The material presented here is for educational purposes only, and is not intended to be used as financial, investment, or legal advice.
Bridge the Gap: Pre-Medicare Insurance for Arizonans Over 60
Adequate healthcare insurance is critical for seniors. Retirees who are 65 or older can count on Medicare, but what about soon-to-be retirees under 65 who fall into the healthcare gap and need pre-Medicare coverage? Options through the Health Insurance Marketplace® and short-term plans can bridge insurance coverage for those who have retired and are not yet eligible for Medicare.
Retiring early? Typically entering your golden years sooner than expected is an exciting time. Yet, some 60+ early retirees in Arizona may find themselves stuck in the healthcare gap. This is a period between losing your (or your spouse’s) employer-sponsored health care plan and getting Medicare that kicks in at age 65 (if you qualify).
There are short-term solutions to bridge the gap and provide you with coverage until you’re eligible to receive Medicare. Continuing health insurance is crucial because of increasing costs of medical care or services that can come with aging. Here’s what to know about alternative coverage:
Health Insurance Marketplace®
The Health Insurance Marketplace®, or Health Insurance Exchange, serves as a federally operated resource where those who are uninsured can find information about, shop for and purchase healthcare under the Affordable Care Act (ACA). The IRS explains that you can learn about your options, assistance for paying for premiums, reducing out-of-pocket expenses and how to make coverage more affordable, among other various helpful information.1 Depending on where you live, a state-based Marketplace may be available to you. Where you live, along with your health and income, will help determine your cost of healthcare coverage. Visit HealthCare.gov to learn more.
Short-Term Health Insurance
Short-term health insurance ensures you’re protected in the event of an accident or illness, or if you need healthcare services, during the timeframe between employee coverage and Medicare coverage. Temporary coverage is limited and not as comprehensive as other plans; however, an open network can be one advantage of short-term insurance. It’s essential to secure your financial situation in case the unexpected happens (and the unexpected can be expensive). HealthMarkets informs that short-term insurance:2
- Generally has lower premiums
- Pre-existing conditions can deny you from coverage
- Plans cover up to one year
- You may be able to reapply for up to three years
- States have their own restrictions
Short-Term Health Insurance Benefits
Before enrolling, you’ll want to check what services the pre-Medicare plan covers and if the benefits will meet your needs. For example, you may want benefits for prescription drugs, routine health services, hospitalization, emergency expenses, vision and hearing and/or telemedicine, among others. Along with coverage, some plans may offer special benefits like cash reimbursements for expenses like preventative care. Premiums and deductibles are also comparatively lower because of fewer benefits and services. Need to cancel? You can drop insurance at any time without penalty. While shopping for a plan, make sure you fully understand the policy and any restrictions or exclusions. Term plans and features vary because short-term coverage is unregulated by the ACA.3
Who is Short-Term Health Insurance For?
Pre-Medicare insurance is typically for those who:
- Need coverage leading up to age 65 and who are no longer enrolled in their employer’s or spouse’s plan.
- Want an alternative solution to Consolidated Omnibus Budget Reconciliation Act (COBRA) or who don’t have COBRA as an option (COBRA is an extension of your former employer’s health insurance and premiums are many times significantly high.).
- Don’t qualify for tax subsidy as part of Obamacare.
- Don’t want to pay for private insurance at a steep cost.
Medicare Supplemental Coverage
Plans through the Health Insurance Marketplace® and short-term health insurance are available for early retirees who need coverage before they can enroll in Medicare. Keep in mind, if you’re eligible and receiving Social Security when you turn 65, you’re automatically enrolled in Original Medicare (Parts A and B). But if you need supplemental insurance to cover additional, necessary services under Medicare, you can explore purchasing Medicare Advantage (Part C) or Medigap.
By covering this transitional timeframe with short-term healthcare, you can enjoy the beginning of your golden years knowing that you have insurance to help safeguard your finances from potentially expensive medical bills.