost 63 when the time period is up, we have no clue what we will do then.
Please explain about the 36-month time period for COBRA. I thought the limit was 18 months. Can the employer simply agree to a longer time period? If so, they shouldn't really care, as they are not out any cash other than the processing of the paperwork.
As far as what you will do after 3 years, it is possible that some of the Obamacare provisions which will have taken effect by then will make it easier for you to get coverage. (Many of the provisions of the new law will be phased in gradually).
I googled COBRA insurance and selected the Department of Labor site (www.dol.gov./esba/faqs/faq_consumer_cobra.HTML (http://www.dol.gov./esba/faqs/faq_consumer_cobra.HTML - broken link)). It explained that certain "qualifying events" may entitle a beneficiary to 36 months, rather than 18 months, of COBRA coverage. In addition, "A plan, however, may provide longer periods of coverage beyond those required by COBRA." On another part of the FAQ page, there is a similar sentence: "A plan, at its discretion, may provide longer periods of continuation coverage."
My conclusion: One may be limited to 18 months of COBRA coverage if one's employer/plan does not agree to a longer time period.
I plan on retiring at 58 in 2014 when the new healthcare reform takes affect. Me and my wife will get our insurance through the Insurance Exchange (part of the healtcare reform) which we hope will be much more affordable than what we can get currently through the individual market. Also, because I work for a small company which offer no pension nor any type of early retirement medical insurance deal and my wife had cancer a few years ago makes it impossible to purchase insurance without the reform (thanks to Obama and the Democrats for this one).
You are right, health care costs are a major expense. We retired early and managed with high deducible plans without too much problem until the combination of exploding medical costs and us turning 60 drove up rates substantially.
Our insurance with individual $10,000 annual deductible costs us about $5000 a year... and this thus far has been cheaper than a low deductible plan.
This year expenses for us will be the $5000 in premiums and another $6000 out of pocket which is still cheaper than ~$17,000 for a full family policy.
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Please explain 36-month COBRA
